In the matters of Earth Civil Australia Pty Ltd, RCG CBD Pty Ltd, Bluemine Pty Ltd, Diamondwish Pty Ltd and Rackforce Pty Ltd (all in liq)

1. [1]

   HER HONOUR: Before me for hearing last year were five sets of proceedings brought by the liquidator of five insolvent companies: Earth Civil Australia Pty Ltd (In Liquidation) (Earth Civil); RCG CBD Pty Ltd (In Liquidation) (RCG CBD); Bluemine Pty Ltd (In Liquidation) (Bluemine); Diamondwish Pty Ltd (In Liquidation) (Diamondwish); and Rackforce Pty Ltd (In Liquidation) (Rackforce) (together, the Insolvent Companies). The liquidator (Mitchell Ball) is the first-named plaintiff in each proceeding; the relevant Insolvent Company is the second plaintiff in the respective proceeding to which that company relates.

2. [2]

   The plaintiffs seek relief against a large number of corporate and individual defendants arising out of alleged conduct on the part of the Insolvent Companies of engaging, on the advice or recommendation of an accounting firm, Banq Accountants and Advisors Pty Ltd (Banq) (which is now also in liquidation), or principals of or persons employed by that firm, in what the liquidator has described as “carousel payments” or round robin transactions. It is said that the Insolvent Companies (while they were under the control of one or more of the defendants) were used as “money transaction units”, effectively for money laundering.

3. [3]

   The proceedings were commenced against a raft of defendants. However, relief is now only claimed against a much smaller number of defendants, the plaintiffs having either settled (or in one case, abandoned) their claims against the other defendants.

4. [4]

   The participants in the alleged conduct have been categorised as the Primary Conspirators, on the one hand, and the Paying Participants and the Receiving Participants (together, the Scheme Participants) on the other. The alleged Primary Conspirators common to all five sets of proceedings are: Banq; Gino Cassaniti (portrayed, in essence, as the mastermind of the Scheme); Peter Abboud; Faouzi Khalil (to whom I will refer, as he is commonly known, as Fred Khalil); and his brother, George Khalil. As Banq is in liquidation, the plaintiffs could not proceed against it without seeking leave pursuant to s 471B of the Corporations Act 2001 (Cth) (Corporations Act), which they ultimately chose not to do (T 5.45-50). The Scheme Participants were all clients of Banq and, in most instances, Banq was their registered tax agent. I will explain in further detail in due course the relationships or family connections between various of the alleged Primary Conspirators and Scheme Participants.

5. [5]

   Broadly speaking, what is alleged is that the Primary Conspirators breached fiduciary duties owed to the Insolvent Companies by conspiring in a course of conduct (the Scheme) amounting to equitable fraud on their part. The plaintiffs clarified in their opening submissions that they do not contend that the Scheme Participants were party to the conspiracy agreement itself (see T 117.40.45). Rather, they contend that the Scheme Participants were, at best, recklessly indifferent or closed their eyes to the obvious dishonesty of the Primary Conspirators and, thus, they are accessorially liable.

6. [6]

   It is said that the Scheme was to utilise the Insolvent Companies: to receive income or make payments for no genuine provision or acquisition of goods or services; to deal with that income in such a way as to deprive the relevant Insolvent Company of the ability to meet its taxation obligations; and to pay the whole of such income (which otherwise would have been available to meet those tax obligations) to other companies or persons when the insolvent company had no lawful obligation to make those payments. The plaintiffs say that there was not one genuine commercial document for any of the transactions the subject of the respective Proceedings; and that none of the Insolvent Companies derived any commercial benefit from the transactions.

7. [7]

   Pausing here, at the hearing, various of the defendants submitted that the taxation assessment issued by the Commissioner of Taxation (the Commissioner) on which the Commissioner’s debts (and the plaintiffs’ claimed losses) are founded could have been challenged on the basis that the Insolvent Companies allegedly lacked any obligation or entitlement to pay or receive moneys in relation to the impugned transactions. This submission raised issues as to causation of loss (and belated attempts to plead a mitigation defence, as to which I say more in due course); as well as arguments on discretionary grounds as to some of the relief here sought by the plaintiffs. Further, in relation to at least some of the impugned transactions, it is submitted that (contrary to the plaintiffs’ contentions) there was in fact a legitimate purpose for the transaction, such as the transfer of equipment in the case of the Borg Parties (see below) or the acquisition of property in the case of the AKA Parties (see below) (which I will also explain in due course).

8. [8]

   The plaintiffs say that it is to be inferred that, in implementing the alleged conspiracy, the Primary Conspirators made recommendations to the effect, that, by entering into the transactions, the Scheme Participants could obtain improper tax benefits; and/or that the transactions would be for the benefits and purposes of the Scheme Participants without the knowledge of the Insolvent Companies (the Scheme Recommendations). It is said that, in the absence of a genuine explanation for any transaction that is the subject of these Proceedings (again, a premise with which various of the defendants cavil), it is to be inferred that those transactions did not “just occur without design and execution”; and that it is to be inferred that in every case the Scheme Recommendation, or something close to it, occurred. The plaintiffs rely on the High Court’s recognition that, in most cases, conspiracies will be established by inference, from all relevant facts; and that the statements and conduct of conspirators, whether or not in the presence of each other, may be relied on to establish the fact of the conspiracy (Ahern v R (1988) 165 CLR 87; [1988] HCA 39 (Ahern v R) at [5]-[6] per Mason CJ, Wilson, Deane, Dawson and Toohey JJ).

9. [9]

   The plaintiffs say that often false or incomplete documents of the respective purported business transactions were lodged with the Australian Tax Office (ATO); and that moneys received by the Insolvent Companies were paid away almost immediately after receipt, the Insolvent Companies thereafter becoming insolvent.

10. [10]

    In summary, the plaintiffs contend, in each case, that: (a) one or more of the Primary Conspirators (or one of their clients) was (or were) the director(s) or de facto director(s) of the relevant Insolvent Company and, as such, owed fiduciary duties to the Insolvent Company; (b) the Primary Conspirators, intending to use dishonest means, agreed to use those dishonest means to obtain an advantage for themselves by putting another person’s property at risk and, in so doing, agreed to do an unlawful act (a conspiracy to defraud, in the sense explained in Peters v R (1998) 192 CLR 493; [1998] HCA 7 (Peters v R) at [29], [74]; and Ahern v R at [5]-[6]); (c) the conspiracy to do an unlawful act was in breach of the Primary Conspirators’ fiduciary duties to the relevant Insolvent Company; and (d) in dealing with the Insolvent Company’s money in breach of those fiduciary duties, the Primary Conspirators were trustees of the Insolvent Company’s money.

11. [11]

    The plaintiffs say that the respective directors of the Insolvent Companies in each case allowed the relevant Insolvent Company: to be used to wash money (tax free) into the hands of the Primary Conspirators and the Scheme Participants; to engage in transactions of payments in and payments out for no genuine commercial purpose and in respect of which there were no genuine documents; to engage in the transactions which provided no benefit of any kind to the company but, rather, were to its detriment; to engage in transactions for the benefit of themselves personally and/or for persons and companies associated with them, in order that they (the conspirators) would profit; to incur tax debts, penalties and interest; and to become insolvent and be unable to pay their taxation liabilities. Thereby, it is said, the directors’ breaches of their fiduciary duties were dishonest and fraudulent.

12. [12]

    The relevant accessories (amongst the alleged Primary Conspirators) are identified as follows: for Earth Civil – the director (fiduciary) was Gino Cassaniti, the accessories (conspirators) were Fred Khalil, George Khalil and Peter Abboud; for RCG CBD – the director (fiduciary) was again Gino Cassaniti, the accessories (conspirators) were Fred Khalil and Peter Abboud, together with George Khalil as the de facto director; for Bluemine – the director (fiduciary) was Gino Cassaniti, the accessories (conspirators) were Fred Khalil, George Khalil and Peter Abboud; and for each of Diamondwish and Rackforce – the director (fiduciary) was Frank Criniti, and the accessories (conspirators) were Gino Cassaniti, Fred Khalil, George Khalil and Peter Abboud.

13. [13]

    It should be emphasised (since this was the focus of some criticism by the defendants of the pleadings and since the requisite degree of proof of a conspiracy to defraud was a matter of no little emphasis in the defendants’ submissions) that, although the claims are predicated on an overarching agreement to injure the Insolvent Companies and to defraud the Commonwealth, no claim in the tort of conspiracy, as such, is pleaded. Indeed, any such claim was expressly disavowed in the plaintiffs’ opening submissions. Rather, in each case, the allegation is of equitable fraud; and the claims against the respective defendants (whether for principal or accessorial liability) are predicated on breach of fiduciary duty or equitable fraud. Consequently, the plaintiffs claim equitable relief or relief pursuant to various other statutory provisions (namely, ss 180, 181 and 182 of the Corporations Act); and claims pursuant to ss 588FB-588FF of the Corporations Act (for insolvent, uncommercial, unreasonable director-related, voidable transactions); as well as claims in restitution for unjust enrichment or moneys had and received.

14. [14]

    It is contended that the primary liability, as fiduciaries and trustees, for the breach of duty lies with the Primary Conspirators for their implementation of the Scheme; and that accessorial liability for breach of those duties lies with the Scheme Participants proportionate to the extent that their knowing involvement in (and thereby facilitation of) the Scheme caused loss to the Insolvent Companies.

15. [15]

    In each Proceeding, the plaintiffs contend that the Scheme Participants, by their conduct, knowingly assisted the respective director in the director’s breach of fiduciary duty, and that they thereby incurred accessorial liability for those respective claims within the principles articulated in Barnes v Addy (1874) LR 9 Ch App 244 (Barnes v Addy) at 252 per Selborne LJ; Baden Delvaux & Lecuit v Société Générale pour Favoriser le Développement du Commerce et de l’Industrie en France SA [1993] 1 WLR 509; [1992] 4 All ER 161 (Baden Delvaux) at 235-238 per Gibson J; and Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89; [2007] HCA 22 (Farah Constructions) at [163] per Gleeson CJ, Gummow, Callinan, Heydon and Crennan JJ (and pursuant to s 79 of the Corporations Act). The Barnes v Addy claim is put as a second limb (knowing assistance) claim; not a first limb (knowing receipt) claim. Reference is made to Lewis Securities Ltd (in liq) v Carter (2018) 355 ALR 703; [2018] NSWCA 118 (Lewis Securities v Carter) at [185]-[187] per Emmett AJA as to the relevant principles for knowing assistance (to which I will return in due course).

16. [16]

    I interpose here to note that, although in the plaintiffs’ opening written submissions the liability of the various alleged wrongdoers was said to be joint and several, the plaintiffs made clear in opening oral submissions (and in their closing written and oral submissions), that what is here contended is that, as a matter of law, the liability of the respective defendants is several (not joint and several). This is central to the issue raised during the hearing as to whether liability on the part of the then remaining active defendants had been released by operation of law as a result of settlements entered into with other alleged wrongdoers – as to which I say more in due course.

17. [17]

    The plaintiffs say that the Scheme Participants were, as to the respective transactions claimed against them, accessories to the relevant breach by the fiduciaries, as follows (adopting the abbreviations set out in due course for the corporate entities not yet here defined): for Earth Civil – Michael Abou-Antoun, AKA Civil and AKA NSW; for RCG CBD – Sivasli, Borg Family, Tanya Borg, Borg Civil, Michael Borg, Kamikaze Teppanyaki, George Said, Scott Crabbe, and John Haddad; for Bluemine – LAM Haulage, MAL Land Group, The Great Brothers, Andre Abou-Antoun, Michael Abou-Antoun, AKA Civil, AKA NSW, John Haddad, Borg Family, Tanya Borg, George Said, Ivana Cassaniti, and Discobell; and for each of Diamondwish and Rackforce – Ivana Cassaniti.

18. [18]

    The plaintiffs contend that no Scheme Participant was involved in the respective transactions for an innocent purpose; rather, that the Scheme Participants engaged in the transactions for benefits to themselves or others associated with them (to which they were not entitled) and to the detriment of the Insolvent Companies.

19. [19]

    It is said that each of the Scheme Participants (reference in particular being made to Ivana Cassaniti, the Borg Parties (see as later defined), George Said, and Michael and Andre Abou-Antoun), in the respective transactions, assisted the relevant fiduciary with knowledge of the fiduciary’s dishonest design, and each was an accessory to the breaches by the fiduciary of his fiduciary duties for those transactions in that: each had actual knowledge of that design and each: wilfully shut his or her (or its) eyes to the obvious; or wilfully and recklessly failed to make such enquiries as an honest and reasonable person would make; or had knowledge of circumstances that would indicate the facts to an honest and reasonable person (i.e. knowledge within one of the first four categories of knowledge in Baden Delvaux).

20. [20]

    The plaintiffs say that the participation as an accessory by the Scheme Participants in the respective transactions in which they were involved is shown in the particular circumstances for each transaction and, in particular, that: the transactions were not genuine; there were no genuine documents evidencing a genuine commercial transaction; they did not assert a positive defence case to counter the plaintiffs’ contentions (except for Ivana Cassaniti and Tanya Borg), and merely pleaded denials or non-admissions; and they did not give, or adduce, evidence to contradict the plaintiffs’ case and the plaintiffs’ evidence (except for Ivana Cassaniti and Tanya Borg).

21. [21]

    Details of the taxation obligations of the respective Insolvent Companies are set out in Schedule 1 of the plaintiffs’ closing submissions. By reference, among other things, to the ATO’s respective Reasons for Decision, the plaintiffs calculate the total tax liabilities of the Insolvent Companies as follows: RCG CBD, $6,209.097.72; Bluemine, $5,138,203.36; Earth Civil, $1,122,680.34; Diamondwish, $1, 439, 573.61; Rackforce, $3,784,620.14. It is noted by the plaintiffs (and not disputed by the defendants) that, while they stand, the ATO’s assessments are conclusive evidence of the existence and amount of tax liability (the plaintiffs here referring to the Taxation Administration Act 1953 (Cth) (Taxation Administration Act) Sch 1, s 105-100 (see s 350-10 in the newest version of the Act); and Deputy Commissioner of Taxation v Broadbeach Properties Pty Ltd (2008) 237 CLR 473; [2008] HCA 41 (Broadbeach) per Gummow ACJ, Heydon, Crennan and Kiefel JJ; applied in Aquatic Air Pty Ltd v Siewert [2015] NSWSC 928 (Aquatic Air v Siewert) at [63] by Brereton J, as his Honour then was). Claims are made against the Primary Conspirators for all the taxation liabilities of the Insolvent Companies; and claims are made against the other defendants (particularly, the Paying Participants) upon the basis and to the extent that their conduct caused such liabilities.

22. [22]

    As to payments made out of the Insolvent Companies, it is contended that those payments were made by the respective directors in breach of the fiduciary duties which they owed to the relevant Insolvent Companies and that the recipients have accessorial liability for those breaches. The compensation claimed from the Receiving Participants is the amount of money received by them. It is said that the directors of those respective corporate payees are similarly liable for those amounts. The amounts sought to be recovered are as set out in Schedule 3 to the plaintiffs’ closing submissions.

23. [23]

    There were at one stage some 142 defendants across the five sets of Proceedings. However, as adverted to above, the plaintiffs have settled claims against several defendants both before and after the commencement of the hearing (the settlements are set out at Schedule 2 to the plaintiffs’ closing submissions, and see the affidavit sworn on 31 January 2020 by the liquidator). The plaintiffs, for reasons that I set out in due course, chose not to pursue any claim against one of the named defendants (Andrew Barsa) in circumstances where they had encountered difficulty in locating his whereabouts (leading to submissions by the defendants based on the effect of the abandonment of such a claim on their alleged liability).

24. [24]

    The plaintiffs have deducted the amounts of the settlement sums from their monetary claims in favour of the remaining defendants. In closing submissions, the plaintiffs confirmed that, if further deductions or monetary adjustments or terms, are necessary to do justice between the parties in order for the plaintiffs to do equity, then the plaintiffs offer to do so.

25. [25]

    The plaintiffs have identified the primary issues in the respective proceedings as being: whether there is any genuine commercial explanation for any of the transactions; whether, in entering into the so-called “carousel” transactions, the directors of the Insolvent Companies breached their fiduciary and statutory duties; and whether, in entering into their respective transactions, the Scheme Participants were accessories to the breaches by the directors of their fiduciary and statutory duties.

26. [26]

    The five matters were heard together over a succession of hearing days, with evidence in the one set of proceedings being evidence in the others. Throughout the hearing there were changes in the legal representation of various defendants; settlements with some of the defendants; and various applications for amendment of the pleadings, culminating in a late amendment sought by one of the defendants (Ivana Cassaniti) to plead a defence based on the principle that release of a joint and several wrongdoer releases the concurrent wrongdoer (see Edgewater Homes Pty Ltd v Donohoe [2019] NSWSC 44 (Edgewater Homes)). All of the other defendants “jumped on the bandwagon” (their words) to adopt this defence in amended pleadings of their own. This caused no little delay (and I say this with no criticism of the liquidator) in the finalisation of the liquidator’s submissions in reply (those being received in October 2020). Ultimately, closing submissions were dealt with on the papers.

27. [27]

    For completeness, I note that the liquidator has acknowledged, by reference to s 1317J of the Corporations Act, that he is not entitled to seek declaratory relief for civil penalty offences (though he seeks determinations as to the conduct alleged in that regard). Nevertheless, the plaintiffs maintain their claim for monetary relief in relation to that conduct pursuant to s 1317H(1) of the Corporations Act.

The respective proceedings

1. [28]

   The respective proceedings may be summarised as follows. (Where reference is made to information contained in Tables, this is a reference to tables as contained in the pleadings and as enumerated in the plaintiffs’ submissions.) For ease of reference a schedule of Dramatis Personae is attached to these reasons. In summary, although there is overlap between various parties in the different proceedings, in general, of the still active defendants, it will be seen that the Earth Civil Proceeding is largely concerned with the AKA Parties including and associated with the Abou-Antoun family members; the RCG CBD Proceeding with the Borg Parties; the Bluemine Proceeding with Banq, the Borg Parties and AKA Parties; and the Diamondwish and Rackforce Proceedings with transactions involving the Criniti companies (against whom the plaintiffs’ claims have been settled). This is explained further below.

2. [29]

   The Earth Civil Proceeding relates to transactions involving Earth Civil Australia Pty Ltd (Earth Civil), a company associated with members of the Abou-Antoun family (in particular, Michael Abou-Antoun and his brothers, Andre Abou-Antoun and Laurance Abou-Antoun). It also concerns companies related to Earth Civil including AKA (Civil) Australia Pty Ltd (AKA Civil), AKA (NSW) Pty Ltd (AKA NSW), LAM Haulage Pty Ltd (LAM Haulage), MAL Land Group Pty Ltd (MAL Land Group) and The Great Brothers Pty Ltd (The Great Brothers). In general, I refer to the individuals and entities associated with the Abou-Antoun brothers collectively as the AKA Parties.

3. [30]

   Other companies earlier associated with the Abou-Antoun family (but deregistered prior to the impugned transactions) include Demolition Australia Pty Ltd (Demolition) (formerly known as Mikhael Antoun Pty Ltd).

4. [31]

   The final iteration of the pleading of the plaintiffs’ claims in the Earth Civil Proceeding is the second further amended statement of claim filed in Court on 7 February 2020 (the Earth Civil second further amended statement of claim).

5. [32]

   Relevantly, the defendants in the Earth Civil Proceeding are: Michael Abou-Antoun (the 1st defendant); Gino Cassaniti (the 2nd defendant); Banq (the 3rd defendant); Fred Khalil (the 4th defendant); George Khalil (the 5th defendant); Peter Abboud (the 6th defendant); AKA Civil (the 7th defendant); and AKA NSW (the 8th defendant).

6. [33]

   The claims made in the Earth Civil Proceeding relate to the following impugned transactions (the Earth Civil transactions):

   1. (1)

      payments totalling $400,000 made by AKA Civil to Earth Civil in the period from 25 September 2012 to 31 October 2012; and cash withdrawals made by Andre Abou-Antoun from Earth Civil’s bank account totalling $400,000 in the period from 27 September 2012 to 13 December 2012 (see Table 1.2); and

   2. (2)

      payments totalling $586,000 made by AKA NSW to Earth Civil in the period from 4 February 2013 to 28 May 2013; and cash withdrawals made by Michael Abou-Antoun and an unknown person from Earth Civil’s bank account totalling $565,000 in the period from 5 February 2013 to 28 May 2013 (see Table 1.3).

7. [34]

   In all, cash payments totalling some $965,000 were withdrawn from the Earth Civil bank account in the above transactions. The plaintiffs maintain that there are no genuine commercial documents for those transactions (see the liquidator’s affidavit sworn 7 June 2018 at [44]-[52]).

8. [35]

   Most of the AKA Parties were represented in the hearing by Ms Seiden SC (for argument on particular issues) and by Mr Johnson of Counsel (throughout the hearing). Laurance Abou-Antoun was, however, separately represented by Mr Eardley of Counsel (and the claim against him was settled during the course of the hearing).

9. [36]

   The RCG CBD Proceeding relates to transactions in which RCG CBD, a company associated with members of the Khalil family (see below), was involved. (As per a printed business card in George Khalil’s name, RCG is an acronym for Reliance Cleaning Group – see below (Ex K at 38511), though nothing turns on this other than to indicate the similarity of various of the company names used by entities connected with Banq, i.e. Reliance Cleaning, RC Group Aust, RCG CBD.) The final iteration of the pleading of the plaintiffs’ claims in the RCG CBD Proceeding is to be found in the third further amended statement of claim filed on 7 February 2020 (the RCG CBD third further amended statement of claim).

10. [37]

    Relevantly, of the over 40 defendants, the remaining active defendants in the RCG CBD Proceeding are: Sivasli Pty Ltd (Sivasli) (the 5th defendant); Gino Cassaniti (the 11th defendant); Fred Khalil (the 12th defendant); George Khalil (the 13th defendant); Peter Abboud (the 14th defendant); Scott Crabbe (the 28th defendant); Borg Family Pty Ltd (Borg Family) (the 29th defendant); Tanya Borg (the 30th defendant); Borg Civil Australia Pty Ltd (Borg Civil) (the 31st defendant); Michael Borg (the 32nd defendant); John Haddad (the 33rd defendant); Kamikaze Teppanyaki (Darling Harbour) Pty Ltd (Kamikaze Teppanyaki) (the 34th defendant); George Said (the 38th defendant).

11. [38]

    Pausing here, I note that default judgment has been sought against both John Haddad and Scott Crabbe in the RCG CBD Proceeding, on the basis that neither has filed an appearance or a defence in the Proceeding.

12. [39]

    For completeness, and as they form part of the factual matrix of the Proceedings, I note the former defendants in the RCG CBD Proceeding are: Banq (the 1st defendant); Wenman Brimak Investments Pty Ltd (Wenman Brimak) (the 2nd defendant); Statewide Printing Group Pty Ltd (Statewide Printing) (the 3rd defendant); Giorgio Mikhail Vlahakis (the 4th defendant); Harry Patsouris (the 6th defendant); Kito Investments Pty Ltd (Kito Investments) (the 7th defendant); Fox & Staniland Pty Ltd (Fox & Staniland) (the 8th defendant); JRC Kazzi Investments Pty Ltd (JRC Kazzi) (the 9th defendant); Coolfind Pty Ltd (Coolfind) (the 10th defendant); Wendy Nassar (the 15th defendant); Blackrock Media Australia Pty Ltd (Blackrock Media) (the 16th defendant); Elias Nassar (the 17th defendant); Ignite Promotions Pty Ltd (Ignite Promotions) (the 18th defendant); James David Murray (the 19th defendant); State Wide Design & Print Pty Ltd (State Wide Design) (the 20th defendant); Mario Sande (the 21st defendant); Richard Attard (the 22nd defendant); Michael Sande (the 23rd defendant); Katherine Khalil (the 24th defendant); John Kazzi (the 25th defendant); Fred Naesse (the 26th defendant); Reliance Cleaning Group Pty Ltd (Reliance Cleaning) (the 27th defendant); Phoenix Industrial Cleaning & Pest Management Pty Ltd (Phoenix Industrial Cleaning) (the 35th defendant); Ahmed Ghanem (the 36th defendant); Zouhair Ghanem (the 37th defendant); Frank Scuteri (the 39th defendant); HCC Commercial Cleaning Pty Ltd (HCC Commercial) (the 40th defendant); Nizar Haidar (the 41st defendant); Aaron Tippet (the 42nd defendant); Richard Pepper (the 43rd defendant) and Nadia Bevilacqua (the 44th defendant).

13. [40]

    The claims made in the RCG CBD Proceeding relate to the following impugned transactions (many of which also involved persons or corporations involved in the other sets of Proceedings – see, for example, the series of transactions involving Wenman Brimak and the Statewide Printing clients of Banq, namely State Wide Design and Statewide Printing):

    1. (1)

       payments totalling $653,439.54 made by Banq to RCG CBD in the period from 31 July 2012 to 27 May 2013 (Table 3.1);

    2. (2)

       payments totalling $920,415.00 made by RCG CBD to Banq in the period from 10 September 2012 to 30 May 2013 (Table 3.2);

    3. (3)

       payments totalling $781,955.00 made by Ignite Promotions to RCG CBD and payments totalling $710,868.20 made by RCG CBD to Wenman Brimak in the period from 30 January 2013 to 7 March 2013 (Table 3.3);

    4. (4)

       payments totalling $491,961.71 made by State Wide Design to RCG CBD and payments totalling $447,223.27 made by RCG CBD to Statewide Printing in the period from 15 November 2012 to 13 March 2013 (Table 3.4);

    5. (5)

       payments totalling $585,070.00 made by Borg Family to RCG CBD and payments totalling $580,000.00 made by RCG CBD to Borg Civil in the period from 25 September 2012 to 10 October 2012 (Table 3.5);

    6. (6)

       a payment of $33,000 made by Borg Civil to RCG CBD on 24 May 2013 (Table 3.5);

    7. (7)

       payments totalling $116,580.00 made by HCC Commercial to RCG CBD (Table 3.6);

    8. (8)

       payments totalling $128,700 made by RCG CBD to Investmint Pty Ltd (Investmint) in the period from 24 January 2013 to 18 April 2013 (Tables 3.6 and 3.11);

    9. (9)

       payments totalling $52,020.00 made by RCG CBD to LFC Holdings Pty Ltd (LFC Holdings) in the period from 31 December 2012 to 9 January 2013 (Tables 3.6 and 3.7);

    10. (10)

        payments totalling $49,555.00 made by Phoenix to RCG CBD in the period from 7 December 2012 to 24 February 2013 (Table 3.7);

    11. (11)

        payments totalling $17,800 made by RCG CBD to Katherine Khalil in the period from 2 August 2012 to 10 December 2012 (Tables 3.7 and 3.12);

    12. (12)

        payments totalling $931,000.00 made by North Shore Property Developments Pty Ltd (North Shore) and John Haddad to RCG CBD in the period from 5 October 2012 to 8 May 2013 and payments totalling $272,000.00 made by RCG CBD to Aaron Tippett in the period from 11 October 2012 to 9 May 2013 (Table 3.8);

    13. (13)

        payments totalling $530,000.00 made by Crinz Workforce & Training Pty Ltd (Crinz) to RCG CBD in the period from 29 August 2012 to 5 October 2012; and on 30 August 2012 a payment of $70,000 was made by RCG CBD to JRC Kazzi and on 4 September 2012 a payment of $90,000 made by RCG BCD to Crinz (Table 3.9);

    14. (14)

        payments totalling $201,000.00 made by Sivasli to RCG CBD in the period from 12 December 2012 to 14 May 2013 and a payment totalling $17,500 made by RCG CBD to Sivasli on 14 May 2013 (Tables 3.10 and 3.13);

    15. (15)

        payments totalling $1,618,254.35 made by Reliance Cleaning to RCG CBD in the period from 18 July 2012 to 21 May 2013 (Table 3.11);

    16. (16)

        payments totalling $364,656.29 made by Kamikaze Teppanyaki to RCG CBD in the period from 31 July 2012 to 21 May 2013 (Table 3.12);

    17. (17)

        payments totalling $934,339.28 made by Involved Recruitment Pty Ltd (Involved Recruitment) to RCG CBD in the period from 7 September 2012 to 30 May 2013 (Table 3.13);

    18. (18)

        payments totalling $140,000.00 made by Kito Investments to RCG CBD in the period from 20 November 2012 to 13 May 2013 (Table 3.14);

    19. (19)

        payments totalling $180,020.00 made by Harry Patsouris to RCG CBD in the period from 25 September 2012 to 15 October 2012 (Table 3.15);

    20. (20)

        payment totalling $100,030.00 made by Fox & Staniland to RCG CBD on 31 January 2013 (Table 3.16); and

    21. (21)

        payment totalling $50,000 made by Coolfind to RCG CBD on 27 February 2013 (Table 3.17).

14. [41]

    The plaintiffs say that there are no genuine commercial documents for any of the above RCG CBD transactions (see liquidator’s affidavit sworn 7 June 2018 at [12]-[18]). Insofar as it is suggested that Banq paid RCG CBD significant sums for labour hire services, the plaintiffs note that the profit and loss statement of Banq does not record Banq incurring such an expense. (I interpose here to note that I place weight on the lack of such documentation in circumstances where Banq, as an accounting firm, would be expected to have recorded such payments correctly were they have been in fact for labour hire services.)

15. [42]

    The plaintiffs say that it is to be inferred that the impugned RCG CBD transactions could not have occurred without the knowledge of all of the principals of Banq. In particular, it is said that the payment by Banq of $653,000 to RCG CBD could not have occurred without the knowledge of the principals of Banq, and with the knowledge of George Khalil as the “banker” of RCG CBD.

16. [43]

    The plaintiffs point to the receipt of income by Fred Khalil from RCG CBD, through his companies (Kito Investments, Investmint, Kamikaze Teppanyaki and Sivasli) and to the receipt of income by Peter Abboud from RCG CBD through his company (LFC Holdings), as benefits received by the Primary Conspirators in relation to the Scheme.

17. [44]

    It is also noted that RCG CBD received payments from Bluemine, and that Diamondwish received a payment of $250,000 from RCG CBD (see [59] below), for which the plaintiffs say there were no genuine business records.

18. [45]

    The Bluemine Proceeding relates to transactions in which Bluemine, a company incorporated by Banq, was involved. The final iteration of the pleading by the plaintiffs in the Bluemine Proceeding is the third further amended statement of claim filed by leave on 7 February 2020 (the Bluemine third further amended statement of claim).

19. [46]

    Relevantly, the remaining active defendants in the Bluemine Proceeding are: LAM Haulage (3rd defendant); MAL Land Group (the 4th defendant); The Great Brothers (5th defendant); Gino Cassaniti (the 11th defendant); Fred Khalil (the 12th defendant); George Khalil (the 13th defendant); Peter Abboud (the 14th defendant); Andre Abou-Antoun (the 20th defendant); Michael Abou-Antoun (the 21st defendant); AKA NSW (the 23rd defendant); AKA Civil (the 24th defendant); John Haddad (the 25th defendant); Borg Family (the 29th defendant); Tanya Borg (the 30th defendant); George Said (the 33rd defendant); Discobell Pty Ltd (the 34th defendant); and Ivana Cassaniti (the 35th defendant).

20. [47]

    The former defendants in the Bluemine Proceeding are: Banq (the 1st defendant); Wenman Brimak (the 2nd defendant); Eddy Haddad (the 6th defendant); Monica Abboud (the 7th defendant); Pierre Youssef (the 8th defendant); Jola Holdings (Aust) Pty Ltd (Jola Holdings) (the 9th defendant); Andrew Barsa (the 10th defendant); Wendy Nassar (the 15th defendant); Blackrock Media (16th defendant); Elias Nassar (the 17th defendant); Ignite Promotions (the 18th defendant); James David Murray (the 19th defendant); Laurance Abou-Antoun (the 22nd defendant); Michael Abboud (the 26th defendant); Jillian Abboud (nee Edwards) (the 27th defendant); Mohmoud Khalouf (the 28th defendant); Borg Civil (the 31st defendant); Michael Borg (the 32nd defendant).

21. [48]

    Andrew Barsa, the named 10th defendant, was not ultimately served with the Court process (in circumstances to which the plaintiffs’ solicitor, Mr Narayan, deposed during the course of the hearing) and, hence, never formally became a party to the Proceeding.

22. [49]

    Default judgment is sought against John Haddad in the Bluemine Proceeding as he has again not entered an appearance or filed a defence.

23. [50]

    The ASIC records disclose that Gino Cassaniti became a director of Bluemine only on 1 April 2013 (and that, prior to that, Andrew Barsa was recorded as the only director of the company). However, the plaintiffs contend that, having regard to Gino Cassaniti’s involvement with other earlier activities of Bluemine (to which I refer in due course) and statements made by Fred Khalil and Peter Abboud (again, to which I refer in due course), Gino Cassaniti was acting as a director of Bluemine prior to 1 April 2013. Gino Cassaniti denies this. Further, the plaintiffs contend that Andrew Barsa was only a “straw” director of Bluemine. Andrew Barsa’s evidence is to the contrary.

24. [51]

    The claims in the Bluemine Proceeding involve the following impugned transactions:

    1. (1)

       payments totalling $1,869,480 made by John Haddad, Banq, Bluemine (Acc:3684), Ignite Promotions, Borg Civil and Discobell to Bluemine and payments totalling $1,977,580 made by Bluemine to Banq, Wenman Brimak, RC Group Aust Pty Ltd (in liq) (RC Group Aust), and Bluemine (Acc: 3684) in the period from 20 February 2012 to 6 August 2013 (Table 5.1);

    2. (2)

       payments totalling $3,851,818.21 made by AKA Civil and AKA NSW to Bluemine and payments totalling $3,851359.78 made by Bluemine to MAL Land Group, RCG CBD, The Great Brothers, LAM Haulage and other (unknown) persons in the period from 3 December 2012 to 9 May 2013 (Table 5.2);

    3. (3)

       payments totalling $512,969.66 made by North Shore to Bluemine and payments totalling $495,850 made by Bluemine to Pierre Youssef, Mohmoud Khalouf, Centerium Wholesalers Pty Ltd (Centerium Wholesalers), Sam, Sonia and Eddy Haddad in the period from 27 February 2013 to 3 June 2013 (Table 5.3);

    4. (4)

       payments totalling $598,600 made by John Haddad to Bluemine and payments totalling $608,600 were made by Bluemine to Banq and Pierre Youssef in the period from 20 February 2013 to 28 February 2013 (Table 5.4);

    5. (5)

       payments totalling $20,000 made by Borg Family and other (unknown) persons to Bluemine and payments totalling $20,000 made by Bluemine to Monica Abboud in the period from 5 June 2013 to 6 August 2013 (Table 5.5);

    6. (6)

       payments totalling $55,590 made by Investmint to Bluemine and payments totalling $55,590 made by Bluemine to Involved Recruitment in the period from 22 March 2013 to 26 March 2013 (Table 5.6); and

    7. (7)

       payments totalling $48,090 made by Bluemine to Watcharee Syua Nang (identified as George Abboud’s girlfriend in Thailand) in the period from 28 November 2012 to 7 February 2013 (Table 5.7).

25. [52]

    The plaintiffs say that there are no genuine commercial documents for the Bluemine transactions (see liquidator’s affidavit sworn 7 June 2018 at [28]-[34]).

26. [53]

    It is noted that $861,745 was paid by Bluemine to Banq in the period from February 2013 to July 2013. The plaintiffs say that it is to be inferred that that could not have been paid without the knowledge of the principals of Banq, including Gino Cassaniti.

27. [54]

    Bluemine also made a number of payments to RCG CBD. First, Bluemine paid $33,110 to RCG CBD on 10 December 2011. The plaintiffs say that it is to be inferred that Gino Cassaniti knew of that payment (as the director of RCG CBD) and also that, as early as December 2012, he was orchestrating payments from Bluemine. Second, Bluemine paid RCG CBD $12,465 on 18 December 2012 (see Bluemine third further amended statement of claim at [164] – the payment originated from payments into Bluemine by AKA NSW). Third, Bluemine paid RCG CBD $16,285 on 12 December 2012 according to RCG CBD’s bank statement (see [172] of the Bluemine third further amended statement of claim; Ex K at 30427).

28. [55]

    The plaintiffs say that Bluemine’s payments to RCG CBD could not have occurred without the knowledge of George Khalil as the controller of the RCG CBD bank account; and that there were no genuine documents for these transactions.

29. [56]

    The Diamondwish Proceeding concerns transactions involving Diamondwish, a company associated with Frank Criniti (a former defendant in both the Diamondwish Proceeding and the Rackforce Proceeding). The final iteration of the pleading is the further amended statement of claim filed on 7 February 2020.

30. [57]

    Relevantly, the remaining active defendants in the Diamondwish Proceeding are: Gino Cassaniti (the 8th defendant); Fred Khalil (the 9th defendant); George Khalil (the 10th defendant); Peter Abboud (the 11th defendant); Ivana Cassaniti (the 27th defendant).

31. [58]

    The former defendants in the Diamondwish Proceeding include: Givana Prestige Pty Ltd (Givana Prestige) (the 1st defendant); Criniti’s Wood Fire Pizza Pty Ltd (Criniti’s Wood Fire Pizza) (the 2nd defendant); Frank Criniti (the 3rd defendant); Rima Criniti (the 4th defendant); Elle Barikhan (the 5th defendant); Silkred Pty Ltd (Silkred) (the 6th defendant); Banq (the 7th defendant); Aloeseiafi Faanoi (the 12th defendant); Karl Haidenbauer (the 13th defendant); Tanya Whicker (the 14th defendant); Jason Craus (the 15th defendant); Cosi Holdings Pty Ltd (Cosi Holdings) (the 16th defendant); Cosimo Criniti (the 17th defendant); Setaro Pty Ltd (Setaro) (the 18th defendant); Robert Smith (the 19th defendant); Criniti’s (Darling Harbour) Pty Ltd (Criniti’s Darling Harbour) (the 20th defendant); Australian Muscle Car Sales Pty Ltd (Australian Muscle Car Sales) (the 21st defendant); Mike Selby (the 22nd defendant); Christo Tzortzis (the 23rd defendant); Keti Craus (the 24th defendant); Darren Craus (the 25th defendant); Dominic Moio (the 26th defendant); and David Rizk (the 28th defendant).

32. [59]

    The claims made in the Diamondwish Proceeding involve the following impugned transactions:

    1. (1)

       payments totalling $709,705.71 made by Givana Prestige and Rackforce to Diamondwish in the period from 23 December 2011 to 2 April 2013 and payments totalling $707,185 made by Diamondwish to Givana Prestige, Auswide Auto Wholesalers Pty Ltd (Auswide) and Criniti’s Wood Fire Pizza in the period from 28 December 2011 to 2 April 2013 (Table 7.1);

    2. (2)

       payments totalling $277,150 made to Diamondwish by Australian Muscle Car Sales and from Frank and Rima Criniti’s Glen bank account (Glen) in the period from 12 August 2011 to 25 January 2012 and payments totalling $277,207 made by Diamondwish to Criniti’s Wood Fire Pizza and Australian Muscle Car Sales in the period from 15 August 2011 to 25 January 2012 (Table 7.2);

    3. (3)

       payments totalling $2,654,177.74 made by Tanya Whicker, Karl Haidenbauer (Frank Criniti’s brother-in-law), Auswide, Givana Prestige and Glen to Diamondwish in the period from 7 November 2011 to 19 November 2012 and payments totalling $1,811,000 made by Diamondwish to Auswide, Banq and Glen in the period from 7 November 2011 to 19 November 2012 (Table 7.3);

    4. (4)

       payment totalling $250,000 made by RCG CBD to Diamondwish on 21 December 2012 and a payment totalling $250,000 made by Diamondwish to Elle Barikhan on 24 December 2012 (Table 7.4);

    5. (5)

       payment totalling $100,000 made by Diamondwish to Criniti’s (Castle Hill) Pty Ltd (deregistered) (Criniti’s Castle Hill) on 28 December 2011 and payments totalling $100,000 made by Criniti’s Castle Hill to Diamondwish on 29 December 2011 (Table 7.5);

    6. (6)

       payments totalling $5,295,324.74 made by Karl Haidenbauer, Criniti’s Wood Fire Pizza, Glen, Rackforce, Auswide, Jason Craus, Cosi Holdings, “Maserati Mc Sutos” and “special clearance” to Diamondwish in the period from 28 July 2011 to 26 July 2013 and payments totalling $5,331,862.57 made by Diamondwish to Auswide, Karl Haidenbauer, “Accountants”, Glen, Setaro, Australian Muscle Car Sales, Silkred, Darren and Keti Craus, Criniti’s Darling Harbour and Criniti’s Wood Fire Pizza in the period from 29 July 2011 to 26 July 2013 (Table 7.6); and

    7. (7)

       payments totalling $2,405,649 were made by Rackforce, Glen and cash deposits to Diamondwish in the period from 10 November 2011 to 26 July 2013 and payments totalling $1,635,587.89 made by Diamondwish to Rackforce, Givana Prestige, Glen, Setaro, Karl Haidenbauer and Criniti’s Wood Fire Pizza in the period from 14 November 2011 to 26 July 2013 (Table 7.7).

33. [60]

    The plaintiffs say that there are no genuine commercial documents for the Diamondwish transactions identified above (see liquidator’s affidavit sworn 7 June 2018 at [78]-[84]) (and point to Frank Criniti’s evidence that Diamondwish (and Rackforce) received no benefit from the payments made out by it.

34. [61]

    In particular, the plaintiffs say that the payment out of RCG CBD to Diamondwish on 21 December 2010 of $250,000 (which was followed by the payment of that sum by Diamondwish to Elle Barikhan on 24 December 2012 could not have occurred without the knowledge and authority of George Khalil, as the sole signatory to the bank account of RCG CBD, and again, they maintain that there was a complete absence of any genuine business records regarding the transactions of Diamondwish (and Rackforce). (There was some cross-examination of Frank Criniti as to this payment to Elle Barikhan – see below.)

35. [62]

    Finally, the Rackforce Proceeding concerns transactions in which Rackforce Pty Ltd (Rackforce), also a company associated with Frank Criniti, was involved. The last iteration of the pleading is the third further amended statement of claim filed on 7 February 2020 (Rackforce third further amended statement of claim).

36. [63]

    Relevantly, the remaining active defendants in the Rackforce Proceeding are: Gino Cassaniti (the 5th defendant); Fred Khalil (the 6th defendant); George Khalil (the 7th defendant); Peter Abboud (the 8th defendant); and Ivana Cassaniti (9th defendant).

37. [64]

    I interpose here to note that there is a discrepancy between the defendants named under the “Party Details” section and the “Details about Defendant” section of the Rackforce third further amended statement of claim. For example, Ivana Cassaniti is not listed in the “Party Details” section; rather, Rima Criniti appears as the 9th defendant. However, in the “Details about Defendant” section, Ivana Cassaniti is noted as the 9th defendant and Rima Criniti is listed later as the 19th defendant. As the “Schedule of Parties” aligns with the “Details about Defendant” section, I follow that record.

38. [65]

    The former defendants in the Rackforce Proceeding include: Givana Prestige (the 1st defendant); Frank Criniti (the 2nd defendant); Frank Scuteri (the 3rd defendant); Banq (the 4th defendant); Aloeseiafi Faanoi (the 11th defendant); Criniti’s Wood Fire Pizza (the 12th defendant); Criniti’s Woolloomooloo Asset Holding Pty Ltd (Criniti’s Woolloomooloo Asset Holding) (the 13th defendant); Cosimo Foods Pty Ltd (Cosimo Foods) (the 14th defendant); Dominic Criniti (the 17th defendant); Criniti’s Darling Harbour (the 16th defendant); Dominic Moio (the 17th defendant); Criniti’s (Wollloomooloo) Pty Ltd (Criniti’s Woolloomooloo) (the 18th defendant); and Rima Criniti (the 19th defendant).

39. [66]

    The claims made in the Rackforce Proceeding involve the following impugned transactions:

    1. (1)

       payments totalling $4,536,844.79 made by Diamondwish, Crinz, Criniti’s Wood Fire Pizza and cash deposits to Rackforce in the period from 10 November 2011 to 9 November 2012 and payments totalling $4,463,041.00 by Rackforce to Auswide, Givana Prestige, Diamondwish, Frank Criniti, Criniti’s Wood Fire Pizza, Hort Grade, Darren Craus, Artivita and others in the period from 14 November 2011 to 12 November 2012 (Table 9.1); and

    2. (2)

       payments totalling $6,250,299.61 made by Crinz, Cosimo Foods, Criniti’s Woolloomooloo, Frank and Rima Criniti, Auswide; cash deposits, Frank Masons Pty Ltd, Criniti’s Darling Harbour, Criniti’s Castle Hill, “wages” and others to Rackforce in the period from 15 November 2012 to 22 August 2013 and payments totalling $6,210,094.61 made by Rackforce to Banq, Auswide, Diamondwish, Frank and Rima Criniti, Cosimo Foods, Criniti’s Wood Fire Pizza, “wages”, “Karl interest”, Criniti’s Woolloomooloo, Criniti’s Darling Harbour, Criniti’s Castle Hill, Artivita and others in the period from 16 November 2012 to 23 August 2013 (Table 9.2).

40. [67]

    The plaintiffs say that there are no genuine commercial documents for the Rackforce transactions identified above (see liquidator’s affidavit sworn 7 June 2018 at [62]-[69]).

The Insolvent Companies

1. [68]

   Earth Civil was incorporated on 25 May 2011.

2. [69]

   According to ASIC’s records, Michael Abou-Antoun was the sole director, secretary, and shareholder of Earth Civil on incorporation. From 1 July 2012, Gino Cassaniti was recorded as the sole director, secretary, and shareholder. The relevant Form 484 changing directorships and recording the nominated date of change as 1 July 2012 was allegedly signed by Gino Cassaniti on 1 January 2013 (Ex K at 10882-10884). It was lodged with ASIC on 28 May 2013. (Pausing here, a common theme in the evidence was the retrospective lodgement of forms with ASIC recording changes in directorships and the like.) Michael Abou-Antoun was at all relevant times the sole signatory to Earth Civil’s bank accounts.

3. [70]

   The registered office of Earth Civil from 25 May 2011 to 7 July 2011 was what I will refer to as the Former Banq Address (see below); and then from 8 July 2011 to 7 July 2013, it was what I will refer to as the Banq Address (also defined below). Earth Civil’s tax agent was Banq from 25 May 2011 to 16 July 2013.

4. [71]

   Earth Civil did not lodge any Business Activity Statements (BAS) returns until 28 May 2013 (see Aris Zafiriou’s affidavit sworn 9 March 2017 at [63]) (the same day that each of RCG CBD and Involved Recruitment lodged BAS returns – Aris Zafiriou’s affidavit sworn 9 March 2017 (filed in RCG CBD Proceeding) at [55]; Ex 35192). In its BAS return lodged on 28 May 2013, Earth Civil reported that nothing was paid to the ATO. Further, Earth Civil did not lodge a PAYG withholding annual report to the ATO, as required, for the 2013 financial year (see Aris Zafiriou’s affidavit sworn 9 March 2017 (filed in Earth Civil Proceeding) at [64]-[65]).

5. [72]

   Earth Civil was wound up in a creditors’ voluntary winding up pursuant to a resolution passed on 28 June 2013 by its directors (the same day that RCG CBD and Involved Recruitment were wound up also by way of a creditors’ voluntary winding up) (see ASIC company search extract).

6. [73]

   The liquidator’s evidence is that the financial records with which he was provided by Banq and/or the Insolvent Companies when conducting his statutory investigations into the affairs of Earth Civil were: BAS returns for the periods 1 July 2011 to 31 March 2013, a Payroll Activity Summary for the financial year ended 30 June 2013, and Employee PAYG summaries for the financial year ended 30 June 2013 (liquidator’s affidavit affirmed 8 February 2017 (filed in the Earth Civil Proceeding) at [36]-[37]).

7. [74]

   In November 2016, the Commissioner completed a tax audit of Earth Civil, as a result of which the Commissioner assessed Earth Civil for tax in amounts totalling $1,122,680.34 (see Aris Zafiriou’s affidavit sworn 9 March 2017 (filed in Earth Civil Proceeding) at [83]; Plaintiffs’ closing submissions, Sch 1).

8. [75]

   Proofs of debt were lodged in the liquidation of Earth Civil (as set out in Table D of the plaintiff’s closing submissions), all of which were adjudicated and rejected by the liquidator for lack of substantiating documentation (liquidator’s affidavit sworn 7 June 2018 at [38]-[39]).

9. [76]

   RCG CBD was incorporated on 16 May 2012 (on the same day that another entity associated with Banq, Involved Recruitment, was incorporated) (see ASIC company search extract).

10. [77]

    On incorporation, the directors of RCG CBD were recorded in ASIC records as Gino Cassaniti (commencing on 16 May 2012 and ceasing on 18 March 2014) and George Khalil (commencing and purportedly ceasing both as director and company secretary on the same day on 16 May 2012). The Form 484 changing directorships was dated 1 January 2013 and lodged on 28 May 2013 (the same dates as similar forms were lodged for Earth Civil and Involved Recruitment) and ostensibly signed by Gino Cassaniti (Ex K at 31691-31693). RCG CBD’s shareholders on incorporation were George Khalil and Gino Cassaniti. After 16 May 2012, Gino Cassaniti was recorded in the ASIC records as the sole director, secretary and shareholder of RCG CBD. RCG CBD’s registered office was the Banq Address up to 7 July 2013. RCG CBD’s tax agent was Banq.

11. [78]

    Pausing here, insofar as the Form 484 lodged on 28 May 2013, ostensibly signed by Gino Cassaniti on 1 January 2013, backdates the cessation of George Khalil as an office holder of RCG CBD to 16 May 2012 and appoints Gino Cassaniti as the sole director and company secretary of RCG CBD from that date. The plaintiffs say that, for the period from 16 May 2012 to 28 May 2013, ASIC’s records therefore recorded George Khalil as the sole director, shareholder and secretary. That must logically be correct. However, the prima facie position after lodgement on 28 May 2013 of the 1 January 2013 dated form is that George Khalil, in the absence of evidence to the contrary, is taken to have ceased as a director of the company on 16 May 2012, the same day as his appointment (see below as to the prima facie status of ASIC records). There has been no explanation proffered for the changes in directorships in this, or many of the other, companies.

12. [79]

    George Khalil was the sole signatory to RCG CBD’s bank account at all relevant times (Ex K at 31543-31544); and it is said by the plaintiffs (as adverted to above) that he was the controller (or “banker”) of all RCG CBD banking transactions. It is submitted that it is to be inferred that no monetary transactions involving RCG CBD occurred without the knowledge and approval of Gino Cassaniti and George Khalil, as directors, and George Khalil as the controller of its bank account.

13. [80]

    RCG CBD was wound up in a creditors’ voluntary winding up pursuant to a resolution of its director on 28 June 2013 (again, on the same day as Earth Civil and Involved Recruitment).

14. [81]

    RCG CBD did not lodge any income tax return before its liquidation (see Aris Zafiriou’s affidavit sworn 9 March 2017 at [56]); and did not lodge any BAS returns until 28 May 2013 (see Aris Zafiriou’s affidavit sworn 9 March 2017 (filed in the RCG CBD Proceeding) at [55]), (the same day as Earth Civil and Involved Recruitment). RCG CBD reported in its BAS that nothing was paid to the ATO (see Aris Zafiriou’s affidavit sworn 9 March 2017 (filed in the RCG CBD Proceeding) at [57]-[58]).

15. [82]

    The liquidator’s evidence is that the financial records with which he was provided by Banq and/or RCG CBD, when conducting his statutory investigations into the affairs of RCG CBD, were: an MYOB file containing a General Ledger for the financial year ended 30 June 2013; employee PAYG summaries for the financial year ended 30 June 2013; and a statutory report as to the company’s affairs signed by Gino Cassaniti (liquidator’s affidavit sworn 8 February 2017 (filed in the RCG CBD Proceeding) at [43]).

16. [83]

    In November 2016, the Commissioner completed a tax audit of RCG CBD, as a result of which the Commissioner assessed RCG CBD to tax liability totalling $6,209,097.72 (see Aris Zafiriou’s affidavit sworn 9 March 2017 at [10]; plaintiffs’ closing submissions, Sch 1).

17. [84]

    Proofs of debt were lodged in the liquidation of RCG CBD (Plaintiff’s closing submissions, Table D), all of which were adjudicated and rejected by the liquidator for lack of substantiating documentation.

18. [85]

    Bluemine was incorporated on 7 June 2012 (see ASIC company search extract).

19. [86]

    On incorporation, the sole director, secretary and shareholder of Bluemine was Andrew Barsa (the cousin of Peter Abboud, Michael Abboud, George Abboud and Katherine Khalil (née Abboud)). On 1 April 2013, Andrew Barsa ceased being a director and secretary of Bluemine. On the same day, Gino Cassaniti was appointed director and secretary of Bluemine and he remained the sole director, secretary and shareholder until its liquidation. The Form 484 changing directorships was dated 1 April 2013 and lodged on 20 July 2013 (Ex K at 51467-51469).

20. [87]

    Bluemine’s registered office and principal place of business was the Banq Address. Bluemine’s tax agent was Banq. Peter Abboud and Andrew Barsa were the signatories of Bluemine’s bank accounts.

21. [88]

    The plaintiffs contend for an inference to be drawn (for the reasons that I will elaborate in due course) that Gino Cassaniti, together with Peter Abboud and Fred Khalil, was in full control of Bluemine throughout November and December 2011. The plaintiffs say that, although it was recorded in ASIC documents that Andrew Barsa was the director of Bluemine, he was Gino Cassaniti’s “puppet” and that he was a straw director of Bluemine. (To describe him as Gino Cassaniti’s “puppet” may be overstating the position but, for reasons I set out in due course, I have confidently concluded that Andrew Barsa was a “straw” director.) They say that the use of straw directors was also part of the modus operandi of the conspirators in the implementation of the conspiracy. It is said that Andrew Barsa: did not have much, if anything, to do with the operation of Bluemine (T 913.22-913.35 and T 920.1-8); he provided evidence of the conspirators’ involvement in the administration and operation of Bluemine to the effect that the conspirators controlled Bluemine. It is noted that, despite initially saying that his cousin George Abboud asked him to be a director (T 912.10), Andrew Barsa went on to give evidence of the conspirators’ involvement (Banq: at T 913.29-34, T 915.33-42, T 916.1-45, T 918.30-34; Gino Cassaniti: at T 914.39 -915.35; Peter Abboud: at T 917.1-13). At T 913.34-40, Andrew Barsa said that he delegated the accounts of Bluemine to Gino Cassaniti, Peter Abboud, Fred Khalil, everyone that was involved, and he did not know who else was involved because “they” were managing.

22. [89]

    Bluemine was wound up in a creditors’ voluntary winding up pursuant to a directors’ resolution on 26 August 2013 (the same day as Diamondwish and Rackforce).

23. [90]

    The liquidator’s evidence is that the financial records with which he was provided by Banq and/or Bluemine, when conducting his statutory investigations into the affairs of Bluemine, were BAS records for the year ended 2013 and a statutory report as to the company’s affairs signed by Gino Cassaniti (liquidator’s affidavit sworn 8 February 2017 (filed in Bluemine Proceeding) at [46]).

24. [91]

    Bluemine did not lodge any income tax return before liquidation; did not lodge any BAS returns until 30 July 2013 (but for the June 2012 BAS lodged 5 July 2012 in respect of which it received a refund); and reported in its BAS that nothing was paid to the ATO (see Aris Zafiriou’s affidavit sworn 9 March 2017 (filed in Bluemine Proceeding) at [11], [75]-[79]).

25. [92]

    In October 2016, the Commissioner completed a tax audit of Bluemine, as a result of which, the Commissioner assessed Bluemine to tax liability totalling $5,138,203.36 (see Aris Zafiriou’s affidavit sworn 9 March 2017 (filed in Bluemine Proceeding) at [10]; plaintiffs’ closing submissions, Sch 1).

26. [93]

    Proofs of debt were lodged in the liquidation of Bluemine (see Table D), all of which were adjudicated and rejected by the liquidator for lack of substantiating documentation.

27. [94]

    Diamondwish was incorporated on 15 July 2011.

28. [95]

    On incorporation, the sole director, secretary and shareholder of Diamondwish was Frank Criniti. On 16 March 2012, Frank Criniti ceased being a director, secretary or shareholder of Diamondwish and Christopher James Keough Cherry was appointed to those positions. The Form 484 changing directorships was dated 16 March 2012 and lodged on 19 March 2012 (Ex K at 72942-72945).

29. [96]

    Pausing here, the plaintiffs point to Annexure B to Aris Zafiriou’s affidavit sworn 21 March 2017 (Ex K at 70966) as showing that Christopher Cherry’s connection with Banq was not confined to his role in Diamondwish (or Rackforce, for that matter). ASIC records show that, in the period between March 2012 and December 2014, Christopher Cherry was recorded as a director of ten other companies whose registered office was Banq at the time of the winding up of those companies. The plaintiffs say that it is to be inferred that Banq selected the new directors of these companies because the table in Annexure B of Aris Zafiriou’s affidavit shows that these same directors were also directors of other companies for which the Banq Address was the registered office. (I consider that inference is available and can comfortably here be drawn.) In this regard, the plaintiffs emphasise that Frank Criniti’s evidence (see below) is that he did not know Christopher Cherry before Mr Cherry was appointed as director of Diamondwish (and, indeed, his evidence was that he did not even know what the business of Diamondwish was). Thus, the plaintiffs say (and I accept) that the common link between Frank Criniti, Christopher Cherry and Diamondwish was Banq.

30. [97]

    The registered office of Diamondwish for the period from 15 July 2011 to 11 June 2014 was the Banq Address. Fred Khalil was Diamondwish’s tax agent from 15 July 2011. Frank Criniti and his brother, Dominic Criniti, were the signatories to Diamondwish’s bank account at all relevant times.

31. [98]

    Diamondwish was wound up on 26 August 2013 pursuant to a creditor’s voluntary winding up (the same day as Bluemine and Rackforce).

32. [99]

    The liquidator’s evidence is that the financial records with which he was provided by Banq and/or Diamondwish, when conducting his statutory investigations into the affairs of Diamondwish were: Diamondwish’s bank account statements from National Australia Bank (NAB); BAS for the periods 1 January 2013 to 30 June 2013; and bank reconciliations prepared by Banq (liquidator’s affidavit sworn 8 February 2017 (filed in the Diamondwish Proceeding) at [40]-[43], [45]-[47]).

33. [100]

    Diamondwish did not lodge any income tax return before liquidation (see George Khouri’s affidavit sworn 27 November 2019 (filed in Diamondwish Proceeding) at [23]); did not lodge any BAS returns until approximately three weeks prior to the appointment of the liquidator; and reported in its BAS that nothing was paid to the ATO (see Aris Zafiriou’s affidavit sworn 21 March 2017 at [53]-[55]).

34. [101]

    In June 2018, the Commissioner completed a tax audit of Diamondwish, assessing Diamondwish to tax liability totalling $1,439,573.61 (see George Khouri’s affidavit sworn 27 November 2019 (filed in Diamondwish Proceeding) at [13]; [26]; plaintiffs’ closing submissions, Sch 1).

35. [102]

    Proofs of debt were lodged in the liquidation of Diamondwish (see Table D), all of which were adjudicated and rejected by the liquidator for lack of substantiating documentation.

36. [103]

    Pausing here, the plaintiffs say that the professional relationship between Frank Criniti and his companies (Diamondwish and Rackforce, as to which see below) on the one hand, and Banq on the other hand, occurred through Gino Cassaniti on behalf of Banq; and that Peter Abboud and Fred Khalil were then involved in setting up accounting systems within the Criniti business. It is said that Gino Cassaniti, Peter Abboud and Fred Khalil all directed, at different times, where payments were to be made from Criniti company bank accounts; and also to which Criniti company bank accounts payments were to be made.

37. [104]

    Rackforce, then known as Fina Fries Pty Ltd, was incorporated on 4 February 2011.

38. [105]

    On incorporation, Frank Criniti was the sole director, secretary and shareholder of Rackforce. On 22 September 2011, Frank Criniti was replaced by Frank Scuteri as director and secretary of Rackforce. On 15 March 2012, Frank Scuteri was replaced by Christopher Cherry, who was the sole director, secretary and shareholder of Rackforce until its winding up.

39. [106]

    The registered office of Rackforce was the Former Banq Address for the period 4 February 2011 to 5 July 2011; and the Banq Address from 6 July 2011. Banq was Rackforce’s tax agent for the period 4 February 2011 to 25 August 2013. Frank Criniti, Dominic Criniti, Vanessa Scuteri, Frank Scuteri and Anthony Borg were the signatories to Rackforce’s bank account (Ex K at 90879).

40. [107]

    Rackforce was wound up by way of creditors’ voluntary winding up on 26 August 2013 (the same day as Bluemine and Diamondwish).

41. [108]

    Rackforce did not lodge any income tax return before liquidation (see George Khouri’s affidavit sworn 27 November 2019 (filed in Rackforce Proceeding) at [22]); did not lodge any BAS returns until 13 August 2013, approximately two weeks prior to being wound up; reported in its BAS that nothing was paid to the ATO and did not lodge a PAYG withholding annual report to the ATO, as required, for the 2013 financial year (see Aris Zafiriou’s affidavit sworn 13 April 2017 at [67]-[70]).

42. [109]

    The liquidator’s evidence is that the financial records with which he was provided by Banq and/or Rackforce, when conducting his statutory investigation into the affairs of Rackforce, were: an MYOB file containing a General Ledger for the 2013 and 2014 financial year; BAS for the periods 1 January 2011 to 30 June 2013; and bank reconciliations prepared by Banq (liquidator’s affidavit sworn 8 February 2017 (filed in the Rackforce Proceeding) at [38], [45]).

43. [110]

    In June 2018, the Commissioner completed a tax audit of Rackforce, as a result of which Rackforce was assessed for tax liability in the amount of $3,626,578.95 (see George Khouri’s affidavit sworn 27 November 2019 (filed in Rackforce Proceeding) at [16], [25] and [31]; plaintiffs’ closing submissions, Sch 1).

44. [111]

    Proofs of debt were lodged in the liquidation of Bluemine (see Table D), all of which were adjudicated and rejected by the liquidator for lack of substantiating documentation.

45. [112]

    The plaintiffs note that, in his affidavit sworn 25 March 2019, Fred Khalil has deposed to the effect that: in the cases of Earth Civil, Bluemine, RCG CBD, and Rackforce Gino Cassaniti asked him to meet the liquidator with Gino and to assist with completing the liquidation forms (such as the statement of affairs for directors), and Gino or the client provided him with a list of creditors of the respective company and he was given proxies by the creditors to attend and vote at the creditors’ meetings, which he did ([35]-[37], [43]-[44], [47]); and, in the case of Diamondwish, just prior to going into liquidation, Gino Cassaniti asked him to assist Gino to complete the paperwork and that he (Fred) was subsequently contacted by each known creditor of Diamondwish to attend the initial creditors’ meeting as proxy, which he did ([40]).

46. [113]

    Each of the rejected claims in the winding up of the Insolvent Companies was from an associate of Gino Cassaniti and Fred Khalil (they being, as noted above, two of the alleged five Primary Conspirators). It is noted that, in each case, at the relevant creditors’ meetings Fred Khalil was the proxy for the non-ATO creditors, those being: in the case of Earth Civil: Banq, Gino Cassaniti, GTO Holdings Pty Ltd (GTO Holdings), Lots of Luck Pty Ltd (Lots of Luck), and AKA Civil; in the case of RCG CBD: Banq, Gino Cassaniti, Lots of Luck and GTO Holdings; in the case of Bluemine: Banq, Gino Cassaniti and VL Macri Lawyers; in the case of Diamondwish: Banq, Gino Cassaniti, VL Macri Lawyers and GTO Holdings; in the case of Rackforce: Banq, VL Macri Lawyers, GTO Holdings, Criniti Group Pty Ltd (Criniti Group), Rima Criniti, Dominic Scuteri and Vanessa Scuteri.

The Primary Conspirators

1. [114]

   The five alleged Primary Conspirators (identified above), and certain of their related entities and associates, are described more fully below.

2. [115]

   The first of the alleged Primary Conspirators here considered is Banq. It is relevant, before turning to Banq, to note the following as to the accounting business which preceded Banq (and which business was in effect transferred to or assumed by it), namely Banq Accountants Pty Ltd (Banq Accountants).

3. [116]

   Banq Accountants, which was incorporated on 1 May 2008, carried on an accounting business. Its former directors and secretaries included: Ivana Cassaniti, from 1 May 2008 to 15 September 2009; Gino Cassaniti, for the periods from 15 September 2009 to 15 September 2009 and 7 January 2011 to 25 January 2014; and Fred Khalil, from 23 February 2009 to 7 January 2011.

4. [117]

   The shareholding of Banq Accountants was held as between Ivana Cassaniti (as to 13 ordinary shares) and Fred Khalil (as to 7 ordinary shares). Pausing here, it is perhaps of some relevance to note that the practice of Ivana Cassaniti holding the shares of the accounting entity through which her husband, Gino Cassaniti, carried on his profession as an accountant was therefore not confined to Banq; nor did it commence when Gino Cassaniti (as he later was) was facing bankruptcy. Ivana Cassaniti was not a qualified accountant, though it appears that she carried on at least some administrative work for the respective accounting businesses, as to which I say more in due course. There is a dispute as to the ambit of her role within the respective accounting businesses.

5. [118]

   The registered office and principal place of business of Banq Accountants was an address in York St, Wynyard (the Former Banq Address).

6. [119]

   On 20 December 2011 (i.e. some time after Banq had taken over or assumed its business – see below), Banq Accountants was wound up, pursuant to a creditors’ voluntary winding up, with a debt of $459,810.05 owing to the ATO (Ex K at 51089-51092).

7. [120]

   Banq Accountants and Advisors Pty Ltd (Banq), which is a defendant in each of the respective Proceedings but against whom, as noted above, no relief is here sought, was incorporated on 13 July 2009, with Fred Khalil as its sole director and secretary. (I refer in due course to Fred Khalil’s explanation as to why this was so.) Fred Khalil remained the sole director and secretary of the company until 19 June 2017 when Hussein El-Massri was recorded as being the sole director and secretary of Banq.

8. [121]

   The shareholders of Banq were Givana Pty Ltd (Givana), a company associated with Ivana Cassaniti (see below) (as to 60 ordinary shares); Fred Khalil (as to 30 ordinary shares); and Peter Abboud (as to 10 ordinary shares) (Ex K at 70991-70994). There was some evidence that, at a later stage, it was agreed that the shareholdings (or at least the distribution of profits between shareholders) would be changed, such that Givana’s interest would be reduced to 50% and the interests of Fred Khalil and Peter Abboud would be 25% each (presumably, to give Peter Abboud a greater interest in the business) but it is not clear that this was ever formally documented or implemented in any way.

9. [122]

   The registered office and principal place of business of Banq was an address in Canterbury Rd, Punchbowl (the Banq Address); at premises owned by GFP Holdings (Aust) Pty Ltd (GFP Holdings) (see below), which entity was the trustee of the GFP Unit Trust. The unit holders of the GFP Unit Trust were the same in name and number as the shareholders of GFP.

10. [123]

    Banq held itself out to be an accounting practice specialising in tax and accounting services, tax audits, insolvency, business building services and asset protection and strategies. It was in effect a continuation of the accounting business that had commenced as Banq Accountants. Banq was at the relevant times, the accountant and tax agent for each of the Insolvent Companies and for the Scheme Participants. The Banq Address was also at all material times the registered office and principal place of business for the Insolvent Companies and the majority of the Scheme Participants.

11. [124]

    The plaintiffs say that the directing wills and minds of Banq were the other four Primary Conspirators (namely, Gino Cassaniti, Fred Khalil, George Khalil and Peter Abboud) together with Ivana Cassaniti (as noted above, Ivana Cassaniti is not identified as a Primary Conspirator). There is a dispute as to the roles and responsibilities within Banq of those individuals, to which I refer in due course.

12. [125]

    Banq was wound up by the ATO on 18 July 2018, with a debt of $617,248 owing to the ATO.

13. [126]

    Givana, to which I have referred above, was incorporated on 9 October 2007. The sole director, secretary and shareholder of Givana is Ivana Cassaniti. Givana’s registered office was the Banq Address. Its principal place of business is an address in Lugarno, NSW. As noted above, it was at all times the majority shareholder of Banq.

14. [127]

    GFP Holdings, to which I have also referred above, was incorporated on 12 October 2010, with Fred Khalil as its director. Its issued shareholding was held as follows: Givana, as to six shares; F & K Khalil Pty Ltd (F & K Khalil), a company with which Fred Khalil was associated, as to three shares; and Peter Abboud, as to one share (Ex K at 37040-37041, 37044, 36045). Its registered office and principal place of business is the Former Banq Address. Ivana Cassaniti was recorded as its sole director from 8 August 2013. As noted above, it was the owner of the business premises occupied by Banq.

15. [128]

    GFP Holdings purchased the Banq premises for $684,383, spent $502,301 on improvements, and $101,562 on office equipment. In relation to this it owed: $435,216 to Givana; $217,608 to F&K Khalil; and $72,536 to Peter Abboud. Thus, between them, Peter Abboud and Fred Khalil (personally or through entities associated with them) contributed about 40% of the costs of acquisition or fit-out of the Banq premises.

16. [129]

    The next alleged Primary Conspirator is Gino Cassaniti, an accountant and registered tax agent. As noted above, Gino Cassaniti is: the 2nd defendant in the Earth Civil Proceeding; the 11th defendant in the RCG CBD Proceeding; the 11th defendant in the Bluemine Proceeding; the 8th defendant in the Diamondwish Proceeding; and the 5th defendant in the Rackforce Proceeding.

17. [130]

    Gino Cassaniti was a director and company secretary of Banq Accountants, and subsequently worked for Banq (he says as a consultant) when it took over the business of Banq Accountants. On the plaintiffs’ case and, arguably, on his own account of events, Gino Cassaniti appears to have been a (or the) principal “rainmaker” within the Banq accounting businesses (see, for example, Gino Cassaniti’s affidavit sworn 11 April 2019 at [4]). Gino Cassaniti was employed by, and the plaintiffs say was held out as a director of, Givana (the majority shareholder of Banq). The plaintiffs contend that Gino Cassaniti was one of the principals of Banq.

18. [131]

    Gino Cassaniti was recorded in the ASIC records as the sole director and company secretary of the following Insolvent Companies: Bluemine, from 1 April 2013 (though, the plaintiffs contend that from 7 June 2012 he was a deemed (or shadow) director of Bluemine) until 18 March 2014, and its sole shareholder until it was wound up on 26 August 2013 (Ex K at 11561-11564); Earth Civil from 1 July 2012 until 18 March 2014, and its sole shareholder until it was wound up on 28 June 2013 (Ex K at 10236-10240); and RCG CBD from 16 May 2012 until 18 March 2014 and its sole shareholder until it was wound up on 28 June 2013 (Ex K at 11345-11348). As above, each of those Insolvent Companies was wound up by way of a creditors’ voluntary liquidation purportedly commenced by Gino Cassaniti’s resolution as director (I say “purportedly” because there is an issue as to whether Gino Cassaniti signed or authorised various ASIC documents in relation to the companies involved in these Proceedings – see below.)

19. [132]

    The plaintiffs contend that Gino Cassaniti was a shadow or de facto director at all relevant times of all of the Insolvent Companies (i.e., including Diamondwish and Rackforce). Gino Cassaniti was also a director of Involved Recruitment.

20. [133]

    The plaintiffs point out that proofs of debt were subsequently lodged in Gino Cassaniti’s name or on his behalf in the creditors’ voluntary windings up of each of the Insolvent Companies.

21. [134]

    Gino Cassaniti was declared bankrupt in March 2014 on his own petition. The proof of debt lodged by the Commissioner in respect of Gino Cassaniti’s bankruptcy was in the sum of $1,126,241.19 (Ex K at 51138-51144). Gino Cassaniti was discharged from bankruptcy on 18 March 2017 by operation of s 149 of the Bankruptcy Act 1966 (Cth) (Bankruptcy Act).

22. [135]

    I set out in more detail in due course the evidence of Gino Cassaniti’s involvement in Banq and the impugned transactions.

23. [136]

    Gino Cassaniti served two affidavits in these Proceedings, one sworn 11 April 2019 and the second sworn 28 June 2019. He did not make himself available for cross-examination. I refer in due course to the circumstances in which that occurred and the agreed regime whereby his (and other witnesses’) affidavits were read subject to a s 136 limitation (i.e., as assertions, not as to the truth of the facts asserted) pursuant to s 136 of the Evidence Act 1995 (NSW) (Evidence Act).

24. [137]

    It is convenient here to refer to Ivana Cassaniti, Gino Cassaniti’s wife, though it is important to note (as emphasised in her submissions) that she is not an alleged Primary Conspirator (rather, it is alleged that she is a Scheme Participant). Ivana Cassaniti was ultimately separately represented from her husband (see below).

25. [138]

    Ivana Cassaniti is the 35th defendant in the Bluemine Proceeding; the 27th defendant in the Diamondwish Proceeding; and the 9th defendant in the Rackforce Proceeding. Ivana Cassaniti was a director of Discobell, Givana, and Givana Prestige.

26. [139]

    It is not disputed that Ivana Cassaniti performed some functions within Banq (described by her in her first affidavit as accounting work but subsequently corrected by her to be limited to bookkeeping). There is, however, a dispute as to the extent of her role within Banq (see below).

27. [140]

    Ivana Cassaniti has served three affidavits in these Proceedings sworn on 11 April 2019, 28 June 2019 and 3 March 2020, respectively. During the course of the hearing, Ivana Cassaniti was given leave (over the plaintiffs’ objection) to file the 3 March 2020 affidavit correcting various matters in her earlier affidavits (including the capacity in which she deposes she held her interest in Givana) (as to which I say more in due course). Although initially a contrary forensic position had been taken, ultimately (after Mr Cook SC was retained to represent her) Ivana Cassaniti made herself available for cross-examination during the course of the hearing (as to which, see my observations in due course).

28. [141]

    Discobell is the 34th defendant in the Bluemine Proceeding. According to the ASIC record, Ivana Cassaniti was the sole company director and secretary of Discobell from 25 August 2011 to 8 August 2013, and again from 12 February 2014. Fred Khalil was the sole director and shareholder of Discobell from 8 August 2013 to 19 February 2014 (Ex K at 53091-53093; T 1137). Ivana Cassaniti deposed that Discobell was formed to take an interest in a Criniti restaurant in Castle Hill (Ivana Cassaniti’s affidavit sworn 11 April 2019 at [21]).

29. [142]

    Ivana Cassaniti’s evidence is that, apart from one transaction in which she was involved in relation to Discobell (payment of an amount by way of its contribution to the fit-out of restaurant premises) she had nothing to do with Discobell (and she was not aware that she was named as a signatory to one of its three bank accounts – see, for example, T 1138, 1180).

30. [143]

    Initially, Gino Cassaniti, Ivana Cassaniti and Discobell were together jointly represented in the Proceedings. However, by the commencement of the hearing, Ivana Cassaniti and Discobell had separate representation from that of Gino Cassaniti and, during the course of the hearing, Discobell itself also retained separate representation.

31. [144]

    Gino Cassaniti was represented by a succession of counsel during the course of the hearing (Mr Feller SC and Mr Brewer of Counsel at various times and Mr Young of Counsel throughout). Ivana Cassaniti was ultimately represented by both Mr Cook SC and Mr Katsoulas, although at the commencement of the hearing she was represented only by Mr Katsoulas of Counsel. Discobell was ultimately represented by Mr Allen of Counsel.

32. [145]

    Next, both Fred and George Khalil (who are brothers) are alleged to be Primary Conspirators. They are defendants in all of the Proceedings.

33. [146]

    Fred Khalil is Katherine Khalil’s husband. Katherine Khalil is the sister of Peter Abboud, Michael Abboud and George Abboud; and the cousin of Andrew Barsa and George Said, each of whom features in one or more of the Proceedings.

34. [147]

    Fred Khalil was a director of the following companies: Banq; Kamikaze Teppanyaki; Sivasli; Investmint (now deregistered); Involved Recruitment (also now deregistered); and Discobell.

35. [148]

    George Khalil was an employee of Banq engaged to provide accounting and administrative services. From ASIC records it appears that George Khalil was a director of some 11 companies associated with Banq (of which nine were wound up in creditors’ voluntary liquidations) (Ex K at 31534-31538). Notably, he was a director of RC Group Aust; RCG CBD, Investmint and Involved Recruitment. In relation to RCG CBD and Involved Recruitment, he was appointed a director on 16 May 2012 and purportedly ceased his directorship on the same day (Ex K at 30237-30240, 73751-73755). As adverted to above, he was at all material times the sole signatory for RCG CBD’s bank account.

36. [149]

    On 24 September 2014, a debtor’s petition for George Khalil was accepted by the Official Receiver (Ex K at 31539). As at 21 March 2017, Aris Zafiriou deposed in his affidavit of the same date, that George Khalil remained an undischarged bankrupt (at [30]; Ex K at 50976). The Commissioner lodged a proof of debt in respect of the bankruptcy of George Khalil in the sum of $245,761.43 (Ex K at 31540).

37. [150]

    George Khalil did not serve an affidavit in any of the Proceedings. Fred Khalil served an affidavit sworn 25 March 2019 (see Ex K at 75653). Fred Khalil did not make himself available for cross-examination on that affidavit.

38. [151]

    Fred and George Khalil, and various entities associated with them were represented throughout the Proceedings by Mr Robertson of Counsel.

39. [152]

    Katherine Khalil (as noted above, Fred Khalil’s wife and the sister of both Peter Abboud, Michael Abboud, George Abboud and Fadi Abboud), was formerly a defendant in various of the Proceedings, as was the company of which she was a director – Kito Investments. Claims against Katherine Khalil and Kito Investments were settled during the course of the hearing. Until the claims against them were settled, Katherine Khalil and Kito Investments were represented separately from Fred and George Khalil (by Mr Gupta, solicitor).

40. [153]

    George Said is Fred and George Khalil’s cousin (T 848.5). George Said was a director (together with Peter Abboud) of Involved Recruitment (now deregistered) for one day on 16 May 2012 (Ex K at 33349-33351). George Said was represented by Mr Robertson of Counsel, who, as noted above, also appeared for the Khalil defendants. George Said gave evidence under compulsion of a subpoena issued by the plaintiffs.

41. [154]

    Finally, Peter Abboud is an alleged Primary Conspirator. As noted above, he is a 10% shareholder of Banq.

42. [155]

    Peter Abboud is the husband of Mandi Abboud (née Kaleda); the brother of Katherine Khalil (née Abboud), Michael Abboud, George Abboud and Fadi Abboud; the brother-in-law of Monica Abboud and (previously) Jillian Abboud (née Edwards) (the ex-wife of George Abboud); and the cousin of Andrew Barsa.

43. [156]

    Peter Abboud was a director of Reliance Cleaning; LFC Holdings (as trustee for the LFC Holdings Trust); and Jola Holdings.

44. [157]

    Peter Abboud served an affidavit in the Proceedings sworn on 22 March 2019. Peter Abboud did not make himself available for cross-examination.

45. [158]

    Michael Abboud is the brother of Peter Abboud, George Abboud, Fadi Abboud and Katherine Khalil. He was a director of Jola Holdings. Michael Abboud and Jola Holdings were formerly defendants in the Bluemine Proceeding and represented by Mr McDonald of Counsel. The claims against them were settled.

46. [159]

    George Abboud (now in Thailand) is the brother of Peter Abboud, Michael Abboud, Fadi Abboud and Katherine Khalil and cousin of Andrew Barsa. His ex-wife, Jillian Abboud (née Edwards), was a director of Jian Holdings (Aust) Pty Ltd (Jian Holdings), which is now deregistered.

47. [160]

    Peter Abboud was represented throughout the hearing by Mr Gupta, solicitor. Mr Gupta also represented Michael Abboud, Jillian Abboud (née Edwards), Katherine Khalil, Jian Holdings, Jian Investments Pty Ltd (Jian Investments) and Kito Investments (see T 251) (although I note that neither of Jian Holdings or Jian Investments was named as a defendant in any of the Proceedings).

Scheme Participants

1. [161]

   Due to the various settlements, I list for clarity the remaining alleged Scheme Participants: Andre Abou-Antoun; Michael Abou-Antoun; AKA Civil; AKA NSW; Borg Civil; Borg Family; Michael Borg; Tanya Borg; Ivana Cassaniti; Scott Crabbe; Discobell; John Haddad; Kamikaze Teppanyaki; LAM Haulage; MAL Land Group; George Said; Sivasli; and The Great Brothers. I set out relevant details as to various of the Scheme Participants below.

2. [162]

   Andre Abou-Antoun, Michael Abou-Antoun and Laurance Abou-Antoun are brothers. They were joined as defendants (with the AKA Parties, i.e., AKA Civil, AKA NSW, LAM Haulage, MAL Land Group and The Great Brothers) in both the Earth Civil and Bluemine Proceedings.

3. [163]

   Andre Abou-Antoun was a director of LAM Haulage and The Great Brothers.

4. [164]

   Michael Abou-Antoun was a director of Earth Civil; AKA Civil; AKA NSW; MAL Land Group and The Great Brothers. Michael Abou-Antoun’s verification of his defence discloses that he was residing in the United States at the time. It was not suggested that he was in the jurisdiction at the time of the hearing. Michael Abou-Antoun did not serve an affidavit in the Bluemine or Earth Civil Proceedings.

5. [165]

   Laurance Abou-Antoun (the 22nd defendant in the Bluemine Proceeding, with whom settlement was reached during the course of the hearing) was a director of LAM Haulage and The Great Brothers.

6. [166]

   As noted above, Andre Abou-Antoun, Michael Abou-Antoun and the AKA Parties were represented throughout the hearing by Mr Johnson of Counsel and occasionally by Ms Seiden SC. Laurance Abou-Antoun was represented separately by Mr Eardley of Counsel.

7. [167]

   It is relevant here to note that, throughout the Proceedings, Andre Abou-Antoun invoked the privilege against self-incrimination and the accusatorial privilege. In particular, prior to the hearing, orders were obtained by consent permitting Michael and Andre Abou-Antoun (and related corporate defendants) not to plead to part of the pleaded claims in the Earth Civil and Bluemine Proceedings (namely, the allegations at [237] of the respective pleadings) until after the close of the plaintiffs’ case (see the orders made by Rees J on 12 February 2019).

8. [168]

   There was some debate as to Andre Abou-Antoun’s position (which I discuss below) in relation to an affidavit he had served (but which was ultimately not read in the Proceedings – see T 105) and his objection (ultimately not pressed) to the tender of the transcript of evidence from his compulsory examination by the ATO pursuant to s 353-10 of Schedule 1 of the Taxation Administration Act on 31 May 2018 and 31 July 2018 (see Ex P). Ultimately, a procedure was agreed between the plaintiffs and the AKA Parties whereby Andre Abou-Antoun gave evidence under compulsion (pursuant to a subpoena issued by the plaintiffs) and in respect of which he sought and obtained the protection of a s 128 certificate in respect of evidence that might tend to expose him to criminal liability or a civil penalty offence. On that basis, the AKA Parties’ objection to the admission of extracts from Andre Abou-Antoun’s ATO transcript was not maintained – see below. In those circumstances, I gave some latitude to the plaintiffs to cross-examine Andre Abou-Antoun (over objection from his Counsel) where evidence given by Andre Abou-Antoun was not favourable to them; (in particular, where Andre Abou-Antoun appeared to resile from evidence he had given in his ATO examination).

9. [169]

   The Borg Parties are Michael and Tanya Borg and associated companies: Borg Family and Borg Civil. Michael Borg is a director of Borg Civil. Tanya Borg, Michael’s wife, is a director of Borg Family. Tanya is now a qualified accountant (but was still studying accounting at the relevant times). Both were relatively young when the impugned transactions occurred.

10. [170]

    All four of the Borg Parties are defendants in the RCG CBD Proceeding but only Tanya Borg and Borg Family now remain as defendants in the Bluemine Proceeding (a settlement having been reached with the other Borg Parties in the Bluemine Proceeding).

11. [171]

    In the RCG CBD Proceeding, the Borg Parties rely on a further amended defence filed on 3 April 2020 to the third further amended statement of claim. The plaintiffs’ reply to that defence was filed on 17 April 2020.

12. [172]

    In the Bluemine Proceeding, Tanya Borg and Borg Family rely on their further amended defence to the RCG CBD third further amended statement of claim filed on 6 April 2020. The plaintiffs’ reply to that defence was filed on 19 June 2020.

13. [173]

    The Borg Parties were represented ultimately by Mr Condon SC and, throughout the Proceedings, by Mr Afshar of Counsel.

14. [174]

    In both Proceedings, the Borg Parties relied on affidavits sworn by Tanya Borg on 4 December 2018 and 27 February 2020, respectively.

15. [175]

    Scott Crabbe was a director of Reliance Cleaning (and is a defendant in the RCG CBD Proceeding). As noted above, he has not filed a defence and default judgment is here sought against him. Scott Crabbe gave evidence under compulsion of a subpoena issued by the plaintiffs.

16. [176]

    Peter Abboud’s evidence is that Scott Crabbe “ran the cleaning business [of Reliance Cleaning] and maintained the relationships with customers who were building managers across Sydney”; and that Scott Crabbe prepared the tenders for all new work and negotiated all contracts with the customers and from time to time he, Peter Abboud, assisted Scott Crabbe “by reviewing tender spreadsheets and ensuring calculations were correct” (Peter Abboud’s affidavit sworn 22 March 2019 at [40]).

17. [177]

    John Haddad was a director of North Shore Property Development Pty Ltd (in liq) (North Shore) and Centerium Wholesalers. As noted above, default judgment is sought against him both in the RCG CBD and Bluemine Proceedings.

Other entities and individuals

1. [178]

   In this section of the reasons, I detail other entities and individuals who featured in one or more of the impugned transactions, some of whom have already been defined above but to whom, for convenience, I will refer again below. I also note that the plaintiffs previously had claims against many of these individuals and entities as Scheme Participants prior to settlement being reached. Other more minor persons or entities in the overall chronology of events are referred to in the Dramatis Personae schedule attached.

2. [179]

   ASIC records show that Frank Criniti was appointed the sole director and company secretary of Auswide upon its incorporation on 16 December 2009 (Ex K at 72052-72057). He ceased those positions on 21 May 2012, when Aloeseiafi Faanoi (see below) was appointed sole director and company secretary.

3. [180]

   Frank Criniti was a director of Diamondwish, Rackforce, Auswide and a succession of eponymously named Criniti’s companies (including Criniti’s Darling Harbour, Criniti’s Woolloomooloo; Criniti’s Castle Hill, and Criniti’s Wood Fire Pizza). Frank Criniti was formerly a defendant in the Diamondwish and Rackforce Proceedings and gave evidence under compulsion pursuant to a subpoena issued by the plaintiffs (and with the protection of a s 128 certificate in relation to certain of his evidence).

4. [181]

   Frank Criniti does not dispute that he was the controlling mind of the following corporations in the relevant period: Diamondwish; Rackforce; Criniti’s Wood Fire Pizza; Auswide; and, from at least 18 January 2012, Givana Prestige.

5. [182]

   Gino Cassaniti submits that in the relevant period, Frank Criniti controlled the following bank accounts: NAB Bank Account for Rackforce (account ending #9826) (Rackforce Account); NAB Bank Account for Diamondwish (account ending #1146) (Diamondwish Account); NAB Bank Account for Auswide Auto Wholesalers (account ending #0506) (Auswide Account); NAB Bank Account for Criniti’s Wood Fire Pizza (account ending #1306) (CWP Account); and NAB Gold Banking account in the name of Franceso Anthony Criniti (account ending #0593) (Frank Criniti’s Account).

6. [183]

   Various Criniti family members or extended family members were also defendants in the Proceedings and/or feature in the evidence: Rima Criniti (Frank Criniti’s ex-wife); Cosimo Criniti (Frank Criniti’s father), a director of Cosi Holdings; Dominic Criniti (Frank Criniti’s brother), a director of Cosimo Foods; Kathy Criniti (Frank Criniti’s sister) who is married to Karl Haidenbauer (a recipient of various impugned payments); and Sandy Tanos, Rima Criniti’s mother (who was involved in some capacity in a bookkeeping role for certain of the Criniti companies before the involvement of Banq).

7. [184]

   Dominic Moio (who Frank Criniti says was an immigration lawyer who ran a firm known as Banq Lawyers – see T 563) was a director of Criniti’s Darling Harbour. Pierre Moio (Dominic Moio’s son) (who later became an investor in one of the Criniti restaurant businesses) was the person who introduced Frank Criniti to Gino Cassaniti. Frank Criniti gave evidence that he and Gino Cassaniti “fell out” with Pierre Moio at some stage (T 463).

8. [185]

   It is relevant here to note that one of the Criniti companies, then named Criniti’s Pty Ltd, which was incorporated on 18 February 2003 (prior to Frank Criniti’s involvement with Gino Cassaniti and the two Banq accounting businesses), was later renamed Zagoonda Pty Ltd (Zagoonda) before being wound up on 5 January 2010. Frank Criniti and Cosimo Criniti were the directors of Criniti’s Pty Ltd/Zagoonda from February 2003 to 15 December 2008. At the time of its winding up, Mohamad Irshad Rosunally was the director of the company and its registered office was the Banq Address. The ASIC Form 484 recording the directorship changes as at 15 December 2008, which was signed on that date, was lodged on 27 October 2009. (The plaintiffs point to this as an example of what they characterise as the “cavalier” treatment of corporate entities and the backdating of documents by Gino Cassaniti or others at Banq. Frank Criniti had not, on his evidence, met Gino Cassaniti in December 2008, yet the ASIC Form lodged on 27 October 2009 is only consistent with Banq’s involvement – hence the overwhelming inference that the form was backdated.)

9. [186]

   ASIC records disclose that George Khalil was a director and the company secretary of Bright Star Hire Pty Ltd (Bright Star Hire) from 27 December 2013 until 24 September 2014. The registered office of Bright Star Hire was the Banq Address. Banq was the tax agent for Bright Star Hire from 14 October 2013 to February 2014 (Ex K at 33711). Ozem Kassam and Jason Tang were appointed joint liquidators of Bright Star Hire in a creditor’s voluntary winding up on 10 February 2014 (Ex K at 31414, item 20).

10. [187]

    Christopher Cherry was a director of several companies associated with Banq, notably, Crinz, Rackforce and Diamondwish. Christopher Cherry gave evidence under compulsion of a subpoena issued by the plaintiffs.

11. [188]

    ASIC records disclose that George Khalil was also a director and the company secretary of Compbiz, having been appointed to those positions on 1 January 2014 and purportedly ceasing on 24 September 2014. Michael Chidiac was the former director of Compbiz (Ex K at 31415, item 28). The registered office of Compbiz was the Banq Address. Banq was the tax agent for Compbiz from 15 November 2010 to 10 February 2014 (Ex K at 33716). It appears that Compbiz was an IT support contractor which provided IT support services to Banq at relevant times. Ozem Kassam and Jason Tang were appointed joint liquidators of Compbiz in a creditor’s voluntary winding up on 10 February 2014.

12. [189]

    ASIC records disclose that George Khalil was a director and the company secretary of EM and EN Investments Pty Ltd (EM and EN Investments), having been appointed to those positions on 23 August 2013 and purportedly ceasing on 24 September 2014. Banq was EM and EN Investments’ tax agent for the period 27 September 2013 to 17 November 2013 (Ex K at 33731). Ozem Kassam and Jason Tang were appointed joint liquidators of EM and EN Investments in a creditor’s voluntary winding up on 10 February 2014 (Ex K at 31415, item 44).

13. [190]

    Aloeseiafi Faanoi was a director of Auswide, Excavation and Jian Holdings. He was also recorded as a director of Demolition, shortly before its winding up.

14. [191]

    The plaintiffs point out that the ASIC records show that between March 2012 and December 2014, Aloeseiafi Faanoi was a director of seven other companies whose registered office was Banq at the time of the companies being wound up. The plaintiffs say that it is to be inferred (and I accept that such an inference is available and should here be drawn) that Banq selected the new directors (such as Aloeseiafi Faanoi) of the companies which were to be wound up shortly following the change of directorship because the table marked Annexure B to Aris Zafiriou’s affidavit sworn 21 March 2017 shows that these same directors were also directors of other companies for which Banq was the registered office. It is said that the modus operandi for the winding up of those companies was effectively the same as that deployed by Gino Cassaniti for the Insolvent Companies and equally demonstrative of what is said to be Gino Cassaniti’s “cavalier” use of creditor’s voluntary winding ups for (his own or his clients’) benefits to the exclusion of bona fide creditors (invariably the ATO).

15. [192]

    George Khalil’s ASIC personal name extract (see Ex K at 31534-31538) records that he was a director and the company secretary of Genuine Constructions Pty Ltd (Genuine Constructions), having been appointed to those positions on 27 December 2013 and purportedly ceasing on 24 September 2014. Ozem Kassam and Jason Tang were appointed joint liquidators of Genuine Constructions in a creditor’s voluntary winding up on 10 February 2014 (Ex K at 31415, item 58).

16. [193]

    Givana Prestige was incorporated on 29 November 2010. Its registered office upon incorporation was the Former Banq Address and from 6 July 2011, the Banq Address (Ex K at 72946). Givana Prestige’s sole director, company secretary and shareholder was: from 29 November 2010 to 18 January 2012 – Ivana Cassaniti; from 18 January 2012 to 10 May 2012 – David Rizk; and from 10 May 2012 – Frank Criniti. The Form 484 for Givana Prestige was lodged on 23 February 2012 (Ex K at 70209). The plaintiffs say that it was backdated purportedly to show that Ivana Cassaniti’s directorship ceased on 18 January 2012. Ivana Cassaniti’s evidence was that Givana Prestige was a dormant company and that, at Gino Cassaniti’s request she, in effect, handed it over to Frank Criniti at no charge.

17. [194]

    The ASIC extract for Investmint records that George Khalil was the sole director, company secretary and shareholder of Investmint from 19 February 2014 to 24 September 2014. He took over these positions from Fred Khalil, who held them from 5 October 2011 to 24 September 2014 (Ex K at 53088). Investmint’s registered office and principal place of business was the Banq Address. Banq was the tax agent for Investmint (Ex K at 53315). Investmint was deregistered by ASIC under s 601AB of the Corporations Act (the plaintiffs say that this was presumably for the matters identified in s 601AB(1) or (1A) of the Corporations Act).

18. [195]

    Involved Recruitment was incorporated on 16 May 2012. The ASIC extract for Involved Recruitment records that Gino Cassaniti, George Said and George Khalil were all recorded (at various times) in the ASIC records as directors of Involved Recruitment (Ex K at 33349). George Said and George Khalil both have 16 May 2012 recorded as their date of appointment and resignation.

19. [196]

    There were successive Form 484s filed by Banq on behalf of Involved Recruitment (Ex K at 39337-39342): the first form was lodged on 13 May 2013 (apparently signed by George Khalil on 13 May 2013 with an electronic lodgement stamp indicating that it was lodged on that day), recording the appointment of George Khalil and removal of George Said as directors on 16 May 2012; the second Form 484 was lodged on 28 May 2013 (that Form 484 was purportedly signed by Gino Cassaniti on 1 January 2013 and the electronic lodgement stamp indicates that it was lodged on 28 May 2013), recording Gino Cassaniti as a director on 16 May 2012. (The plaintiffs suggest that the second Form 484 lodged on 28 May 2013 (one month before Involved Recruitment’s creditors’ voluntary winding up) and recorded as being signed by Gino Cassaniti on 1 January 2013 (12 days earlier than the first form was signed), apparently sought to negate the fact of George Khalil’s appointment after it had happened.)

20. [197]

    On the various versions of the ASIC Forms, therefore, George Khalil was therefore either the sole director, company secretary and shareholder of Involved Recruitment (having been appointed to those positions on 16 May 2012 and purportedly ceasing on 16 May 2012) or a co-director with one or both of Gino Cassaniti and George Said at that time. Involved Recruitment’s registered office and principal place of business was the Banq Address. Banq was the tax agent for Involved Recruitment (Ex K at 33748). Involved Recruitment was wound up in a creditor’s voluntary winding up on 28 June 2013 (the same day that RCG CBD and Earth Civil were wound up) and Mitchell Ball was appointed the liquidator.

21. [198]

    George Khalil’s ASIC personal name extract records that he was a director and the company secretary of Little Johnny Pty Ltd (Little Johnny), having been appointed to those positions on 1 January 2014 and purportedly ceasing on 24 September 2014 (Ex K at 31534-31538). Ozem Kassam and Jason Tang were appointed joint liquidators of Little Johnny in a creditor’s voluntary winding up on 10 February 2014 (Ex K at 31416, item 71).

22. [199]

    David Murray was a director of Ignite Promotions Pty Ltd (Ignite Promotions), a company associated with the Nassar group of companies.

23. [200]

    Fred Naesse was a director of Coolfind Pty Ltd (Coolfind).

24. [201]

    Elias Nassar and the company of which he was director, Blackrock Media Australia Pty Ltd (Blackrock Media), were both formerly defendants in both the Bluemine and RCG CBD Proceedings.

25. [202]

    Elias Nassar was part of an associated group of alleged Scheme Participants comprised of: Blackrock Media; Wenman Brimak Investments Pty Ltd (Wenman Brimak) as trustee for Wenman Investments Trust; his wife, Wendy Nassar, who was director of Wenman Brimak; and David Murray who (as noted above) was a director of Ignite Promotions. All of these defendants reached a settlement with the plaintiffs.

26. [203]

    Elias Nassar gave evidence under compulsion of a subpoena issued by the plaintiffs (and with the benefit of a s 128 certificate in that regard).

27. [204]

    The plaintiffs identify Vipul Parekh as a Banq employee. He is referred to in various documents as an operations manager or accounts manager of Reliance Cleaning or companies in the RC Group of companies (see, for example, Ex K at 38534). Peter Abboud, at [40] of his affidavit sworn 22 March 2019 has deposed that Reliance Cleaning employed Vipul Parekh as an accounts manager.

28. [205]

    The ASIC extract for RC Group Aust records that George Khalil was the sole director and the company secretary of RC Group Aust, having been appointed to those positions on 19 May 2013 and purportedly ceasing on 24 September 2014 (Ex K at 31767). RC Group Aust’s registered office was an address in Glenfield NSW. Banq was the tax agent for RC Group Aust (Ex K at 31779). David Iannuzzi and Murray Godfrey were appointed joint liquidators of RC Group Aust in a creditor’s voluntary winding up on 18 August 2014.

29. [206]

    David Rizk, who was Frank Criniti’s personal assistant and driver, was appointed a director of Givana Prestige on 18 January 2012 and ceased as a director on 10 May 2012 (see below the evidence he gave as to the reasons for this) (Ex K at 72946-72949). David Rizk gave evidence under compulsion of a subpoena issued by the plaintiffs.

30. [207]

    George Khalil was a director and the company secretary of RPS Security, having been appointed to those positions on 1 September 2013 and purportedly ceasing on 24 September 2014 (ASIC personal name extract, Ex K at 31537). RPS Security’s registered office was the Banq Address (Ex K at 31417, item 97). David Iannuzi and Murray Godfrey were appointed joint liquidators of RPS Security in a creditor’s voluntary winding up on 27 May 2014. Banq was the tax agent for RPS Security (Ex K at 33775).

31. [208]

    Tarun Shah was an accountant initially working for Banq who was then employed (Frank Criniti says on the suggestion of Peter Abboud and Gino Cassaniti) for a period in-house in one or more of Frank Criniti’s companies (in the accounts section) before later again working for Banq. Tarun Shah gave evidence under compulsion of a subpoena issued by the plaintiffs.

32. [209]

    Mario Sande and his brother Michael Sande, together with others associated with Statewide entities, formed another group of Scheme Participants against whom the claims in the Proceedings were largely settled. The other former defendants in the RCG Proceeding who formed part of the Statewide Parties are: Statewide Printing (3rd defendant), State Wide Design (20th defendant), Richard Attard (22nd defendant) and Michael Sande (23rd defendant).

33. [210]

    Mario Sande and Richard Attard were directors of both of the Statewide companies. Michael Sande was a director of only State Wide Design. Mario Sande (the former 21st defendant in the RCG CBD Proceeding) gave evidence under compulsion pursuant to a subpoena issued by the plaintiffs and with the benefit of a s 128 certificate.

34. [211]

    George Khalil was the sole director, company secretary and shareholder of Workforce Unlimited having been appointed to those positions on 18 May 2011 and purportedly ceasing on 29 February 2012 (Ex K at 31763). Workforce Unlimited’s registered office and principal place of business was the Former Banq address and then the Banq Address. Banq was the tax agent for Workforce Unlimited (Ex K at 31778). Ozem Kassem and Robert Kite were appointed joint liquidators of Workforce Unlimited in a creditors’ voluntary winding up on 30 August 2012.

The Scheme

1. [212]

   The broad details of the alleged Scheme, common (with minor differences) across each of the Proceedings, are that the Insolvent Companies were incorporated and: received payments for purported invoices for goods or services not provided or not to the value of the invoice; received payments with or without purported invoices in the nature of taxable income for the purported goods or services; incurred liability for GST and income tax that would not otherwise have accrued; did not comply with BAS or tax return requirements; incurred penalties by the late filing of BAS or tax returns; without receiving anything in return, paid away the majority of payments received; then had no ability to satisfy GST, PAYG and income tax liabilities incurred from payments received; incurred penalties for non-payment of those tax liabilities; and were then wound up in a creditors’ voluntary winding up (commenced by director(s)’ resolutions), in which all creditors other than the ATO were related or associated parties and proofs of debt for purported creditors other than the ATO were rejected.

2. [213]

   Pausing here, for Ivana Cassaniti it is said that the alleged Scheme was an unsophisticated one (premised on creating fictitious invoices for the taxpayer to claim as deductions and then returning the money to the taxpayer) that would readily be exposed by any sort of scrutiny (similar comment is made in the submissions for Gino Cassaniti). That may well be the case. It does not, however, answer the question whether (unsophisticated or not) there was such a scheme. There is no doubt a range of tax avoidance schemes that may be put in place from time to time – presumably some are more sophisticated than others. The relevant question is whether there was the Scheme alleged in this case and, if so, who implemented and had the requisite knowledge of it.

3. [214]

   The plaintiffs say that, in each of the five Proceedings, sets of transactions were recommended by the Primary Conspirators, and entered into by the Scheme Participants, that were of no benefit to the Insolvent Companies but were of great benefit to entities owned and/or associated with the Scheme promoters and participants. The plaintiffs say that, in recommending and engaging in the Scheme, the Primary Conspirators and Scheme Participants wilfully disregarded the obvious risk that arose from the conspiracy (namely, that the Scheme carried the risk of payments to the Insolvent Companies actually being treated as taxable income and the Insolvent Companies being assessed on those same transactions).

4. [215]

   It is said that, by their conduct, the Paying Participants triggered the risk of tax assessment and that they are thereby jointly and severally liable for the whole of the tax liability; in addition, it is said that they are liable for the loss of the money paid away (in both instances for losses proportionate to their participation in the Scheme). As to the Receiving Participants, the plaintiffs submit that they are liable under s 588F of the Corporations Act and liable to pay equitable compensation. Additionally, it is said that, by their conduct, the Receiving Participants are jointly and severally liable for the risk of tax assessment by receiving the money, which was an essential part of the Scheme (and which of itself triggered the risk of assessment for taxation).

5. [216]

   The loss caused to each of the Insolvent Companies as a result of the Scheme is identified as being twofold: that they received nothing in return or any benefit for the money that they paid away in uncommercial transactions (for which the liquidator’s total claims amount to $33,471,425); and that the Insolvent Companies incurred debts to the ATO totalling $13,921,379 which they were left unable to pay.

6. [217]

   The uncommercial transaction claims (pursuant to s 588F of the Corporations Act) are a subset of the money said to have been improperly paid away by the Insolvent Companies. It is said that Gino Cassaniti (a Primary Conspirator) incorporated, controlled, and wound up, each of Bluemine, Earth Civil, and RCG CBD and that each of those companies entered into uncommercial transactions within the meaning of s 588F of the Corporations Act, respectively in the amounts of $4.8 million, $965,000, and $2.9 million, during the two year relation-back period up until they were wound up. As to Diamondwish and Rackforce, it is said that Gino Cassaniti and the other Primary Conspirators variously and individually implemented the Scheme whereby, for the purposes of the s 588F claims, those companies paid away $7.7 million in the period that they were in existence prior to their winding up. (The liquidator accepts that the amounts claimed in respect of Bluemine, Diamondwish, Rackforce and RCG CBD will require adjustment in order fairly and equitably to take settlements that have been reached with other participants into account.)

7. [218]

   The plaintiffs say that an important feature of the Scheme was that the Insolvent Companies existed or traded for only a short period of time. Indeed, Bluemine was incorporated on 7 June 2012 and wound up 14 months later on 26 August 2013; RCG CBD was incorporated on 16 May 2012 and wound up 13 months later on 28 June 2013; Earth Civil was incorporated on 25 May 2011, commenced activities in or around 9 August 2012 and wound up ten months later on 28 June 2013; Diamondwish was incorporated on 15 July 2011 and wound up 24 months later on 26 August 2013; and Rackforce was incorporated on 25 October 2011 and wound up 22 months later on 26 August 2013.

8. [219]

   As to the relief claimed in each Proceeding, it falls within the following categories.

9. [220]

   Against recipients of money from uncommercial transactions with the Insolvent Companies, declaratory relief pursuant to s 588FB and/or s 588FDA(1), and/or s 588FE of the Corporations Act; and consequential orders pursuant to s 588FF for repayment of the amounts received from the uncommercial transactions.

10. [221]

    Against the Primary Conspirators (other than Banq) and the Scheme Participants, declarations that they engaged in dishonest and fraudulent conduct and were directory or indirectly knowingly concerned in or party to or assisted in breaches of fiduciary duty by Gino Cassaniti and breaches of his duties pursuant to ss 180 and/or 181 and/or 182 of the Corporations Act; and consequential orders for repayment of trust assets, or damages or compensation pursuant to s 1317H of the Corporations Act and/or equitable compensation.

11. [222]

    Against the Primary Conspirators and the Scheme Participants, an order that they repay trust assets and/or pay damages and /or equitable compensation as knowing recipients or knowing assistors in the breaches of fiduciary duty by Gino Cassaniti.

12. [223]

    An order is also sought that the defendants pay damages and/or compensation (including pursuant to s 1317H of the Corporations Act) reflecting the extent to which they caused the Insolvent Companies to suffer loss by reason of the uncommercial transactions and reflecting the extent to which they caused the Insolvent Companies’ liability to the ATO.

Procedural matters

1. [224]

   I have noted above that the five sets of Proceedings were heard together, with evidence in one being evidence in each other.

2. [225]

   Pausing here, it should be noted that before any of the defendants had read their affidavits, I raised the question whether they wished to go into evidence at that stage (see T 83) or to defer that decision to the close of the plaintiffs’ case. Other than Andre Abou-Antoun, who chose not to read his affidavit at that stage (see T 105) (or indeed at all), in general the defendants read their affidavits at the outset.

3. [226]

   An issue subsequently arose as to whether some of those defendants would make themselves available for cross-examination, which led to debate as to whether they were required to do so (applications then being foreshadowed for leave to withdraw the affidavits) or as to the basis on which those affidavits (which had already formally been read) might remain in evidence. Ultimately, a regime was agreed whereby certain of the defendants’ affidavits were read (largely as assertions only) but the deponents would not make themselves available (nor be required) for cross-examination (those being Gino Cassaniti, Fred Khalil and Peter Abboud).

4. [227]

   Of the various defendants, only Andre Abou-Antoun (who in due course gave evidence on subpoena issued by the plaintiffs as part of an agreed regime for him to do so) (and, as I understand it, Michael Abou-Antoun, who gave no evidence in his defence) consistently maintained a claim for privilege against self-incrimination throughout the Proceedings.

5. [228]

   During the course of the hearing there were a number of objections raised as to the admission of evidence, the amendment of the pleadings and the like. Many of those matters were ultimately resolved without the need for any rulings, including, for example, the objection raised by the AKA Parties to the giving of evidence in the witness box by Aris Zafiriou (by then a former taxation officer), due to the offence provisions in Div 355 (see, for example at T 254 onwards); as well as the objections (ultimately unsustained) raised by some of the defendants, particularly the AKA Parties, to the admission of unredacted transcript of various compulsory ATO examinations which were initially only provisionally admitted as business records of the ATO (see T 61-63). Other such objections I dealt with at the time (such as the admission of the Reasons for Decision by the ATO that were tendered simply to establish the fact of the assessment process that had been undertaken not as to the conclusions drawn therein).

6. [229]

   Those matters that were deferred will be dealt with in due course (in particular, the cross-examination of George Said – which evidence was taken on the voir dire subject to later ruling pursuant to s 38 of the Evidence Act).

Evidentiary Onus

1. [230]

   As to the evidentiary burden in the respective Proceedings, the plaintiffs accept that they bear the onus of proof. However, the plaintiffs submit that the separate acts and utterances of the individual natural person conspirators (Gino Cassaniti, Fred Khalil, Peter Abboud and George Khalil) “point to a common design and when considered in combination justify the conclusion that there must have been a combination such as that alleged” (adopting the language used in Ahern v R at [6]); and say that the evidence as a whole provides strong inferences of the existence of the overarching conspiracy as pleaded, and also that the conspirators implemented the conspiracy by using the five Insolvent Companies. This, the plaintiffs say, raised a persuasive evidentiary issue onus against the said defendants. It is submitted by the plaintiffs that, if the conduct of the conspirators was genuine and lawful, they could have established that by giving and adducing evidence in these Proceedings; and, thus, their failure to do so is particularly telling.

2. [231]

   The plaintiffs emphasise that none of the (individual natural person) Primary Conspirators was prepared to be cross-examined. Instead, the arrangement reached (as adverted to above) was that the affidavit evidence of the alleged individual conspirators was admitted subject to an agreed s 136 limitation, whereby the plaintiffs identified the affidavit evidence of the Primary Conspirators (and most of the defendants) on which the plaintiffs wished to rely, and the remaining evidence in the defendants’ affidavits was read only as assertions.

3. [232]

   The plaintiffs say that, in their respective affidavits, the defendants had the opportunity to explain the true basis of the transactions, and to refute the inferences of fact for which the plaintiffs contended; but that none (other than Tanya Borg and Ivana Cassaniti) attempted to explain any transaction. Rather, it is said that each made general statements about peripheral matters. Similarly, it is said that, in their respective pleadings, the defendants had every opportunity to state, and verify on oath, the facts and circumstances of the true nature of the transactions; and that they did not attempt to do so; instead, they verified defences which were almost entirely bare denials or non-admissions, and did not raise positive factual defences.

4. [233]

   Finally, it is said that it was in the Primary Conspirators’ exclusive power to rebut the inference of the existence of an overarching conspiracy; and, instead, they have chosen in effect to remain silent. The plaintiffs say that it is telling that the Primary Conspirators did not give evidence about their conduct nor did they attempt to deny the existence of the conspiracy or the Scheme; instead, seeking to “point the finger” at each other. It is noted that the true nature of the respective transactions was peculiarly within the defendants’ knowledge, and was not within the knowledge of the plaintiffs. It is said that the conspirators could have explained the true basis of the transactions that are being considered in these Proceedings and that their failure to do so allows increased strength or weight to be given to the primary facts favourable to the plaintiffs, and allows inferences favourable to the plaintiffs to be confidently drawn.

5. [234]

   In these circumstances, the so-called rule in Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8 (Jones v Dunkel) is invoked by the plaintiffs against the conspirators by their failure to call witnesses who could have explained or contradicted the inferences sought by, and available to, the plaintiffs (reliance in particular being placed on what was said by Gleeson J, sitting in the Federal Court as her Honour then was, in BCI Finances Pty Ltd (in liq) v Binetter (No 4) (2016) 348 ALR 227; [2016] FCA 1351 (BCI Finances v Binetter) (which was upheld, they note, except for one issue as to costs in BCI Finances Pty Ltd (in liq) v Binetter [2018] FCAFC 189), and to which I will return in due course).

6. [235]

   The plaintiffs say that the existence of the conspiracy has application in many aspects of these Proceedings but, in particular, that it provides a common basis for, and demonstration of, the utilisation of the Insolvent Companies by the conspirators; it serves to explain the nature of, and reasons for, individual transactions; and its implementation was the dishonest conduct whereby the respective directors of the Insolvent Companies breached their fiduciary duties to those companies, as pleaded.

7. [236]

   The defendants broadly take issue with the plaintiffs’ invocation of Jones v Dunkel inferences and I will address this in more detail in the context of consideration of the witnesses’ evidence in due course.

Chronology of events

1. [237]

   There is a degree of overlap between the events the subject of the respective Proceedings. Indeed, it is the striking coincidence of the various events across different entities that forms a large plank in the plaintiffs’ case as to what they contend to be the overarching conspiracy (i.e., the Scheme).

2. [238]

   The plaintiffs issued tendency and coincidence notices in the Proceedings, all of which were dated 23 August 2018. The tendency and coincidence notices filed in each Proceeding gave notice, broadly, of the plaintiffs’ intention to adduce for a tendency purpose and a coincidence purpose (among other purposes) evidence of each of the Primary Conspirators’ and other defendants’ conduct (as detailed in specific paragraphs of the respective further amended statements of claim) in causing or permitting the use of each of the Insolvent Companies for the Scheme. As to the tendency notices, the plaintiffs’ stated that they intended to rely on the detailed conduct: (i) to prove tendency on the part of each of the Primary Conspirators to cause or permit the respective Insolvent Company to be used for the purposes of the Scheme; (ii) to prove tendency on the part of each defendant to cause or permit the respective Insolvent Company to be used for the purposes of the Scheme; and (iii) to prove tendency on the part of each director to cause or permit the companies of which each director is/was a director, or over which each director otherwise exercises/exercised control, to be used for the purposes of the Scheme; or each non-corporate participant to be involved in the Scheme. As to the coincidence notices, the plaintiffs also stated that they intended to rely on the detailed evidence: (i) to establish the improbability of each of the Insolvent Companies having directors or being under the control of persons in common with other Insolvent Companies or related entities having occurred coincidentally; (ii) to establish the improbability of the detailed conduct to have occurred in the absence of the Scheme; and (iii) to establish the improbability of the detailed conduct to have occurred coincidentally.

3. [239]

   I have attempted in the following section to piece together, chronologically, the relevant events across the five sets of Proceedings (rather than separately for each Proceeding) in order to present a more complete picture of what was happening (particularly within Banq) at the relevant times. However, I do not suggest that this is an exhaustive summary of the events referred to in the evidence as a whole; and I bear in mind that, when it comes to assessing the knowledge of various of the Scheme Participants, not each will necessarily have had knowledge of events involving other Scheme Participants.

4. [240]

   As some of the plaintiffs’ arguments refer to events occurring after Gino Cassaniti’s (and/or Banq’s) involvement with the respective clients, in relation to companies that had been established at an earlier time, it is necessary to start the chronology earlier than the time at which the various Scheme Participants were introduced to or became clients of Banq or its predecessor firm; and I accept that the starting point for this chronology has been somewhat arbitrarily chosen.

5. [241]

   As adverted to above, Criniti’s Pty Ltd (subsequently, in August 2009, re-named Zagoonda) was incorporated on 18 February 2003, with Frank Criniti and his father, Cosimo Criniti, as its directors.

6. [242]

   From 2003 to 2009, Frank Criniti operated a restaurant business in Parramatta (Criniti’s Wood Fire Pizza) through Criniti’s Pty Ltd. Prior to this, Frank Criniti had worked for his father as a concretor. Frank Criniti’s evidence was that his father allowed him to borrow equity against his father’s home in Auburn; that the loan, he thought, was $350,000; and that he used the funds “to purchase the business, fix it up a little bit and create the brand Criniti’s” (T 496.44-497.24).

7. [243]

   Jian Holdings, a company which appears to have sold trucks and trailers, was incorporated on 29 August 2006; with its sole director and secretary on incorporation being Jillian Faith Abboud (née Edwards) (George Abboud’s now ex-wife) (Ex K at 51471). Its previous shareholders included Jillian Faith Abboud, Aloeseiafi Faanoi and a company called Douabb Pty Ltd. Its principal place of business was an address in Glendenning and later in Peakhurst. It was said (see T 135) that Jian Holdings was an “asset company”, the purpose of which was to “hold” the trucks (i.e., the trucks used by a related entity – Sydney Sand and Soil Pty Ltd (Sydney Sand and Soil) – as per Andrew Barsa’s evidence).

8. [244]

   Givana was incorporated on 9 October 2007. On and from incorporation, its sole director, secretary and shareholder was (and remains) Ivana Cassaniti. Its registered office was the Banq Address. Its principal place of business is an address in Lugarno NSW. It is the majority shareholder of Banq.

9. [245]

   LAM Haulage (an alleged Scheme Participant) (LAM seemingly an acronym by reference to the initials of each of the brothers, Laurance, Andre and Michael Abou-Antoun) was incorporated on 14 January 2008.

10. [246]

    Banq Accountants was incorporated on 1 May 2008 (see the company details above at [116]). Gino Cassaniti was an accountant and registered tax agent operating through Banq Accountants.

11. [247]

    On 2 July 2008, Excavation was incorporated with the name “Borg Civil Pty Ltd” (I note for clarity that Borg Civil Pty Ltd, later renamed Excavation, is a different company to Borg Civil Australia Pty Ltd, which has been defined as “Borg Civil” in these reasons and which is an active defendant in the RCG CBD Proceeding). It conducted the business of transport and excavation until 2012.

12. [248]

    Relevantly, in relation to later events concerning items of equipment used in the business of Excavation, there is in evidence a Loan Agreement dated 3 July 2008 (Ex 21) recording that Michael Borg intended to advance $2 million to Excavation for the purchase of, amongst other things, equipment.

13. [249]

    According to the ASIC records, Frank and Cosimo Criniti apparently ceased their directorship on 15 December 2008, and Mohamad Irshad Rosunally was appointed as director of Criniti’s Pty Ltd. The registered office of the company was also changed to the Banq Address (while the Form 484 is dated 15 December 2008, I note that it was not lodged until 27 October 2009 (Ex S)). Zagoonda was ultimately wound up in a creditors’ voluntary liquidation on 5 January 2010 (Ex K at 72193).

14. [250]

    From 29 December 2008, Jian Holdings’ registered office was the Banq Address. An ATO system search reveals that the registered tax agent for Jian Holdings was Banq for the period from 18 June 2010 to 7 November 2012 (Ex K at 51476).

15. [251]

    Frank Criniti’s evidence (albeit not clearly distinguishing between Banq Accountants and Banq) is to the effect in 2009 he was introduced to Gino Cassaniti by Pierre Moio (who later became an investor in one of the Criniti restaurant businesses) at a café near the York Street office of Banq Accountants and Banq (T 460-462; 466.10-15).

16. [252]

    Frank Criniti’s evidence is that, from 2009, Banq Accountants and then Banq did all his accounting work (T 463.25) and that the people he dealt with at Banq Accountants after 2009 were Gino Cassaniti, Fred Khalil and Peter Abboud (at T 460-461).

17. [253]

    From 2009 (consistently, it would appear, with the advice that Frank Criniti says was given to him by Gino Cassaniti – see below) various separate (eponymously named) Criniti companies were incorporated.

18. [254]

    Criniti’s Parramatta Asset Holding Pty Ltd (which was incorporated on 3 March 2009, with its registered office being the Former Banq Address from 3 March 2009-5 July 2011 and the Banq Address from 6 July 2011 to 13 February 2014) (Ex K at 72037); Criniti’s Wood Fire Pizza (which was incorporated on 16 March 2009, with its registered office being the Former Banq Address, and from 6 July 2011, the Banq Address) (Ex K at 71152); Criniti’s Darling Harbour (formerly known as Outergains Pty Ltd) (which was incorporated on 10 February 2009, with its registered office on incorporation being the Former Banq Address. Its name was changed Criniti’s Darling Harbour on 28 March 2011 and its registered office was changed on 6 July 2011 to the Banq Address) (Ex K at 72031); Criniti’s Woolloomooloo Asset Holding (which was incorporated on 12 February 2010, with its registered office upon incorporation being the Banq Address) (Ex K at 72100); Criniti’s Woolloomooloo (which was incorporated on 27 June 2011 with its registered office upon incorporation being the Banq Address) (Ex K at 72106); Criniti’s Castle Hill (which was incorporated on 20 July 2010 with its registered office upon incorporation being the Former Banq Address, and from 6 July 2011, the Banq Address) (Ex K at 72075); and Criniti’s Castle Hill Asset Holding Pty Ltd (which was incorporated on 21 July 2010 with its registered office upon incorporation being the Former Banq Address (Ex K at 72080).

19. [255]

    In due course, see below, Rackforce was incorporated on 4 February 2011 (Ex K at 72096), with its registered office upon incorporation being the Former Banq Address and as of 6 July 2011 the Banq Address; and Diamondwish was incorporated on 15 July 2011, with its registered office upon incorporation being the Banq Address (Ex K at 72327).

20. [256]

    Frank Criniti’s evidence is that the Criniti entities (after Criniti’s Pty Ltd) were set up by Banq (see T 499.50, T 501.37, T 503.35-40, T 505.23), which is consistent with each of the companies having the Former Banq Address or Banq Address as its registered office. The proliferation of Criniti entities after Frank Criniti was introduced to Gino Cassaniti and the Banq accounting entities is also consistent with Frank Criniti having been given advice to the effect to which he has deposed (see below) as to the need to restructure his corporate business operations. Relevantly, it appears that whenever a new restaurant was opened, one or more new companies were established. Also relevant to note in this context (as adverted to already) is that, in cross-examination, Frank Criniti’s evidence was that he did not know what Diamondwish’s business was (T 508.10), notwithstanding that it was a company of which he was the director. Nor did he seem to know much about a raft of companies with which, according to ASIC records, he was apparently associated (see his cross-examination by Counsel for Gino Cassaniti at T 556).

21. [257]

    Demolition (formerly known as Mikhael Antoun Pty Ltd) was registered on 23 June 2009, with Michael Abou-Antoun as its director until his brother, Andre, replaced him on 1 July 2010. Its registered office was the Banq Address from 6 June 2011 (Ex K at 11210). Banq was its tax agent.

22. [258]

    Aris Zafiriou’s evidence (in his affidavit sworn 9 March 2017 at [53]-[58]) is to the effect that Demolition was used as a labour hire company by the AKA Civil and AKA NSW.

23. [259]

    Banq was incorporated on 13 July 2009, with Fred Khalil as its sole director and secretary (see [120] for company details). As above, the shareholders of Banq were Givana (60 ordinary shares), Fred Khalil (30 ordinary shares) and Peter Abboud (10 ordinary shares). It appears that Banq, in effect, took over the business of Banq Accountants. Gino Cassaniti says in his affidavit sworn 11 April 2019 at [10] that, from the time of Banq’s incorporation he ceased doing accounting work and acted as a consultant to Banq. I refer in due course to the evidence of various deponents as to Gino Cassaniti’s role at Banq.

24. [260]

    Auswide was incorporated on 16 December 2009, with Frank Criniti as the sole director and company secretary (see Ex K at 77080). Its registered office was the Former Banq Address from 16 December 2009 to 5 July 2011, and the Banq Address from that date onwards (Ex K at 72081).

25. [261]

    Andre Abou-Antoun gave evidence to the effect that he first met Gino Cassaniti in relation to an issue that he and his brother (Michael Abou-Antoun) were having with “Yellow Pages” (see T 758.5-7). Andre Abou-Antoun was introduced to Banq through Peter Abboud’s brother in early 2010 when Peter Abboud and Gino Cassaniti visited the AKA Parties’ offices. Andre Abou-Antoun’s evidence is that in about June 2010, Peter Abboud or Fred Khalil advised the AKA Parties to set up a new company to deal with clients (T 626.37-45) (see below). Andre Abou-Antoun also says that from June 2010, Banq took care of all of the accounting for all of the AKA family companies.

26. [262]

    Banq arranged the incorporation of AKA Civil in June 2010, with its registered office being the Banq Address from 6 July 2011 (Ex K at 10975).

27. [263]

    Reliance Cleaning was incorporated on 23 July 2010, with Peter Abboud and Scott Crabbe as its directors. Its registered office was the Banq Address (Ex K at 33967). Banq was the registered tax agent for Reliance Cleaning (Ex K at 31701). The signatories to its bank accounts were Peter Abboud, Ivana Cassaniti and Fred Khalil (Scott Crabbe, though a director, was not a signatory to the bank account). The plaintiffs say that it is to be inferred that Peter Abboud was the controlling director of Reliance Cleaning (see below).

28. [264]

    As to the business of Reliance Cleaning, there have been conflicting explanations. Fred Khalil’s evidence to the ATO (to which I refer in due course – see Ex 18) was that Reliance Cleaning “only did tendering … and invoicing” and that all the “physical work” (by which I understand him to mean cleaning work) was done in “RC Group” (and Fred Khalil asserted in his affidavit sworn 25 March 2019 at [15] that RCG CBD was a labour hire company which was engaged to provide accounting staff to Banq). Peter Abboud, to the contrary, advised the Office of State Revenue in June 2014 (in response to an enquiry in relation to a different entity – see below) that RCG CBD was not a labour hire company and in his affidavit in these Proceedings he deposed that RCG CBD operated a commercial cleaning business and sub-contracted work from Reliance Cleaning.

29. [265]

    Email communications to which I refer in due course suggest that various of the Reliance Cleaning or RC Group entities were referred to and used interchangeably by Banq personnel. Relevantly, the plaintiffs note that labour hire expenses were not reflected in Banq’s financial records.

30. [266]

    Wenman Brimak was incorporated on 13 August 2010. The Former Banq Address, and then subsequently the Banq Address, was the registered office of Wenman Brimak, from its incorporation until to 2 April 2014 (Ex K at 31662). Banq was the tax agent for Wenman Brimak (Ex K at 31683).

31. [267]

    GFP Holdings was incorporated on 12 October 2010, with Fred Khalil as its director. Ivana Cassaniti was recorded as its sole director from 8 August 2013. As above, it acquired the premises occupied by Banq in Punchbowl (the Banq Address). The funds invested in the acquisition and establishment of the new Banq offices in 2011 by GFP Holdings came from Ivana Cassaniti/Givana (as to 60%) and also F&K Khalil (a company associated with Fred Khalil) and Peter Abboud (as to 40%) (Ivana Cassaniti’s affidavit sworn 28 June 2019 at [9]). This split presumably reflects the differential shareholding as between Givana, F&K Khalil, and Peter Abboud in Banq.

32. [268]

    MAL Land Group was incorporated on 20 October 2010, with Michael Abou-Antoun as the sole director, company secretary and shareholder and its registered office from 19 April 2012 being the Banq Address (Ex K at 50606).

33. [269]

    Givana Prestige was incorporated on 29 November 2010 with Ivana Cassaniti as its sole director, secretary and company shareholder. Its registered office upon incorporation was the Former Banq Address and from 6 July 2011, the Banq Address (Ex K at 72946).

34. [270]

    Rackforce (then known as Fina Fries Pty Ltd) was incorporated on 4 February 2011, with Frank Criniti as its sole director, secretary and shareholder, until Frank Scuteri replaced him on 22 September 2011. Its registered office on incorporation was the Former Banq Address, and then the Banq Address from 6 July 2011.

35. [271]

    As noted above, Earth Civil was incorporated on 25 May 2011, with Michael Abou-Antoun as its sole director, secretary and shareholder. The Former Banq Address was its registered office from incorporation until 7 July 2011 and then the Banq Address until 7 July 2013 (Ex K at 10878). The plaintiffs say that Earth Civil was a purported “employer” company – see below.

36. [272]

    On 25 May 2011, AKA NSW was also incorporated, again this being arranged through Banq. Its sole director and secretary was Michael Abou-Antoun and its registered office was the Former Banq Address incorporation and the Banq Address from 8 July 2011 (Ex K at 11185). From 2011, AKA NSW invoiced clients and AKA Civil paid subcontractors.

37. [273]

    On 15 July 2011, Diamondwish was incorporated, with Frank Criniti as its sole director, secretary and shareholder until 16 March 2012 when Christopher Cherry was appointed to replace him. The ASIC Form effecting this change was signed 16 March 2012 and lodged on 19 March 2012 (Ex K at 72942-72945). The registered office of Diamondwish from incorporation was the Banq Address.

38. [274]

    The impugned Diamondwish transactions (see above) commenced from about August 2011.

39. [275]

    On 30 September 2011 there was an email chain passing between Vanessa Scuteri (an employee of Frank Criniti, working in the payroll section of the group), Frank Criniti, Peter Abboud, Fred Khalil and Gino Cassaniti, in which Vanessa Scuteri writes that she spoke with Peter Abboud and he said, “I will have to ask Gino for the stuff because you haven’t told him yet or have not confirmed this” (see Peter Abboud’s affidavit sworn on 22 March 2019, Annexure A; Ex K at 14566). The plaintiffs point to the fact that, when Frank Criniti suggested in this email chain that it “100% can’t continue”, Gino Cassaniti responded stating “Frank just want to talk to you about so you all listen and follow my advice”. The plaintiffs rely on this as demonstrating the extent of Gino Cassaniti’s control over the Criniti companies at this time. (It is certainly inconsistent with any disavowal by Gino Cassaniti of involvement through Banq in the business affairs of his clients – here, the Criniti Companies; and it is also relevant insofar as it illustrates Peter Abboud’s deferral to Gino Cassaniti for instructions.) Gino Cassaniti’s signature in these emails identifies his role as an “[a]ccountant” at Banq.

40. [276]

    The impugned AKA Civil/AKA NSW transactions (see above) commenced from about November 2011. (The plaintiffs say that those transactions were orchestrated by Peter Abboud and Fred Khalil who told Andre Abou-Antoun that they would utilise Bluemine for the AKA transactions – see below).

41. [277]

    Banq Accountants was wound up on 20 December 2011 (but, as above, its business appears effectively to have been assumed by Banq following its incorporation in July 2009).

42. [278]

    Between 16 December 2011 and 22 December 2011 Rackforce received cash deposits and payments from Crinz totalling $316,626 (see Table 9.1). On 23 December 2011, Rackforce paid $316,185 to Diamondwish. Diamondwish paid to Givana Prestige the sum of $316,185 (Table 7.1). On 16 December 2011, Rackforce paid Givana Prestige the sum of $653,933 and on 30 December 2011, a further sum of $499,950 being a total of $1,153,833 (Table 9.1). On 9 January 2012, Givana Prestige paid Diamondwish $330,056.71. On 10 January 2012, Diamondwish paid $330,000 to Auswide. At this time (December 2011 to January 2012), Ivana Cassaniti was the sole director, company secretary and shareholder of Givana Prestige.

43. [279]

    The ASIC company extract for Givana Prestige records that David Rizk was appointed a director of Givana Prestige on 18 January 2012 and ceased as a director on 10 May 2012 (Ex K at 72946). The Form 484 for Givana Prestige was lodged on 23 February 2012 (Ex K at 70209). The plaintiffs say that it was backdated purportedly to show that Ivana Cassaniti’s directorship ceased on 18 January 2012.

44. [280]

    Frank Criniti gave evidence (at T 522.36-523.30) to the effect that David Rizk was his personal assistant; that he and Gino Cassaniti asked David Rizk to become a director of Givana Prestige (which is what occurred); that David Rizk then expressed to Frank Criniti that his (i.e., David Rizk’s) father was not happy about him being a director of Givana Prestige and he asked to be removed, and that Frank Criniti advised Gino Cassaniti, who said he would sort it out. Frank Criniti gave evidence that David Rizk had no involvement in the management of Givana Prestige (T 523.31-37). Frank Criniti’s evidence was corroborated by David Rizk in his evidence in chief (T 904.41-905.31). The plaintiffs again rely on this as evidence of Gino Cassaniti’s involvement. (Gino Cassaniti points to inconsistency in the evidence as to how David Rizk came to be appointed – see below.)

45. [281]

    Ignite Promotions was incorporated on 25 January 2012. The Banq Address was, for the period 25 January 2012 to 2 April 2014, the registered office for Ignite Promotions (Ex K at 32163). Banq was the tax agent for Ignite Promotions (Ex K at 32171).

46. [282]

    The Great Brothers was incorporated on 16 January 2012 with the Banq Address as its registered office (Ex K at 50396). Michael, Andre and Laurance Abou-Antoun are recorded as company director and secretary from 16 January 2012. From 19 April 2013, Laurance Abou-Antoun remained as sole director and secretary.

47. [283]

    On 7 February 2012, Ivana Cassaniti signed a declaration, purportedly as the director of Givana Prestige, for the renewal of Givana Prestige’s motor dealer’s licence. I note that this occurred after the date on which the Form 484 later lodged (23 February 2012) with ASIC records Ivana Cassaniti as having ceased as a director of the company (i.e. on 18 January 2012). (The plaintiffs say that Ivana Cassaniti renewed the licence as the director of Givana Prestige in full knowledge and understanding of her actions in that capacity; and that her evidence that the signatures on those forms may not have been hers was false – see at T 1166-1168 (see below).)

48. [284]

    On 9 February 2012 the licence renewal was lodged (Ex K at 74716). The document declares Ivana Cassaniti the director of Givana Prestige (Ex K at 74717). A lay comparison of the signatures on the 2010 application and the 2012 licence renewal suggest they are very similar (see at 74720 and 74713). The declaration contained the following certification:

49. [285]

    There is evidence to the effect that Givana Prestige commenced purchasing vehicles from Auswide on 6 January 2012 (see Aris Zafiriou’s affidavit sworn 21 March 2017 at [52(b)]).

50. [286]

    On 15 March 2012, Christopher Cherry replaced Frank Scuteri as director of Rackforce.

51. [287]

    From 9 April 2012, LAM Haulage’s registered office was the Banq Address

52. [288]

    Aloeseiafi Faanoi replaced Frank Criniti as sole director and company secretary of Auswide on 21 May 2012 (who it will be remembered had been appointed director of Zagoonda shortly prior to its liquidation).

53. [289]

    On 10 May 2012, Frank Criniti became the sole director and secretary of Givana Prestige. (Pausing here, this is some months after Givana Prestige had commenced purchasing vehicles from Auswide.) Frank Criniti’s evidence was that Gino Cassaniti told him that he had this company and that the purpose of it being put into his (Frank Criniti’s) hands was that “[Auswide] had too much debts. The cars have to be moved out properly and transferred into Givana Prestige” in order to “continue buying and selling vehicles for tax saving purposes” and operating a motor vehicle business (at T 521.25-35; 522.25-34). Gino Cassaniti’s Counsel cross-examined Frank Criniti in effect on the basis that Givana Prestige was indeed Gino Cassaniti’s (inactive) company. Frank Criniti’s evidence (see below) is that Gino Cassaniti directed that Auswide be shut down.

54. [290]

    There was cross-examination by Gino Cassaniti’s Counsel to suggest that Auswide was shut down because Frank Criniti was incurring too much expenditure on luxury car purchases – Frank Criniti’s retort in effect was that Gino Cassaniti and his family members or associates had also been acquiring vehicles through Auswide (see below). Nothing here turns on the precise nature of the vehicle transactions, save to note that on either version of events it would appear that Gino Cassaniti was involved in the circumstances in which Frank Criniti took control of Givana Prestige (which appears inconsistent with Gino Cassaniti having little involvement in the affairs of Banq or associated companies at the time).

55. [291]

    RCG CBD was incorporated on 16 May 2012, with its directors and shareholders on incorporation being recorded as Gino Cassaniti and George Khalil (though George Khalil purportedly ceased as a director that same day).

56. [292]

    On the same day that RCG CBD was incorporated, Involved Recruitment was also incorporated, with George Said, George Khalil and Gino Cassaniti as its directors (although George Said and George Khalil purportedly ceased as directors on that same day).

57. [293]

    By 2012, Michael Borg had been carrying on an excavation and demolition business for a few years through Mikhael Antoun Pty Ltd (later named Demolition) and Excavation (formerly named Borg Civil Pty Ltd). He was 23 years old. His wife, Tanya Borg was 20 years old (and her Counsel emphasise that she was then working three jobs (at doctors’ surgeries and at a sports store), taking care of their children, and studying commerce and business).

58. [294]

    By 2012, various items of equipment had been purchased for use in the business of Excavation. The equipment was recorded in the books of Excavation as assets of Excavation but the Borg Parties say (and Tanya Borg’s understanding was) that the items of equipment were in fact owned or had been paid for by Michael Borg personally. (It is submitted by the Borg Parties that this accords with common experience, especially in circumstances where a business is commenced before a company’s incorporation.) I have referred above to the Loan Agreement dated 3 July 2008 which records that Michael Borg intended to advance $2 million to Excavation (Ex 21).

59. [295]

    In 2012, Tanya Borg and Michael Borg were referred to Banq (by a Charlie Musket). They attended a meeting in early to mid 2012, at which Tanya Borg met Fred Khalil for the first time. (The Borg Parties say that, contrary to the plaintiffs’ submissions at [460], there has never been any evidence from Tanya Borg in relation to Peter Abboud or his involvement in any transactions pertaining to the Borg Parties.)

60. [296]

    Tanya Borg’s evidence is that Fred Khalil advised the Borgs that a new company would be set up called Borg Civil Australia Pty Ltd to operate the business going forward; that all assets would be transferred to a new company as trustee, called Borg Family; that the employees would be put in a company called Borg (NSW); that Tanya Borg would be the director of Borg Family; and that Fred Khalil would take care of it all.

61. [297]

    The Borg Parties emphasise that, on Tanya Borg’s evidence, there was no advice given by Fred Khalil (or by anyone else) to Tanya Borg or Michael Borg as to any tax benefits from the restructure that was proposed (cf plaintiffs’ submissions at [602] and [603]). It is said that this is a further distinction between the position of the Borg Parties and that of other defendants (such as Frank Criniti and the AKA Parties) in respect of whom the plaintiffs allege that tax advice was given.

62. [298]

    Borg Family was incorporated on 21 May 2012. The Banq Address was its registered office from incorporation until 6 April 2017 (see ASIC extract, Ex K at 33973). The Borg Parties say that it is and has been since its incorporation the holding company of the assets (such as trucks), which are used by Borg Civil in its business. Tanya Borg was its director from 21 May 2012 until 21 April 2017, when Michael Borg became its director.

63. [299]

    Borg Family is the corporate trustee of the Borg Family Trust. The trust deed for the Borg Family Trust was signed on 21 May 2012 by: Tanya Borg as the director and secretary of Borg Family; Michael Borg as the appointor; and Gino Cassaniti (witnessed by Fred Khalil) as settlor of the trust (Tanya Borg’s affidavit sworn 4 December 2018; Ex K at 36575-36598). (The Borg Parties say that, absent any evidence connecting the Borg Parties to Gino Cassaniti in 2012 and having regard to Tanya Borg’s evidence that she did not meet Gino Cassaniti until 2014, this document is of no assistance to the plaintiffs in proving that Gino Cassaniti advised the Borg Parties at the relevant time (cf the plaintiffs’ submissions at [468]).)

64. [300]

    Borg Civil was incorporated on the same day and from then carried on business in the area of excavation and haulage (Ex K at 33976). On incorporation (and at all times since then) its director and secretary was Michael Borg. In 2015, Borg Civil Finance Pty Ltd replaced Michael Borg as the company’s sole shareholder. From incorporation until 27 February 2017 (when its registered office became that of its new accountants), Borg Civil’s registered address was the Banq Address.

65. [301]

    Banq was the registered tax agent for both Borg Family and Borg Civil (Ex K at 34153-34154).

66. [302]

    Tanya Borg’s deposed in her affidavit sworn 4 December 2018 at [32] that, shortly after Borg Family’s incorporation, Fred Khalil advised her that “your accountant has recorded the equipment as being owned by the Company (Excavation) not Michael. I will work out the best way to transfer the property to the new company”.

67. [303]

    In fact, the Borg Parties say that the evidence shows that the correct position was different to Fred Khalil’s initial understanding. It is said that it is probable that Fred Khalil initially did not know of Michael Borg’s loans to Excavation for the purchase of the equipment (referring to the Loan Agreement dated 3 July 2008). It is said that Fred Khalil’s later appreciation that any transaction to effect a transfer of assets from Excavation to Borg Family would need to involve the accounting of those moneys to Michael Borg evidently complicated any such transaction; and it is submitted that this appreciation no doubt motivated Fred Khalil in due course to advise the Borg Parties to change course in effecting the transfer of assets (see below).

68. [304]

    Bluemine was incorporated on 7 June 2012, with its sole director and secretary being Andrew Barsa (the cousin of Peter Abboud and Michael Abboud), who ceased those positions when Gino Cassaniti was appointed on 1 April 2013 (see Form 484 dated 1 April 2013 and lodged with ASIC on 20 July 2013, Ex K at 51467). As noted above, the plaintiffs contend that Gino Cassaniti was a deemed or shadow director of Bluemine from 2012.

69. [305]

    Bluemine was incorporated (according to Andrew Barsa) on the advice of Peter Abboud for the purported purpose of purchasing trucks from a company (Jian Holdings) associated with George Abboud. (The plaintiffs’ allegations in relation to the proposed vehicle purchases are dealt with in [221(d)] of the Bluemine third further amended statement of claim.) The evidence of Andrew Barsa was that the vehicles were used in the business of an associated entity, Sydney Sand and Soil Pty Ltd (Sydney Sand and Soil).

70. [306]

    It is said by the relevant defendants that the purchase (of three trucks and trailers from Jian Holdings) occurred by way of a transfer of $590,000 from Banq to Bluemine and then from Bluemine to Banq on 25 June 2012. Tax invoices were issued by Jian Holdings to Bluemine in respect of the purported sale of these vehicles. Bluemine claimed a GST credit in respect of the transaction by way of a BAS return prepared by Peter Abboud. (The plaintiffs emphasise that no commercial explanation for the payments being effected in this way was given.)

71. [307]

    The plaintiffs maintain that Peter Abboud used Bluemine to lodge a BAS with the ATO and obtain a GST refund for the purported sale and purchase of the vehicles from Jian Holdings. The plaintiffs say that the obvious inference is that the purported invoices issued by Jian Holdings were false (complaint is made – see below – as to the lack of reference to false invoices in any pleading).

72. [308]

    The position taken by Michael Abboud and Jillian Edwards (when they were still defendants in the Proceedings and had filed brief outlines of written submissions) was that the transfer of the vehicles from Jian Holdings to Bluemine was done at the direction of George Abboud; that the funds which were required to enable the vehicles to be purchased in the first place had been lent to Tepall Pty Ltd (Tepall) by George Abboud, which loan or loans(s) remained unpaid. The submission there made was that there must have been some consideration payable to acquire the vehicles and that that consideration was simply to meet the unpaid loan owing to George Abboud; and that when two of the vehicles were ultimately sold, the sale proceeds “flowed back” to Abboud family members; and the third truck was transferred to Jola Holdings (which it is said was liable to repay the loan to George Abboud). (It was said that this was part of the divorce settlement between Jillian Edwards and George Abboud.) I note those submissions simply for completeness, as those former parties did not play any active role in the proceedings.

73. [309]

    By a form dated 1 January 2013 but lodged with ASIC on 28 May 2013, Gino Cassaniti was recorded as sole director, secretary and shareholder of Earth Civil from 1 July 2012. (It is noted that Gino Cassaniti denies that he was the sole director and shareholder of Earth Civil from 1 July 2012).

74. [310]

    On 16 July 2012, Banq became the tax agent for Excavation, until its winding up on 6 March 2013 (Ex K at 33733).

75. [311]

    On 31 July 2012, Aloeseiafi Faanoi became Excavation’s director.

76. [312]

    On 17 August 2012, Hymans Asset Management (Hymans), a third-party valuer, issued a valuation report of Excavation (the Hymans Report) (Ex 20, Tab 9). The Hymans Report predates the issuing of the various Recipient Created Tax Invoices (RCTIs), the transfers to RCG CBD and the payments to Excavation which are here impugned (see below).

77. [313]

    Relevantly, Tanya Borg’s evidence is that the Borg Parties were advised by Fred Khalil to obtain a valuation of Excavation’s equipment, namely that Fred Khalil told Tanya Borg that “before it is transferred, you need a valuation. I will organise that for you but it will cost around 10 thousand” (Tanya Borg’s affidavit sworn 4 December 2018 at [33]). The Hymans Report states that it was “prepared and on behalf of Fred Khalil” (which corroborates Tanya Borg’s evidence above).

78. [314]

    The Hymans Report valued Excavation’s assets at $1,440,500 (encumbered). Appendix A to that valuation listed and valued (excl of GST) the assets which were transferred from Excavation to Borg Family. The Borg Parties note that the Hymans Report’s authenticity or date of issue was not challenged.

79. [315]

    Tanya Borg deposed (at [34]) that, after the Hymans Report was obtained, Fred Khalil told her “I have the valuation, I can structure those payments, I have a company called RCG, I can use that to make the payments to the old company [i.e., presumably Excavation]”.

80. [316]

    On 16 August 2012, Aloeseiafi Faanoi replaced Jillian Abboud as sole director and secretary of Jian Holdings.

81. [317]

    On 24 September 2012, Fred Khalil caused Borg Civil Pty Ltd’s name to be changed to “Excavation Pty Ltd” (Ex K at 34052). (As to the plaintiffs’ complaint (in their submissions at [1131]) that Tanya Borg was silent as to the reasons for the name change, the Borg Parties submit that those facts are irrelevant to the issues in dispute in this proceeding and Tanya Borg was not cross-examined about it by the plaintiffs.)

82. [318]

    On 26 October 2012, shortly after the transfer of the vehicles from Jian Holdings to Bluemine, Jian Holdings was wound up pursuant to a creditors’ voluntary winding up. Jian Holdings did not remit the equivalent GST purportedly collected from Bluemine to the ATO.

83. [319]

    In the period from July 2012 to May 2013, Reliance Cleaning (of which Peter Abboud was a director), made 64 payments to RCG CBD, totalling $1,618,254.35 (Table 3.11). The plaintiffs say that there was no genuine commercial documentation recording any of those transactions and that Reliance Cleaning was just another of the conspirators’ “invoicing companies”.

84. [320]

    At [198] of the RCG CBD third further amended statement of claim, the plaintiffs claim that in the period from 31 July 2012 to 21 May 2013, Kamikaze made payments to RCG CBD totalling $364,656.20 (as identified in Schedule C). The ASIC company extract for Kamikaze identifies that at the time of the payments from Kamikaze to RCG CBD, Fred Khalil was the sole director and company secretary of Kamikaze. KTDH Pty Ltd (KTDH) is the sole shareholder of Kamikaze (Ex K at 31902). At [33] of his affidavit sworn 25 March 2019, Fred Khalil attests that he earned $568,350 from Kamikaze that was paid from KTDH to Sivasli (Fred Khalil being the sole director, secretary and shareholder of Sivasli). The plaintiffs point to the absence of any explanation in Fred Khalil’s affidavit for either the payments by Kamikaze to RCG CBD or from RCG CBD to Sivasli identified above.

85. [321]

    Between September 2012 and May 2013, Andre Abou-Antoun caused AKA Civil to deposit approximately $965,000 in Earth Civil’s bank account. Over the same period, Andre Abou-Antoun and Michael Abou-Antoun withdrew approximately $965,000 cash from Earth Civil (see Tables 1.1 to 1.3 of the plaintiffs’ submissions). (The plaintiffs say that there is clear evidence of Gino Cassaniti’s direct involvement in the payments in and out of Earth Civil – see below.)

86. [322]

    In the period from 10 September 2012 to 30 May 2013, RCG CBD made payments to Banq totalling $920,415.00 (see Table 3.2).

87. [323]

    On 25 September 2012, a number of RCTIs were issued by Borg Family.

88. [324]

    First, RCTI numbered one was issued, directed to Excavation and describing the relevant item as “Truck Loader-Bobcat-T870-2012” for $92,000 (excl GST). The value ascribed to that item was said to be consistent with the value set out in the Hymans Report. That item was recorded on Borg Family’s General Ledger as a purchase from “BORGCIVIL”; and “BORGCIVIL” was listed as a trade creditor in relation to that item.

89. [325]

    Second, RCTI numbered two was issued. It was directed to Excavation and described the relevant item as “Skid Steer Loader-Takouchi-TL-150 High Flow” for $43,000 (excl GST). The value ascribed to that item was consistent with the value set out in the Hymans Report. That item was recorded on Borg Family’s General Ledger as a purchase from “BORGCIVIL”; and “BORGCIVIL” was listed as a trade creditor in relation to that item.

90. [326]

    Third, RCTI numbered three was issued. The document in evidence does not bear a description, but its GST-exclusive value matches the value of the “Skid Steer Loader-S185 Turbo”, which the Borg Parties note matches item 3 of Appendix A to the Hymans Report with the same description. (It is noted that there was no challenge to Tanya Borg’s evidence (at [17] of her affidavit sworn 27 February 2020). The Borg Parties say that it should be accepted that RCTI numbered three was issued in relation to the purchase of the “Skid Steer Loader-S185 Turbo”. That item was recorded on Borg Family’s General Ledger as a purchase from “BORGCIVIL”; and “BORGCIVIL” was listed as a trade creditor in relation to that item.

91. [327]

    Pausing here, the Borg Parties complain that the plaintiffs have made submissions in relation to the RCTIs, which have not been pleaded and they oppose the expansion of the plaintiff’ case in this regard. In any event, they say that the question in this case is not whether Borg Family was or was not able to issue RCTIs or whether the better course would have been for Excavation to issue invoices; rather, the question is a narrow one (namely, whether the issuing of RCTIs provides any support for the claim that Borg Family’s transfers to and from RCG CBD were part of the implementation of the Scheme Recommendation – and they say that it does not). It is said that the RCTIs were in fact issued on or about the dates they bear and that they generally accorded with a valuation obtained from an independent valuer.

92. [328]

    In September and October 2012 four payments were made (see Table 3.5) amounting to $585,000 by Borg Family and Borg Civil to RCG CBD and then by RCG CBD of $580,000 to Borg Family.

93. [329]

    On 25 September 2012, the same day as the RCTIs were issued, the sum of $185,000 was transferred to RCG CBD. RCG CBD’s bank statement records the description for that payment as “BORG CIVIL PTY LTD” (Excavation’s original name). The amount was recorded as comprised by three amounts matching RCTIs 1-3 in Borg Family’s General Ledger (although the Borg Parties accept that those records appear to be incorrect in light of the payments later made to Excavation). The transfer of $185,000 was recorded in the General Ledger as a loan.

94. [330]

    On the same day, $185,000 was transferred by RCG CBD to Borg Family’s account.

95. [331]

    It was put to Tanya Borg in cross-examination that the return of these funds was not a “refund”, a proposition with which she agreed. However, the Borg Parties say that the characterisation of those moneys (and the other moneys transferred by RCG CBD to Borg Family) as a “refund” by the witness is immaterial in circumstances where she had given evidence that the moneys would be returned to Borg Family. The Borg Parties submit that the fact that the payments made by Borg Family to RCG CBD were returned is not in question, but that the correct characterisation of the payment is important. It is submitted that the more likely explanation is that the payments were made to RCG CBD to effect a transaction as explained by Tanya Borg, but that the transaction failed.

96. [332]

    The Borg Parties note that the plaintiffs rely heavily on the entries concerning the $185,000 in Borg Family’s General Ledger. The Borg Parties say that those entries are the only records that correlate with the contention that the $185,000 remained the only payment for the items in RCTIs 1-3 (which forms the factual basis for the plaintiffs’ contention that that transaction was made pursuant to the Scheme Recommendation). The Borg Parties accept (as did Tanya Borg in her evidence) that at the time that the payment of $185,000 was made it was in respect of RCTIs 1- 3 (which they say was based on Fred Khalil’s advice). However, I foreshadow that the Borg Parties contend the factual analysis does not end here, and consideration must be had to what they refer to as the “change of course” following the September/October 2012 transfers.

97. [333]

    On 28 September 2012, the sum of $180,000 was transferred to RCG CBD. RCG CBD’s bank statements record that payment as bearing the description “BORG CIVIL PTY LTD”. That payment is not recorded in any of the BAS returns lodged by Borg Family (which is relied upon by the Borg Parties as undermining the contention that BAS returns were lodged by reference to the payments to RCG CBD). It was recorded in the General Ledger as a loan.

98. [334]

    Pausing here, the plaintiffs submit (at [1140]), that Tanya Borg’s uncertainty about a particular note on the General Ledger as to this $180,000 payment (which note the Borg Parties point out Tanya Borg did not make) was “not a genuine answer”. The Borg Parties point out that Tanya Borg gave evidence as to her belief that the payments from Borg Family were for repayment of loans which Excavation owed to Michael Borg, for example at T 1307.5-10:

99. [335]

    The Borg Parties say that there is no explanation as to the reason why the plaintiffs maintain that that answer was not “genuine”; no explanation as to why that proposition was not put to her; no evidence from anyone as to what the correct characterisation of the payment ought to have been, or indeed, why any of that matters. It is said that that assertion against Tanya Borg should be rejected, especially when it was not put to her in cross-examination.

100. [336]

     Demolition was wound up on 26 October 2012. Less than three months prior to its winding up, Aloeseiafi Faanoi replaced Andre Abou-Antoun as the sole director of Demolition on 8 August 2012. I note the ASIC Record states Gino Cassaniti became director on 15 September 2012 until 13 June 2013 but also records the company being externally administered as of 26 October 2012 (Ex K at 11210).

101. [337]

     On 1 October 2012, RCTIs numbered 14, 33 and 35 were issued by Borg Family.

102. [338]

     RCTI numbered 33 was directed to Excavation and described the relevant item as “Earthmover-V1055-5B” for $41,240.96 (excl GST) (Ex 20, Tab 17). The value ascribed to that item was slightly lower than the value set out in the valuation report. That item was recorded on Borg Family’s General Ledger as a purchase from “BORGCIVIL”.

103. [339]

     RCTI numbered 35 was directed to Excavation. It described the relevant item as “Truck-Powerslat 7700” for $67,994.74 (excl GST) (Ex 20, Tab 18). The value ascribed to that item was slightly lower than the value set out in the valuation report. That item was recorded on Borg Family’s General Ledger as a purchase from “BORGCIVIL”.

104. [340]

     RCTI numbered 14 was directed to Excavation. It described the relevant item of equipment as a “Road Roller YZK10A” for $90,933.55 (excl GST). That item is recorded on Borg Family’s General Ledger as a purchase from “Borg Civil Pty Ltd”.

105. [341]

     On 3 October 2012, RCG CBD transferred $75,000 to Borg Family (Ex 20, Tab 19). That amount is recorded as a loan on Borg Family’s bank account, RCG CBD’s account and on Borg Family’s General Ledger.

106. [342]

     On 5 October 2012, $220,000 was transferred to RCG CBD (Ex 20, Tab 19). RCG CBD’s bank statements record that payment on 8 October 2012 as bearing the description “BORG CIVIL PTY LTD” (Ex 20, Tab 20). That transfer is recorded as “RCG” in the General Ledger.

107. [343]

     There is reference to the amount of $220,186.18 for RCTIs numbered 14, 33 and 35. However, the Borg Parties note that that the amount set out on a document dated 8 October 2012 from NAB matches the amounts set out in the General Ledger (Ex 20, Tab 21).

108. [344]

     On 10 October 2012, the sum of $320,000 was transferred by RCG CBD to Borg Family (Ex 20, Tab 22). That amount was described in the General Ledger as a “RTGS” (a reference to a same-day transfer). It was recorded as a loan. That was the final transfer between RCG CBD and Borg Family.

109. [345]

     The Borg Parties say that, contrary to the submission at [212(e)] of the plaintiffs’ submissions, the total of the transfers from Borg Family to RCG CBD in the period 15 September 2012 to 10 October 2012 was $585,000. It is noted that $580,000 was not transferred to Borg Civil, as claimed at [212(e)] of the plaintiffs’ submissions. The Borg Parties also submit the plaintiffs’ submission at [212(e)] is inconsistent with their pleadings at [189] of the RCG CBD third further amended statement of claim and the bank statements in evidence.

110. [346]

     As foreshadowed above, the Borg Parties say that it appears to have been after the payment on 10 October 2012 that a change of course was adopted in relation to the payments for the equipment. In this regard, they point to Tanya Borg’s evidence that, Fred Khalil told her (Tanya Borg’s affidavit sworn 4 December 2018 at [44]):

111. [347]

     It is said by the Borg Parties that the October transfers were recognised as a “dead end” as a means of effecting Fred Khalil’s advice. It is submitted that the reason for that change of course (not explained by Fred Khalil) is likely to be that (when faced with effecting a multi-party transaction involving Borg Family, Excavation and Michael Borg), Fred Khalil considered that the payments should be made directly to Excavation, which is ultimately what happened. In effect, it is said by the Borg Parties that Borg Family was advised to re-do the transactions; and that it did so.

112. [348]

     From 2 November 2012 onwards, and it is said consistently with the above, the Borg Parties say that Borg Family started making payments “anew” for all of the assets that Excavation transferred to it, including the assets set out in RCTIs 1-3 above. It is submitted that this is the finding that best accords with the documents and with the whole of the evidence, including the communications with the ATO (cf plaintiffs’ submissions [1178]-[1184]).

113. [349]

     The Borg Parties again pose a rhetorical question, namely as to why (having regard to the above sequence of events) if the Borg Parties were motivated to partake in a dishonest design as alleged, they changed course at this juncture; and stopped after a few payments to RCG CBD only to proceed to pay moneys directly to Excavation; i.e., it is suggested that there is no reason for them to have limited their dishonesty and not proceeded to pay all of the RCTIs to RCG CBD.

114. [350]

     It is relevant at this point to note the timing of the BAS returns for Borg Family, and its tax return, in the context of the payments made to Excavation. The Borg Parties note that the Borg Family lodged its BAS on the accrual bases and, in accordance with the RCTIs, it issued rather than in accordance with any payments made by it to RCG CBD (cf plaintiffs’ submission at [483]).

115. [351]

     Borg Family’s quarterly BAS return for the period from 1 July 2012 to 30 September 2012 claimed $216,600 in capital purchases, for the $185,000 payment from Borg Family to RCG CBD on 25 September 2012 and an invoice for $31,600 to Capital Hill Motors (cf plaintiffs’ submissions at [665(a)]). The total GST on purchases was $19,782. The claim resulted in a GST refund of $14,665 to Borg Family (Ex K at 34390; Ex W at 13B). The plaintiffs note that the BAS lodged is consistent with the entries in the Borg Family General Ledger.

116. [352]

     This BAS was first lodged on 2 November 2012 contemporaneously with the first of the series of the payments from Borg Family to Excavation. (Pausing here I note that the Table at Schedule 4 to the Borg Parties’ submissions lists and breaks down each of the BAS returns lodged by Borg Family and supports their submission that they were lodged by reference to the RCTIs and not the moneys transferred to RCG CBD.)

117. [353]

     The October 2012 monthly BAS return claimed the sum of $220,186.18 in capital purchases (the total of the RCTIs 14, 33 and 35). The plaintiffs note that this includes the $220,000 payment from Borg Family to RCG CBD on 8 October 2012. The Borg Parties note that the amount claimed matches the amount in the NAB document dated 8 October 2020. The total GST on purchases was $20,017. The claim resulted in a GST refund of $20,017 which was paid to Borg Family (Ex K at 34391; Ex W at 13B). Again, the plaintiffs note that the BAS lodged is consistent with the entries in the Borg Family General Ledger (Ex W at 29-33). That BAS was lodged on 2 November 2012, which is after the date of the NAB letter.

118. [354]

     A quarterly BAS for the period October 2012 to December 2012 was lodged by BF first on 8 February 2013 (after the payment of cheques 8, 9, 10 and 11), which claimed $642,639.50 in capital purchases (including a purchase of a Toyota Hilux, not from Excavation, for $57,439.50). The balance of that BAS was referable to RCTIs 17, 25, 26, 27, 28, 29, 30, 31, 32, 33, 36, 37 and 38 issued to Excavation. The total of capital purchases claimed was the rounded figure of $642,640. The net credits amounted to $57,922.

119. [355]

     A monthly BAS for November 2012 was lodged by Borg Family on 10 December 2012 (after the payment of cheques 8, 9, 10 and 11 and 15), which claimed $624,250 in capital purchases, which included one purchase totalling $44,000 (paid for in three payments) that do not relate to Excavation. The balance of that BAS was referable to RCTIs, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22 and 23 issued to Excavation. The total of capital purchases claimed was the rounded figure of $624,250. The net credits amounted to $56,900.

120. [356]

     The Borg Parties note that, in the period from 2 November 2012 to 11 December 2012, Borg Family drew four cheques in favour of Excavation in the total amount of $810,000. Each of the transactions is recorded as having been made on Borg Family’s bank account statements and on Excavation’s bank account statements (see Ex 22).

121. [357]

     On 1 November 2012, further RCTIs (numbered 4-23) were issued to Excavation. (They are listed in Schedule 1 to the Borg Parties’ submissions.)

122. [358]

     From 15 November 2012 to 7 March 2012, State Wide Design made four payments to RCG CBD, totalling $491,961.71. From 16 November 2012 to 13 March 2013, RCG CBD made five payments to Statewide Printing (that is, the payment of $83,811.27 on 16 November 2012, $94,900 on 19 November 2012, $136,363 on 7 March 2013, $56,800 on 11 March 2013 and $75,349 on 13 March 2013) totalling $447,223.27 (exactly ten-elevenths of the amount paid in) (see Table 3.4).

123. [359]

     The only invoices produced by Statewide Printing (in answer to a notice to produce issued on 20 June 2017) were: an RCG CBD invoice numbered #00001121 in the amount of $92,192.40 (Ex K at 36379) and an RCG CBD invoice numbered #0001202 in the amount of $104,405.31, both for “Management fees” (Ex K at 36380; see also notice to produce, Ex K at 36372).

124. [360]

     Further, on 13 and 15 November 2012, Peter Abboud sent emails to Mario Sande, with the subject RCG CBD Invoices – State Wide Design, requesting part payment of the invoices (Ex K at 36381):

125. [361]

     On 15 November 2012, Mario Sande forwarded the email chain from Peter Abboud to Marie Catalano with attachments “Inv00001202.pdf”, “Inv00001121.pdf” and “Inv00001009.pdf”.

126. [362]

     In respect to those invoices and payments, Mario Sande’s evidence was that: the amount of the payment was determined on each occasion by Banq (T 778.30) from one of Gino Cassaniti, Fred Khalil or Peter Abboud (T 779.5); he would receive an invoice via fax, email or it would be dropped off to him in person from the accounting firm (T 778.33-38); and payments were on occasion prompted by Peter Abboud (T 779.33-780.19).

127. [363]

     At the relevant time, according to the ASIC register, Gino Cassaniti was the director of RCG CBD. However, the plaintiffs submit that George Khalil was a director of RCG CBD and acted as the director from 16 May 2012 (from incorporation) until 28 May 2013 when the Form 484 was lodged notifying ASIC of the change in directorship (Ex K at 31691-31693). George Khalil was the sole signatory and the controller of the RCG CBD bank account (Ex K at 31543-31544).

128. [364]

     The plaintiffs say that the five payments from RCG CBD to Statewide Printing could only have occurred with the knowledge and concurrence of George Khalil as to every element of the transaction, including their purpose. In particular, it is said that George Khalil must have known the reason the payment from State Wide Design was coming in and that it was to be paid on to Statewide Printing minus the 10% fee which occurred in accordance with the Scheme Recommendation and the conspiracy. The plaintiffs say that George Khalil must have known that the transactions with Statewide Printing involved $44,744.44 being kept by RCG CBD to look like 10% GST (which they say he knew would not be paid on to the Commissioner).

129. [365]

     The RCG CBD third further amended statement of claim states at [171] that payments by RCG CBD to Kito Investments occurred from 20 November 2012 to 13 May 2013 totalling $140,000, some of which came into RCG CBD from Reliance Cleaning (Tables 3.11 and 3.14). As far as the liquidator has been able to ascertain, Kito Investments provided no benefit to RCG CBD for those payments. The ASIC company extract for Kito Investments shows that its sole director and company secretary is Fred Khalil’s wife, Katherine Khalil (Ex K at 30253).

130. [366]

     On 27 November 2012, an email was sent from bluemineptyltd@gmail.com email to Andre Abou-Antoun attaching invoices to AKA NSW and AKA Civil (#AKAC/001 for $467,500; #AKAN/001 for $330,000 and #AKAN/002 for $652,825; #AKAN/003 for $767,760.99 and #AKAN/004 for $529,731.39) for “Management./Supervision charges”. The email stated, “Hi Andre can you please pay the bills attached” (Ex K at 56338).

131. [367]

     On 6 December 2012, Komel Kohli (signed off as an accounts manager of AKA Civil) sent an email to bluemineptyltd@gmail.com, copying Andre Abou-Antoun and Peter Abboud, attaching a remittance from AKA NSW in the sum of $529,731.39 on that date (Ex K at 56348).

132. [368]

     On 11 December 2012, Komel Kohli sent an email to Peter Abboud, copying Andre Abou-Antoun, attaching a remittance from AKA NSW for $652,825.83 on that date (Ex K at 56350).

133. [369]

     On 14 December 2012, Peter Abboud sent an email to Andre Abou-Antoun with the subject heading “BLUEMINE LAST INVOICE” requesting that Andre Abou-Antoun pay the last invoice to a different Bluemine account, stating that there had been a change of account (Ex K at 56347). An email was sent from bluemineptyltd@gmail.com later on the same day requesting Andre Abou-Antoun to “fix the last attached invoice” (Ex K at 56345).

134. [370]

     On 17 December 2012, Komel Kohli sent an email to Peter Abboud, copying Andre Abou-Antoun, attaching a remittance from AKA NSW for $500,000 on that date (Ex K at 56352).

135. [371]

     On 17 January 2013, Komel Kohli sent an email to Peter Abboud copying Andre and Michael Abou-Antoun attaching a remittance from AKA NSW for $267,760.99, stating (Ex K at 36354-56355):

136. [372]

     On 20 March 2013, an email was sent from bluemineptyltd@gmail.com to Andre Abou-Antoun and Komel Kohli, stating “hi guys please pay attached” attaching three invoices to AKA Civil from Bluemine (#AKAC/003 for $333,500; #AKAC/004 for $428,000 and #AKAC/002 for $342,500), again all for “Management./Supervision charges” (Ex K at 56360-56363).

137. [373]

     On 18 April 2013, Komel Kohli sent an email to “blue mine”, copied to Andre and Michael Abou-Antoun, attaching a remittance of the same date from AKA Civil for $342,500 (Ex K at 56364).

138. [374]

     On 1 May 2013, Komel Kohli sent an email to Peter Abboud, again copied to Andre and Michael Abou-Antoun, attaching a remittance from AKA Civil for $333,500 on 1 May 2013, stating (Ex K at 56356):

139. [375]

     In the period from 28 November 2012 to 7 February 2013, Bluemine made three transfers to Thailand totalling $48,090.00 (Thailand payments) (Table 5.7).

140. [376]

     On 11 December 2012, further RCTIs (numbered 25-30) were issued to Excavation. They are listed in Schedule 2 to the Borg Parties’ submissions.

141. [377]

     The RCG CBD third further amended statement of claim states at [44] and [166] that from 19 December 2012 to 14 May 2013, RCG CBD paid to Sivasli the total sum of $201,000, some of which came into RCG CBD from Involved Recruitment (Tables 3.10 and 3.13). The ASIC company extract for Sivasli shows that Turkel Fidel was the director and secretary of Sivasli from 2 June 2011 to 18 December 2012 (Ex K at 30250). From 18 December 2012, Fred Khalil was the sole director, company secretary and shareholder of Sivasli. The plaintiffs note that the first payment from RCG CBD to Sivasli, of $100,000, occurred on 19 December 2012 (the day after Fred Khalil’s appointment).

142. [378]

     Sivasli, in its defence filed in the RCG CBD Proceeding (at [15]), admits receiving the payments and particularises that the payments received were payments owed by the plaintiff company and were paid to the defendant as directed. The plaintiffs point out that Fred Khalil did not give or adduce any evidence in support of that pleading; and say that there is no evidence that RCG CBD “owed” Sivasli anything.

143. [379]

     The impugned payments made from and to Diamondwish and Rackforce are identified at Tables 7.1 to 7.7 and 9.1 to 9.2, respectively, of the plaintiffs’ submissions. One of the impugned Diamondwish and RCG CBD transactions (on which the plaintiffs place some emphasis) involves a payment on 21 December 2012 by RCG CBD to Diamondwish of $250,000; which was followed by a payment on 24 December 2012 by Diamondwish of $250,000 to Elle Barikhan (pleaded at [110] of the Diamondwish second further amended statement of claim) (see Table 7.4 of the plaintiffs’ submissions).

144. [380]

     Frank Criniti’s evidence about this payment was that this occurred because Gino Cassaniti said to him (Frank Criniti) that he wanted to pay money to Barikhan but “then Gino didn’t want to do it and said I had to do it, and this was the way it had to be done” and that “[i]t was done between Gino, Elle and a transaction from the Accounts Department at Head Office” (see at T 514). (The plaintiffs say that that payment could not have occurred without the knowledge and authority of George Khalil as the sole signatory to the bank account of RCG CBD and that it is to be inferred that the payment was to the benefit of Gino Cassaniti given that he was the sole shareholder of RCG CBD which paid the money to Diamondwish three days before the payment to Elle Barikhan. The plaintiffs describe this as “money laundering par excellence”.)

145. [381]

     On 20 December 2012, Borg Family drew a further cheque in favour of Excavation in the total amount of $200,000, which was recorded on Borg Family’s bank account statement.

146. [382]

     The Borg Parties note that, as at 20 December 2012, a total of $1,041,609.27 (incl GST) in RCTIs had been issued and Borg Family had paid Excavation $1,010,000 by way of cheque (and had arranged $220,186 in asset finance).

147. [383]

     On 21 December 2012, further RCTIs (numbered 31-38) were issued to Excavation, which are listed in Schedule 3 to the Borg Parties’ submissions. The total of RCTIs is $1,570,636.

148. [384]

     AKA Civil and AKA NSW paid $3,851,818 to Bluemine between December 2012 and May 2013. During the same period, Bluemine paid $3,800,719 to the AKA Parties (i.e., MAL Land Group, LAM Haulage and The Great Brothers) (see Table 5.2).

149. [385]

     Between 31 December 2012 and 9 January 2013, RCG CBD made payments to LFC Holdings (Peter Abboud was the sole shareholder, director and secretary of LFC Holdings) totalling $52,020. The plaintiffs note that there is no explanation for those transactions (and no record of any agreement between RCG CBD and LFC Holdings in relation to those transactions).

150. [386]

     As to two of those payments (on 31 December 2012 and 8 January 2013) amounting to $45,910, the plaintiffs note that Peter Abboud did not address them in his affidavit sworn in these Proceedings.

151. [387]

     On 7 January 2013, Borg Family drew a further cheque in favour of Excavation in the total amount of $150,000, which was recorded on Borg Family’s bank account statement.

152. [388]

     The RCG CBD third further amended statement of claim at [211] states that, on 23 January 2013 HCC Commercial Cleaning paid to RCG CBD $13,200; and on 24 January 2013 RCG CBD paid the same amount to Investmint (Table 3.6). The ASIC company extract for Investmint shows that, at the time of the HCC Commercial Cleaning payment, Fred Khalil was Investmint’s sole director, secretary and shareholder, having been appointed to those positions on 5 October 2011 and ceasing on 19 February 2014 (Ex K at 53088).

153. [389]

     Ignite Promotions made payments to RCG CBD in the period from 30 January 2013 to 6 March 2013, totalling $781,955. In the period from 5 February 2013 to 7 March 2013, RCG CBD made payments to Wenman Brimak totalling $710,868.20 (that is, the payment of $81,818.19 on 5 February 2013, $100,000 on 7 February 2013, $100,000 on 21 February 2013, $81,818.19 on 22 February 2013, $181818.19 on 28 February 2013 and $165,413.63 on 7 March 2013) (this being exactly ten-elevenths of $781,955) (see Table 3.3). The plaintiffs say that these transactions form part of the carousel of payments between Blackrock, Ignite Promotions, RCG CBD and Wenman Brimak.

154. [390]

     There is in evidence an email dated 7 December 2012 from Vipul Parekh to Peter Abboud headed “Invoices for Ignite Promotions; From RCG CBD P/L” (Ex K at 36321). On 9 January 2013, Peter Abboud sent an email to Brenda Louwen of Ignite Promotions and Elias Nassar (director of Blackrock Media), with attachments “inv107.pdf, Ignite Inv0300914.pdf”, in which email Peter Abboud writes:

155. [391]

     The plaintiffs point to two tax invoices (#03009124 and #0000107) from RCG CBD to Ignite Promotions dated 30 June 2012 and 30 September 2012 for the total sum of $710,868.18 that are both described as for “labour hire” (Ex K at 36323-36324).

156. [392]

     Further, there are four tax invoices from Ignite Promotions to Blackrock Media dated 30 January 2013, 20 February 2012, 27 February 2012 and 6 March 2012 for the total sum of $784,955 that are all described as for “[c]onsulting” (see Ex K at 36266-36269).

157. [393]

     Blackrock Media recorded in its General Ledger as a cash disbursement (i.e., as a purchase) the sums it paid to Ignite Promotions (Ex K at 36280). Similarly, Ignite Promotions recorded as purchases the sums it paid to RCG CBD and Bluemine and recorded as cash receipts the sums it was paid by Blackrock Media (Ex K at 36332 to 33). The plaintiffs say that recording those transactions as purchases was false and that it is to be inferred that the reason they were recorded as purchases was part of an accounting process whereby they would be claimed as deductible expenses (noting that they were claimed as tax deductions).

158. [394]

     The plaintiffs say that the RCG CBD payments to the Wenman Parties could only have occurred with the knowledge and concurrence of George Khalil as to every element of the transactions, including their purpose.

159. [395]

     On 27 February 2013, Excavation was placed under external administration by way of a creditors’ voluntary winding up, at which time Aloeseiafi Faanoi was the sole director (Ex K at 34052). Tanya Borg says the winding up occurred after all of Excavation’s assets were transferred to Borg Family on Fred Khalil’s advice.

160. [396]

     A subsequent claim by Excavation’s liquidators, Ozem Kassem and Jason Tang, was resolved as between the parties. The Borg Parties say (and I accept) that this is a neutral consideration.

161. [397]

     The plaintiffs say that the liquidator’s report (Ex V) records that the explanation provided by Michael Borg (a former defendant who did not give evidence in these Proceedings) at the time of Excavation’s winding up was that Excavation transferred the equipment to Borg Family at his direction in consideration for, or in forgiveness of, a debt owed to him. The plaintiffs note that Borg Family’s ledgers record that it paid for the equipment. The plaintiffs say that those ledgers were false; and that Borg Family did not pay for the equipment. (This issue relates to the impugned RCG CBD payments – see above). The plaintiffs note that Borg Family’s ledgers were prepared and or reviewed by Banq; that Banq prepared the Borg Parties’ taxation returns; and that Fred Khalil’s evidence was that Gino Cassaniti “oversaw” the accounts (and taxation returns) prepared for clients. I refer in due course to Tanya Borg’s evidence in cross-examination as to these transactions.

162. [398]

     Complaint is made by the Borg Parties that the plaintiffs’ submissions (at [1188] to [1190]), and all of the other submissions concerning the insolvency of Excavation, ought to have been, but were not, anticipated by pleadings. It is noted that the elements of the so-called Scheme Recommendation pleaded in the RCG CBD third further amended statement of claim at [148] do not involve the winding up of any entity other than RCG CBD. (Further, complaint is made that it was not put to Tanya Borg in cross-examination that Aloeseiafi Faanoi’s appointment was part of any arrangement with Gino Cassaniti or Fred Khalil or that it was improper; nor did the plaintiffs cross-examine Tanya Borg more broadly in relation to Excavation’s liquidation and winding up. The Borg Parties contend that the plaintiffs needed to do so if they wished to assert that Tanya Borg was relevantly engaged in impropriety in relation thereto.)

163. [399]

     Tanya Borg’s evidence was that she (and Michael Borg) first met Gino Cassaniti in 2014 after Borg Family received a letter from Ozem Kassem as one of the liquidators of Excavation.

164. [400]

     Liquidators (Ozem Kassem and Jason Tang) were appointed in a creditors’ voluntary winding up of Auswide on 26 March 2013, prior to which its sole director and company secretary was Aloeseiafi Faanoi (Ex K at 72082).

165. [401]

     By email 9 April 2013, Vipul Parekh (a Banq employee described in this email as the accounts supervisor for Reliance Cleaning) advised Khai Nguyen and Michael Chidiac at Compbiz (an entity which I understand to be an IT support contractor used by Banq) (which email was copied to Peter Abboud and Fred Khalil) of a request to change email “hosting” for all Reliance email accounts and to use the Banq server (Ex K at 38534). Michael Chidiac was a director of Compbiz. By the time of the subsequent liquidation of Compbiz in February 2014, Michael Chidiac had been succeeded as director by George Khalil.

166. [402]

     It appears that the requested change of email “hosting” was duly put in place. On 18 April 2013, (Ex K at 38532) George Khalil sent an email (using the georgek@banq.com.au email address), in which he signed off as the “Operations Manager” at Reliance Cleaning (forwarding the email chain on to Debbie Akkawi (an employee of Reliance Cleaning (see ATO interview, Ex K at 33968) and the director of Reliance Cleaning for one day on 23 July 2010 (ASIC record, Ex K at 33968)). The plaintiffs point to various email communications by one or more of the Banq personnel relating to one or more of the Reliance Cleaning, RC Group Aust or similarly named entities or in which Banq personnel (including George Khalil) were identified as having an administrative or managerial role in those entities (see below).

167. [403]

     On 24 May 2013, Borg Civil Australia drew a cheque for $33,000. The Borg Parties note the contemporaneous documentary evidence: the cheque butt numbered 000418; the contents of the remittance advice, which records “418” as the “Payment number”; and the contents of the General Ledger, which also refers to the number “418”. It is noted that: the cheque butt records the payee as “Banq Accountants”; all of Borg Civil Australia’s documents consistently record “Banq Accountants” as the payee consistently with the cheque butt; and the payment reference number is “418”, which is the cheque number.

168. [404]

     As to the payments made by Borg Family and Borg Civil to RCG CBD in the period from 25 September 2012 to 24 May 2013 totalling $618,000 and the payments from RCG to Borg Family in the period from 25 September 2012 to 10 October 2012 in the sum of $580,000, the plaintiffs say that when those payments were occurring in relation to Borg Family (that is, the payment of $185,000 on 25 September 2012, $75,000 on 3 October 2012 and $320,000 on 10 October 2012) they could only have occurred with the knowledge and concurrence of George Khalil as to every element of the transaction including their purpose.

169. [405]

     The plaintiffs say that George Khalil must have known the reason the payment from Borg Family/Borg Civil was coming in and that it was to be paid to Borg Family, and that occurred in accordance with the Scheme Recommendation and the conspiracy. The plaintiffs say that George Khalil must have known that the transactions with Borg Parties involved $33,000 being kept by RCG CBD.

170. [406]

     An ATO file note for Earth Civil records that, on 13 June 2013, an officer of the ATO spoke with a receptionist at Banq and left a message for Earth Civil’s Tax Agent regarding an impending enforcement garnishee (Ex K at 10314). It further records that on 19 June 2013, a warning of intended debt collection action was issued to Earth Civil in respect of an amount of $160,076 (see also Ex K at 10305). The plaintiffs note that this was shortly after (on Andre Abou-Antoun’s evidence) Gino Cassaniti had instructed him to withdraw $200,000 from Earth Civil’s bank account on 28 May 2013. The plaintiffs say that Gino Cassaniti must have known of the debt of $160,076 to the ATO at that time. The plaintiffs submit that this was paying Earth Civil’s money away with the intent that the debt to the ATO would not be paid; that this was fraudulent and to the prejudice of Earth Civil’s economic right or interest.

171. [407]

     Bluemine issued an invoice to Ignite Promotions (#13033103) dated 31 March 2013 in the amount of $385,880.00 for “Labour Hire” (the copy in evidence bearing the annotation “Paid 25/6/13”) (Ex K at 56219). On 19 June 2013, Peter Abboud sent an email (Ex K at 56218) to Brenda Louwen headed “FW: Emailing: Ignite” with an attachment “ignite.pdf” (apparently being the Bluemine 31 March 2013 invoice). On 25 June 2013, Ignite Promotions paid Bluemine $385,880. The following day (26 June 2013), Bluemine paid Wenman Brimak the sum of $350,835. On 27 June 2013, the sum of $35,045 was paid to Banq (see [140(b)] of the Bluemine third further amended statement of claim). (Elias Nassar disavows the provision of any labour hire services by Bluemine to Ignite Promotions.)

172. [408]

     On 28 June 2013, there was an email chain (on which the plaintiffs place emphasis) between Steven Bazouni, of Cor Cordis (a firm of accountants), Gino Cassaniti and Alison Hanna of Banq (Fred Khalil’s personal assistant) between 2.56 pm and 3.26 pm, relating to the proposed voluntary liquidations of, amongst others, RCG CBD and Involved Recruitment.

173. [409]

     The first email, chronologically in the chain, with the subject header “Re: Proposed Creditors Voluntary Liquidations RE: RCG CBD PTY LTD, EARTH CIVIL AUSTRAILIA PTY LTD, INVOLVED RECRUITMENT PTY LTD AND CHARLIE AND SON ELECTIRACAL [sic] CONTRACTING PTY LTD” stated (Ex K at 56557):

174. [410]

     The subject line of the second email from Gino Cassaniti (incorporating his personal logo) to Alison Hanna (Fred Khalil’s personal assistant) read “FW: Proposed Creditors Voluntary Liquidations”. There was no message. The email bears the Banq logo with the signature line “Gino Cassaniti - Accountant” (Ex K at 56569).

175. [411]

     The third email in the chain (again with the subject header “RE: Proposed Creditors Voluntary Liquidations”) contained pdf attachments, being documents created on 28 June 2013, and stated (Ex K at 56569):

176. [412]

     The plaintiffs place weight on the above communications (see in due course) as belying Gino Cassaniti’s denial that he signed the liquidation documents.

177. [413]

     The plaintiffs place emphasis on the fact that, broadly speaking, the modus operandi for the winding up of the Insolvent Companies and corporate Scheme Participants and/or associated entities was that: the companies had a change of director (a so-called “jump-on” director) shortly before being wound up; Banq selected the new directors (who were often directors of otherwise unrelated companies whose only common link was Banq); and Banq lodged the Form 484 recording the change (often seemingly backdated). (The plaintiffs point to Frank Criniti’s evidence in this regard to the effect that Gino Cassaniti advised him that the way to extinguish liabilities was to appoint a dummy director and wind up the company.) Further, the plaintiffs say that in each case there is a striking coincidence and similarity of the putative creditors’ claims in the winding up of the Insolvent Companies, noting that, other than for the ATO, there was no particularisation of claims provided to the liquidator, the claims were for significant rounded sums, and all the claims were rejected by the liquidator.

178. [414]

     The plaintiffs say that, in the case of each of the Insolvent Companies, Gino Cassaniti was indirectly a purported creditor in that (contrary to his assertions in his affidavit) Banq (of which he was a principal) and GTO Holdings (of which he was a director) lodged proofs of debt for alleged unpaid invoices (see, for example, Table D.4 and Table D.5).

179. [415]

     At the relevant creditors’ meetings (such as for Diamondwish on 12 September 2013), Fred Khalil was the proxy holder for all creditors other than the ATO (see the liquidator’s affidavit sworn 8 February 2017 at [22]). It is noted that Gino Cassaniti’s signature appears on the proxies for himself and for GTO Holdings for the relevant meetings relating to Diamondwish and Rackforce Ex K at 70413, 70415). It is also noted that, other than the ATO, all of the creditors’ claims were rejected by the liquidator for lack of substantiation (see the liquidator’s affidavit sworn 7 June 2018 at [7])).

180. [416]

     In his affidavit sworn 11 April 2019 (at [13]), Gino Cassaniti deposes to the effect that he had a conversation with someone at Banq in May or June 2013 during the course of which he told that person that he thought he would go bankrupt and that that person asked him to be a director of some of that person’s clients’ companies for a short period of time. (The logic of becoming a director of a company shortly before anticipated entry into bankruptcy is presumably akin to that apparently underlying the concept of “jump-on” directors (i.e., to provide some protection for the “real” directors by putting in place someone without assets to meet any liabilities as a director – but this is supposition).)

181. [417]

     Gino Cassaniti has asserted: (at [15] of his affidavit) that he was not asked to sign and did not sign consents for directorship of RCG CBD, Bluemine, Earth Civil or Involved Recruitment; (at [17]-[23]) that he did not act as a director of or manage the affairs of those companies, did not agree to become a shareholder of those companies and did not resolve to place the companies in liquidation; and that he was not owed money by those companies and did not sign any proofs of debt or creditors’ proxy for any of those companies. (I refer in due course to the expert evidence as to documents purportedly signed by Gino Cassaniti, which in general does not support Gino Cassaniti’s assertions denying the authenticity of his signatures on these documents.)

182. [418]

     Each of Earth Civil, RCG CBD and Involved Recruitment was wound up on 28 June 2013 by way of a creditors’ voluntary winding up commenced by resolution of Gino Cassaniti.

183. [419]

     On 28 May 2013, one month before Earth Civil, RCG CBD and Involved Recruitment were wound up, a Form 484 recording a change of company details was lodged for each company which had purportedly been signed by Gino Cassaniti on 1 January 2013 (Earth Civil, Ex K at 10241; RCG CBD, Ex K at 31691; Involved Recruitment, Ex K at 59393).

184. [420]

     As to Earth Civil, the Form 484 recorded that Michael Abou-Antoun had ceased to be the sole director and shareholder on 1 July 2012 and that Gino Cassaniti was appointed a director and became the sole shareholder on the same day. The ASIC extract for Earth Civil records the effective date of those changes as being 1 January 2013 (Ex K at 10239).

185. [421]

     As to RCG CBD, the Form 484 recorded that George Khalil had been appointed and ceased to be a director on 16 May 2012 and Gino Cassaniti had been appointed a director since 16 May 2012. The ASIC extract for RCG CBD records the effective date of those changes as being 16 May 2012 (Ex K at 30237).

186. [422]

     The plaintiffs rely on Gino Cassaniti’s signature, as a director, on the resolution appointing Mitchell Ball as the liquidator of Earth Civil and RCG CBD as constituting an admission by Gino Cassaniti that he was a director of each of Earth Civil and RCG CBD (Ex K at 14129, 55825). It is said that this, coupled with the filing of the Form 484 for each company, either by Gino Cassaniti or with his consent or knowledge may be relied upon to infer that Gino was a director of Earth Civil and RCG CBD from 16 May 2012 (see Gino’s affidavit sworn 11 April 2019 at [13]). It is said that this independent evidence supports the ASIC records’ prima facie position to that effect.

187. [423]

     As to Involved Recruitment, the purported creditors of the company included Gino Cassaniti in the amount of $75,000 and Banq in the amount of $150,000 (Ex K at 33358). The plaintiffs emphasise that the resolution was signed by Gino Cassaniti. It is noted that this was one of the documents that was forwarded on his behalf to the liquidator on 28 June 2013 by email, and that he now asserts was not signed by him and that his signature was a forgery.

188. [424]

     On 3 July 2013, the ATO lodged a formal Proof of Debt in the amount of $446,973, being the running balance account deficit debt in respect of BAS amounts as at 28 June 2013 for Involved Recruitment (Ex K at 33379-33382).

189. [425]

     On 4 July 2013, Fred Khalil was appointed the proxy for Gino Cassaniti and Banq with respect to their Proofs of Debt against Involved Recruitment (Ex K at 33363-33366).

190. [426]

     Borg Family claimed tax depreciation expenses in the Trust’s income tax return for the year ending 30 June 2013 in relation to the machinery and equipment said to have been purchased by way of the payments between Borg Family and RCG CBD. The Borg Family Financial Statements for the year ended 30 June 2013 contain a depreciation schedule (Ex W at 43-44). The first three items in the schedule include the equipment transferred as a result of the $185,000 payment from Borg Family to RCG CBD as recorded in the Borg Family Ledger (Ex W at 9) and the RCTI (created by Borg Family) at (Ex W at 5-7). The total depreciation of $144,176 is claimed in the company’s income tax return for the year ending 30 June 2013 (Ex W at 50) which is signed by Tanya Borg (Ex W at 54). The plaintiffs say that those taxation records were false (see below).

191. [427]

     Pausing here, I note that Counsel for the Borg Parties points out that, in cross-examination, the liquidator confirmed that Borg Family never claimed any input tax credits in relation to the impugned payments (see T 245-246).

192. [428]

     A meeting of creditors of Earth Civil was held on 9 July 2013 (Ex K at 11653). The minutes record that Fred Khalil attended the meeting by telephone as proxy for Gino Cassaniti and Banq. The minutes further note that, after discussion about the status of the books and records of the company, Fred Khalil undertook to deliver books and records of the company “in his possession” to the liquidator’s office “in short order” (Ex K at 11655).

193. [429]

     On 8 August 2013, the liquidator wrote to Gino Cassaniti in relation to Involved Recruitment requiring provision of, or confirmation that he did not have, company records other than the BAS for the period from 1 April 2012 to 31 March 2013; a payroll activity summary for financial year ending 30 June 2013; and employee PAYG summaries for the financial year ending 30 June 2013, which the liquidator had already been provided (Ex K at 33472).

194. [430]

     Subsequently, on 21 February 2014, the liquidator of Involved Recruitment wrote to Gino Cassaniti providing him with a formal notice to deliver books and records to the liquidator and answer a questionnaire for the directors and officers of Involved Recruitment (Ex K at 33466). The liquidator’s evidence is that, other than the documents identified above, he was not provided with any further books and records of Involved Recruitment; and that “the company has failed to keep financial records which correctly record and explain the company’s transactions and financial position and performance … or provide to me any of the Expected Financial Records” (liquidator’s affidavit sworn 7 June 2018 at [95]).

195. [431]

     Each of Bluemine, Diamondwish and Rackforce was wound up on 26 August 2013.

196. [432]

     Bluemine was wound up pursuant to a resolution by Gino Cassaniti as its sole director.

197. [433]

     Christopher Cherry was the sole director of Rackforce and Diamondwish when they were wound up.

198. [434]

     Relevantly, Frank Criniti’s evidence as to Christopher Cherry’s appointment as a director (at T 532.12-28) was to the effect that he had never met Mr Cherry and was unaware of Mr Cherry ever conducting business for Diamondwish. Frank Criniti recalled having a discussion with someone at Banq about a new director.

199. [435]

     Christopher Cherry’s evidence (at T 902.7-903.13), which corroborates that of Frank Criniti, was to the effect that he had no role at Diamondwish or Rackforce; he never carried out any duties for Diamondwish or Rackforce; he did not know who Frank Criniti was; and he could not recall how he came to be a director of Diamondwish or Rackforce.

200. [436]

     Gino Cassaniti says he ceased acting as a consultant to Banq in December 2013 (Gino Cassaniti’s affidavit sworn 11 April 2019 at [30]).

201. [437]

     On 18 March 2014, Gino Cassaniti became bankrupt (and he was not discharged from bankruptcy until March 2017). The proof of debt lodged by the Commissioner in respect of Gino Cassaniti’s bankruptcy was in the sum of $1,126,241.19.

202. [438]

     As adverted to above, after the liquidator’s appointment to the Insolvent Companies, requests were made for books and records of the company. I have referred above to the limited material produced. Reliance is placed on the lack of records as giving rise to the deemed insolvency of the companies (see T 156) (see below at [2528]).

203. [439]

     In an email to the OSR on 12 June 2014, in relation to a payroll taxation audit of another entity (Melhem Civil Pty Ltd) (Ex K at 38757), Peter Abboud attached contractor invoices for Bluemine and RCG CBD and, in his reply to comments (in red), Peter Abboud stated that RCG CBD was not a labour hire company (Ex K at 38758):

204. [440]

     It is noted that, more than a year after the $33,000 cheque was drawn, a payment of $15,000 was made by Borg Family to Bluemine on 30 June 2014 (cf plaintiffs’ submissions [441], it is said that the payment was not made on 30 July 2013). The Borg Parties say that (contrary to the incorrect assertion at plaintiffs’ submissions [221(e)]), the amount of the payment from Borg Family to Bluemine has always been $15,000 and never in dispute.

205. [441]

     A s 353-10 Notice dated 5 August 2016 was issued by the ATO to Reliance Cleaning (Ex K at 31702). Relevantly, at Sch B of the s 353-10 Notice, the ATO requested (for the financial years ending 30 June 2013, 2014 and 2015): at item one, “all contract(s) and agreement(s) that you have with RCG CBD Pty Ltd or their associate(s)”; and at item three, “all documents relating to the services provided by persons on behalf of, or as part of an agreement with RCG CBD Pty Ltd, including contracts, agreements and records of work performed by these persons including but not limited to timesheets” (Ex K at 31704).

206. [442]

     In response to the ATO, by letter dated 6 October 2016, Brown Wright Stein (who acted, amongst others, for Banq, Reliance Cleaning and RCG CBD) advised that there were no documents within the possession, power or control of Reliance Cleaning (Ex K at 31706). However, Brown Wright Stein did provide a number (44) of invoices purporting to be from RCG CBD to Reliance Cleaning for “labour hire services” (Ex K at 31713-31756). The plaintiffs contend that these are false invoices, created for appearances, pointing among other things to the fact that the invoice numbers appear to be simply dates in reverse and that the details for RCG CBD and the address of Reliance Cleaning are those of Banq. It is noted that no such invoices were provided by Banq when sought by the liquidator in 2013; yet in October 2016, Brown Wright Stein were apparently provided with such invoices by Banq. The plaintiffs’ position is that these RCG CBD invoices to Reliance Cleaning are 2016 reconstructions from RCG CBD’s bank transactions and are false.

207. [443]

     In response to question 6 of the s 353-10 Notice which queried Reliance Cleaning’s employees, Brown Wright Stein advised that there was one employee (Chirag Rathi) (Ex K at 31707). As to whom from RCG CBD provided services (question 4 of the s 353-10 Notice), Reliance’s response was that it had not been able to locate the records or information to respond to that question. The QBE certificate of currency for workers compensation insurance annexed to the Brown Wright Stein letter stated that Reliance Cleaning had six employees with $100,000 in wages. (The plaintiffs say that this demonstrates that, at all relevant times, RCG CBD carried on no legitimate business, and that the purported RCG CBD invoices in evidence in these Proceedings are false.)

208. [444]

     Reliance Cleaning was wound up on 5 September 2017, in circumstances where a new director, Hussein El-Massri, had been appointed three months prior thereto, on 10 July 2017 (Ex K at 33968).

209. [445]

     Banq was wound up by the ATO on 18 July 2018, with a debt of $617,248 owing to the ATO. Hussein El-Massri was the sole director and secretary on the ASIC Record at the time (Ex K at 33963).

210. [446]

     Tendered in evidence were transcripts of compulsory ATO examinations conducted with various of the defendants (including, relevantly, Peter Abboud – Ex 17, and Fred Khalil – Ex 18). As noted above, objection was initially taken (by the AKA Parties) to the tender of those transcripts (see T 32) based, in the case of Andre Abou-Antoun, on the accusatorial process and privilege against self-incrimination. The plaintiffs sought to tender the transcripts as business records of the ATO. I provisionally admitted Fred Khalil’s and Peter Abboud’s ATO transcripts, subject to relevance (see T 61, 63). Ultimately, an agreement was reached whereby the unredacted transcripts were admitted without objection and without qualification (see Exs 17-18; T 1429) (albeit with some reservation as to any relevant objections). I provisionally admitted portions of Andre Abou-Antoun’s transcript (Ex P, O); and portions of Andrew Barsa’s transcript (Ex E). As to George Said’s transcript, I admitted portions of his transcript dated 3 June 2019 (Ex U) without provisional qualification, as admissions against interest as detailed in, In the matters of Earth Civil Australia Pty Ltd, RCG CBD Pty Ltd, Bluemine Pty Ltd, Diamondwish Pty Ltd and Rackforce Pty Ltd (all in liq) [2020] NSWSC 293 (Earth Civil 23 March 2020 Judgment). Further, other portions of interview transcripts with George Said were only provisionally admitted pending a hearsay ruling (Ex Q, R – see T 1021). Mr Robertson’s request, I noted in the hearing that so much of Ex R which is finally admitted would be the subject of a s 87(7) certificate (T 1024).

211. [447]

     In 2019, after the Proceedings had been fixed for hearing, an application was made by the AKA Parties for the appointment of a special purpose liquidator (in order to consider or pursue an objection to the tax assessments) (see In the matter of Bluemine Pty Ltd (in liq) [2019] NSWSC 1474 (In the matter of Bluemine)).

212. [448]

     Black J, in rejecting that application said (at [11]), that he doubted that the offer of the AKA Parties and Gino Cassaniti of $125,000 was sufficient to fund the special purpose liquidator’s investigation of the basis for an objection. At [17], [21], his Honour identified the fundamental difficulty that:

213. [449]

     I refer to his Honour’s reasons not for any fact-finding purpose (noting s 91 of the Evidence Act), but because it forms part of the factual context to the submissions here made by the AKA Parties (and others) in relation to the causation defences.

Pleaded claims

1. [450]

   It is important at this point to note how the plaintiffs’ claims are pleaded, not least because of the defendants’ insistence that the plaintiffs be held to their pleadings, but also because there was much criticism made as to the pleaded case (see below).

2. [451]

   The pleading of the Scheme, and that the Scheme and Gino Cassaniti’s participation in the Scheme constituted a breach of various directors’ duties of a fiduciary nature in which various defendants knowingly assisted, followed a common structure in the respective Proceedings, which I will address by reference to the pleading in the Bluemine Proceeding.

3. [452]

   Before turning to the pleading, however, I note that the alleged breaches of fiduciary duty in the respective Proceedings are identified as having been made: in the Earth Civil Proceeding, by Gino Cassaniti; in the RCG CBD Proceeding, by Gino Cassaniti and George Khalil; in the Bluemine Proceeding, by Gino Cassaniti (not Andrew Barsa, the other director); in the Diamondwish Proceeding, by Frank Criniti; and in the Rackforce Proceeding, by Frank Criniti.

4. [453]

   The pleaded Scheme comprises: the alleged Primary Conspirators (at [102]-[106]); the alleged Scheme Participants, including their characterisation as either Receiving or Paying Participants (at [107]-[130]).

5. [454]

   The “primary conspiracy” (at [131]), which it is alleged existed during 2012 to 2013, is pleaded as a conspiracy “to defraud and injure companies” and “to engage in dishonest and fraudulent transactions with an intention to defraud and injure such companies” and “to defraud the … Commissioner of Taxation”. (Pausing here, I note that Ivana Cassaniti emphasises the difference between the potential consequence of conducting a tax avoidance scheme and the purpose or intention of such a scheme. I will return to the difference between purpose and effect in due course. I simply here note that one would ordinarily be expected to intend the natural consequences of one’s actions – and hence there may in practical terms be little distinction at least if the effect was one that might be expected to follow in the ordinary course from the acts in question.)

6. [455]

   As to the alleged Scheme Recommendation, it is alleged that, in late 2012 to May 2013, the Primary Conspirators recommended or represented to the Scheme Participants that, if the Scheme Participants entered into transactions, the Paying Participants could claim GST credits and expense deductions, and thereby reduce their taxable income (see at [137]).

7. [456]

   At [215], it is alleged that “[b]y implementing the Scheme Recommendation, Discobell and Banq knowingly participated in dishonest and fraudulent conduct, and knowingly assisted in dishonest and fraudulent conduct”.

8. [457]

   As to the purpose and effect of the Scheme, it is pleaded (at [225(i)]) that a “purpose and effect” of the Scheme was “to render Bluemine insolvent and unable to discharge its taxation liabilities due to the… Commissioner”.

9. [458]

   At [227] and [260], it is pleaded that: because the Receiving Participants received moneys from Bluemine, they caused Bluemine to lose those funds (Ivana Cassaniti says that this is despite the very basis of the scheme being that Bluemine had no entitlement to receive any funds); by paying money into Bluemine, the Paying Participants caused Bluemine to be exposed to a risk of an audit and a risk of assessments by the Commissioner which reviewed activity statement amounts, determined income tax liability, imposed a penalty and/or general interest charge (which, it is said by Ivana Cassaniti, presumably would only arise if the Commissioner did not discover or work out that the payments were a sham and not intended to be treated as real income by Bluemine); “by reason of the matters in paragraphs 1 to 241 above”, each of the Scheme Participants is liable for the whole of Bluemine’s loss.

10. [459]

    The duties of the fiduciary (Gino Cassaniti) are pleaded at [239]. The particulars of fiduciary duties and trust are particularised as: (a) including a duty not to permit the interests of any of Fred Khalil, Banq and the Scheme Participants to conflict with the interests of Bluemine; (b) a duty not to allow the duties which he owed as the director to Bluemine to conflict directly or indirectly with his own interests personally or with interests of each and all of Fred Khalil, Banq and the Scheme Participants; (c) a duty not to derive a benefit, directly or indirectly, for any one or more of Fred Khalil, Banq and the Scheme Participants from information acquired or acts done as a director of Bluemine; (d) a duty not to allow or cause the interests of Bluemine to be affected adversely; and (e) a duty not to allow or cause the dissipation of Bluemine’s assets other than for genuine commercial obligations.

11. [460]

    As to the alleged dishonest breaches of duty by the fiduciary, it is alleged that (at [240]-[241]):

12. [461]

    The claims for accessorial liability (based on the second limb Barnes v Addy) with regard to every impugned transaction in the respective proceeding are made, identifying: in the Earth Civil Proceeding, Gino Cassaniti as director fiduciary, and Fred Khalil, George Khalil and Peter Abboud, as accessories; in the RCG CBD Proceeding, Gino Cassaniti, as director fiduciary, and Fred Khalil, George Khalil and Peter Abboud, as accessories; in the Bluemine Proceeding, Gino Cassaniti as director fiduciary and Fred Khalil, George Khalil and Peter Abboud, as accessories; in the Diamondwish Proceeding, Frank Criniti, as director fiduciary, and Gino Cassaniti, Fred Khalil, George Khalil and Peter Abboud, as accessories; and in the Rackforce Proceeding, Frank Criniti, as director fiduciary, and Gino Cassaniti, Fred Khalil, George Khalil and Peter Abboud as accessories.

13. [462]

    Further claims of accessorial liability are made against the Scheme Participants limited to the respective transactions claimed against them, as follows: in the Earth Civil Proceeding, Michael Abou-Antoun, AKA Civil, AKA NSW; in the RCG CBD Proceeding, Sivasli, Borg Family, Tanya Borg, Borg Civil, Michael Borg, Kamikaze Teppanyaki, George Said, Scott Crabbe and John Haddad; in the Bluemine Proceeding, LAM Haulage, MAL Land, The Great Brothers, Andre Abou-Antoun, Michael Abou-Antoun, AKA Civil, AKA NSW, John Haddad, Borg Family, Tanya Borg, George Said, Ivana Cassaniti and Discobell; in the Diamondwish Proceeding, Ivana Cassaniti; and in the Rackforce Proceeding, Ivana Cassaniti.

14. [463]

    The pleading of knowing assistance in a breach of fiduciary duties by Gino Cassaniti is relevantly that (at [242]-[244]):

15. [464]

    The relevant assistance is pleaded (at [242]) to be the implementation of the Scheme Recommendation and participating in their respective transactions; and the relevant knowledge of the Scheme Participants is limited to “their respective transactions as pleaded above”.

16. [465]

    At [246], it is pleaded that the Scheme Participants (concerning their respective transactions) aided, abetted, counselled or procured Gino Cassaniti’s breaches by: as to the Paying Participants, in making their payments (which Ivana Cassaniti says suggests that the relevant conduct by the Paying Participants is confined to that conduct only and only those transactions); as to the Receiving Participants, in receiving their payments (which Ivana Cassaniti says suggests that the relevant conduct by the Receiving Participants is confined to that conduct only and those transactions); allowing Fred Khalil and Peter Abboud to lodge fictitious tax returns for the Scheme Participants (a proposition that it is said does not apply at all to Ivana Cassaniti because there is no suggestion that Discobell or Givana Prestige filed false tax returns); the absence of any documentation concerning the Bluemine transactions (an allegation as to a state of affairs that it is said could not be said to be conduct on the part of the Scheme Participants at all, let alone assistance to Gino Cassaniti to breach his duties).

17. [466]

    At [248], the alleged statutory duty of care is said to arise out of the matters up to [133]. (Ivana Cassaniti says that this presumably arises simply on the basis of the allegation that Gino Cassaniti was a director of Bluemine; and it is presumed that the duty is said to be owed to Bluemine.)

18. [467]

    At [249], it is pleaded that Gino Cassaniti breached this duty, the particulars of breach referring back to [228] to [235] and [239] to [241]. It is then alleged that each Scheme Participant was knowingly concerned in Gino Cassaniti’s breach of this duty of care and diligence (at [250]). The pleadings of the statutory duty of good faith and the statutory duty not improperly to use the position as director effectively mirror the pleading of the statutory duty of care.

19. [468]

    The monetary claims made against Gino Cassaniti and the other alleged co- conspirators are:

20. [469]

    The plaintiffs say that each of the impugned transactions occurred without authority of the respective Insolvent Company. They point out that no defendant has sought to make out a positive case for authority of the relevant company in respect of any transaction; nor (except Tanya Borg) that any transaction was for a genuine commercial reason.

21. [470]

    In addition, it is submitted that the corporations were insolvent at all relevant times. It is said that the transactions involving Michael Abou-Antoun in the Earth Civil Proceeding and Sivasli in the RCG CBD Proceeding, and involving MAL Land Group, LAM Haulage and The Great Brothers in the Bluemine Proceeding, were uncommercial and insolvent transactions, occurred within two years of the relation-back day, and were voidable. As a result, against each of the recipient defendants identified above, the plaintiffs seek orders pursuant to s 588FF(1) of the Corporations Act for payment of sums equivalent to the sums paid away by the respective Insolvent Company, for each relevant transaction.

22. [471]

    It is said that the transactions identified above, together with the payments by RCG CBD to Borg Family of $580,000, were all without authority, to volunteers, and the plaintiffs are entitled to orders that equivalent sums be paid to the respective plaintiffs on the basis of unjust enrichment/money had and received.

23. [472]

    The defendants made various complaints as to the pleadings which I set out here.

24. [473]

    For Ivana Cassaniti, it is said that the Scheme Recommendation is a key plank in the plaintiffs’ case because it is the only basis upon which the plaintiffs can contend that the alleged Scheme, involving different clients, was one unified scheme rather than a series of unconnected attempts by clients of Banq to avoid paying income tax. It is contended by Ivana Cassaniti that the pleading of the Scheme Recommendation exposes a lacuna in the plaintiffs’ case; namely, that, although it is explained how the Scheme Participants become involved in the Scheme, by being told about the Scheme Recommendations (thereby satisfying the knowledge requirement), and then that the Scheme Participants then entered into transactions pursuant to the Scheme Recommendation (thereby satisfying the assistance requirement) (see, for example, Bluemine’s third further amended statement of claim at [141]), there is no pleading as to how the Paying Participants and Receiving Participants become part of the Scheme, at least with knowledge of the Scheme. It is noted that there is an allegation that “all material times” various defendants were directors or corporate defendants and were the “directing will and mind of those respective companies” (see at [236]) but it is said that this does not suffice as a basis for pleading that Paying Participants and Receiving Participants had knowledge of the Scheme; and in particular, by reason of a Scheme Recommendation having been made to them.

25. [474]

    As to [225], criticism is made by Ivana Cassaniti that no attempt is made to distinguish between what the purposes of the Scheme might have been and what the effects of the Scheme might have been; a distinction said to be of importance when addressing the question of knowledge.

26. [475]

    Complaint is made by Ivana Cassaniti (and echoed by various of the defendants) that the plaintiffs’ pleadings do not have a bright line that separates the operation of a scheme and the breaches of duty, with the consequence that the two concepts are intermingled which, it is said, introduces a significant level of obscurity to the duties case. So, for example, in the Bluemine Proceeding, it is noted that in respect of each of the breaches of duty pleaded at [239], [248], [252] and [256], it is alleged that Gino Cassaniti owed the duty by reason of all the matters pleaded in relation to the Scheme itself (i.e., up to [133]). Ivana Cassaniti says that it is necessary to draw a line between the Scheme and the breaches of duty because the claims based on breaches of duty require the identification of the relevant conduct of Gino Cassaniti, as a director of the relevant company, that it is said to be in breach of his duties, and then to examine how it is said that Ivana Cassaniti assisted in that breach, rather than to approach the matter in a broad-brush manner.

27. [476]

    Ivana Cassaniti notes that the first duty of Gino Cassaniti relied upon is that of a constructive trustee (at [239]). It is said by Ivana Cassaniti that there is a problem of circularity with this pleaded breach; in that it is pleaded (at [240]) that, by making the Scheme Recommendation and by implementing the transactions contemplated by the Scheme Recommendation, Gino Cassaniti was in breach of his duties as a constructive trustee but that it does not appear to plead how Gino Cassaniti could have been the constructive trustee of Bluemine (or any funds) but for the making of the Scheme Recommendation and by implementing transactions pursuant to it. (emphasis added)

28. [477]

    Ivana Cassaniti says that the series of allegations following the claim that Gino Cassaniti’s breach of duty and trust was dishonest and fraudulent against Bluemine (at [241]), suffer from further difficulties.

29. [478]

    As to the allegation (at [242]), that each of the Primary Conspirators and the Scheme Participants assisted Gino Cassaniti in his dishonest and fraudulent actions (that is, the making of the Scheme Recommendation and by implementing, facilitating or permitting the transactions) with knowledge that Gino Cassaniti’s breaches (of trust and duty) were dishonest and fraudulent. Ivana Cassaniti says that this presumably excludes Gino Cassaniti as a Primary Conspirator (i.e., as I understand it, that it cannot be intended to say that Gino Cassaniti was assisting himself).

30. [479]

    Complaint is made that the pleading (while referring back to previous paragraphs) does not explain how Gino Cassaniti failed to act with care and diligence as a director of Bluemine (bearing in mind that the plaintiffs’ case is that Bluemine was incorporated for the purpose of implementing the Scheme and its controlling mind was Gino Cassaniti). It is said that if the plaintiffs’ case is accepted, it is difficult to see how any of Gino Cassaniti’s conduct lacked due care and diligence unless it is suggested that the Scheme could have been conducted in such a way as not to have given rise to any tax avoidance penalties or, perhaps, by not allowing the Scheme to be detected. Complaint is made that there is no attempt in the pleading to identify conduct on the part of any Scheme Participant which is said to have assisted Gino Cassaniti in his breach of this duty; nor is there any attempt to identify specifically the facts said to constitute the breach of the duty of care of which it is alleged the Scheme Participants had knowledge (beyond referring back to [1]-[241] and [244]-[246]).

31. [480]

    Complaint is made that it is not possible to identify what specific conduct by Ivana Cassaniti caused her to be involved in Gino Cassaniti’s breach or how it could be said that she had knowledge of that breach. The same complaint is made of the pleading of the statutory duty of good faith and the statutory duty not to use improperly the position as director.

32. [481]

    The Khalil defendants note the observation in Breen v Williams (1996) 186 CLR 71; [1996] HCA 57 (Breen v Williams) at [41] per Gaudron and McHugh JJ that, beyond the proscriptive obligations not to obtain any unauthorised benefit from the fiduciary relationship and not to be in a position of conflict, the law in this country does not impose positive legal duties on the fiduciary to act in the interests of the person to whom the fiduciary duty is owed. They submit that, therefore, liability for a fiduciary, under Barnes v Addy, arises only in cases of breach of those proscriptive obligations (referring also to Pilmer v Duke Group Ltd (in liq) (2001) 207 CLR 165; [2001] HCA 31 (Pilmer v Duke Group) at [74]).

33. [482]

    The Khalil defendants say that the pleading by the plaintiffs of the duties owed by the fiduciaries of each of the Insolvent Companies, which is in similar terms across the respective Proceedings (see RCG CBD Proceeding at [233], Bluemine Proceeding at [239], Rackforce Proceeding at [95], Diamondwish Proceeding at [186] and Earth Civil Proceeding at [74]), is in ambiguous terms (and not wholly reconcilable with the three fiduciary duties identified in BCI Finances v Binetter by Gleeson J at [260]).

34. [483]

    In particular, by reference to the pleading in the Bluemine Proceeding (at [239]), the Khalil defendants say that: the duty alleged at (a) (not to permit the interests of others to conflict with the interests of Bluemine) is not a fiduciary duty; the duty alleged at (b), although it includes the “conflict rule” as identified in BCI Finances v Binetter, is expanded to a duty not to allow the interests of others to conflict with the duties owed by Gino Cassaniti to Bluemine (which is not an obligation of a director); the duty alleged at (c) is said to be a duty not to derive a benefit “for” another from information acquired or acts done by Gino Cassaniti as a director of Bluemine; the duty alleged at (d) is said to be a dual duty not to allow the “interests” of Bluemine to be adversely affected, nor to permit any detriment to Bluemine, for Gino Cassaniti benefit “in his capacity as director” or for the benefit of another; and the duty alleged at (e) is not to allow dissipation of the company’s assets other than for genuine commercial obligations.

35. [484]

    The breaches of fiduciary duty in the Bluemine Proceeding (at [240]) are said to be the making of the Scheme Recommendation and implementing “the transactions”. The Khalil defendants say that the balance of the particulars to [240] (after the reference to the whole of the matters pleaded in the preceding paragraphs) refer to matters which do not obviously fall within the pleaded duties and are not particulars of the breaches alleged.

36. [485]

    The Khalil defendants say that none of the duties pleaded is a fiduciary duty nor are the breaches of duty properly pleaded or particularized. Here, reference is made to what was said in Farah Constructions (at [170]), notably, that an allegation of knowing participation in a dishonest design is “an allegation the seriousness of which means that it ought to have been pleaded and particularised, and the assessment required by Briginshaw v Briginshaw (1938) 60 CLR 336; [1938] HCA 34 (Briginshaw) kept in mind”.

37. [486]

    Complaint is made in the submissions for Peter Abboud that there has been an intermingling (causing confusion) in the plaintiffs’ case as to the allegations of conspiracy, on the one hand, and of the dishonest and fraudulent Scheme, on the other. Peter Abboud adopts the criticisms made by each of Ivana Cassaniti and the Khalil defendants in respect of the pleaded claims.

38. [487]

    As to the pleaded case against them the Borg Parties broadly adopt and the criticisms made by Ivana Cassaniti and the AKA Parties. They complain as to the impermissible expansion of the plaintiffs’ case, for example, to tie the plaintiffs’ allegations against the Borg Parties with allegations made against others; and say that reliance by the plaintiffs on the “footsteps in the sand” approach should not be allowed.

39. [488]

    It is said that the pleaded case against the Borg Parties in the RCG CBD Proceeding falls within a narrow compass, noting that it is alleged that Borg Family on the one hand and RCG CBD on the other made three back to back payments between late 25 September 2012 and 8 October 2012; and that, separately, Borg Civil Australia made a payment to RCG CBD of $33,000 on 23 May 2013 (RCG CBD third further amended statement of claim at [190]). It is said that the gist of the plaintiffs’ case is that Borg Family entered into, and performed, the transactions complained of “by arrangement with RCG’s director Cassaniti pursuant to the Scheme Recommendation” (at [191]). It is said that Gino Cassaniti’s central role in Borg Family’s alleged misconduct is confirmed in the RCG CBD third further amended statement of claim at [192], where it is alleged that Gino Cassaniti was at all material times acting on behalf of himself and the other primary conspirators. Likewise, it is said that the RCG CBD pleading at [193] expressly identifies Gino Cassaniti as the beneficiary of Borg Family’s conduct. It is said that it is no part of the plaintiffs’ pleaded case (apropos the Borg Parties) that Fred Khalil was, in this context, acting as Gino Cassaniti’s agent or his accessory.

40. [489]

    It is said that the pleaded case in the Bluemine Proceeding is even narrower and concerns only one payment in the amount of $15,000 from Borg Family to Bluemine (Bluemine third further amended statement of claim at [200(a)]). The plaintiffs claim this transaction also took place “by arrangement with” Gino Cassaniti (at [201]). It is claimed that payment was not part of a “genuine commercial transaction”.

41. [490]

    The Borg Parties emphasise that there is no pleading that: Fred Khalil owed either RCG CBD or Bluemine any fiduciary obligations; that Fred Khalil breached any such obligations; or that any of the Borg Parties was knowingly concerned in or assisted Fred Khalil in any of those breaches; nor is there any pleading that Gino Cassaniti dealt with the Borg Parties through Fred Khalil as an intermediary.

42. [491]

    It is said that the case on accessorial liability was even more confined by the plaintiffs’ oral opening, namely that each of the Scheme Participants is liable for knowingly participating in dishonest and fraudulent conduct (i.e., in knowingly assisting Gino Cassaniti in his dishonest and fraudulent conduct to defraud (the Insolvent Company)) and for dishonestly assisting Gino Cassaniti in his breaches of fiduciary duties (T 117). It is said that the opening further limited the plaintiffs’ case in that it was said that the equitable claims in relation to all defendants are for breach of fiduciary duty by the co-conspirators or accessorial involvement as pleaded at [238] and that “whilst we have used expressions of fraud against scheme participants we maintain that but it’s equitable fraud against the scheme participants. We’ve never said a scheme participant was involved in a conspiracy. We’ve said five people are involved in the conspiracy, everybody else has been has engaged in conduct which in equity makes them an accessory to that misconduct. That’s the nature of the case” (T 117; 179-180). The Borg Parties repeat and adopt the submission made at [75] of Ivana Cassaniti’s submissions in relation to the ultimate scope of the plaintiffs’ case.

43. [492]

    Reference is made by the Borg Parties to the obligations of a party alleging serious misconduct as re-stated in Nadinic v Drinkwater (2017) 94 NSWLR 518; [2017] NSWCA 114 (Nadinic) at [45]-[46] per Leeming J (with whom Beazley P, as Her Excellency then was, agreed). It is noted that the need to plead fraud precisely reflects the fundamental requirements for the fair trial of the allegations (see the plurality in Forrest v Australian Securities and Investments Commission (2012) 247 CLR 486; [2012] HCA 39 (Forrest v ASIC) at [25]). The Borg Parties say that a corollary of this that the plaintiffs are bound by their pleaded case; and that, consistently with this: a trial judge is not entitled to decide the case on the basis of fraudulent conduct that had not been alleged or put to the party (Nadinic at [155]); and the seriousness of the finding of fraud does not permit of other than a specific finding that the fraud has in fact occurred (Sgro v Australian Associated Motor Insurers Ltd (2015) 91 NSWLR 325; [2015] NSWCA 262 at [54]).

44. [493]

    It is said that it is not open to the plaintiffs to assert, against the pleading principles referred to above, that the misconduct was perpetrated in a manner not pleaded. It is acknowledged that, in some cases, a judgment need not be precisely within the scope of the “particulars” alleged in a pleading, so long as judgment is given on the causes of action pleaded (Dare v Pulham (1982) 148 CLR 658; [1982] HCA 70 at [6]); and that a fair amount of tolerance can be justified so long as the circumstances are such that all parties to the action have had fair notice of what will be determined (Stefanovski v Digital Central Australia (Assets) Pty Ltd [2018] FCAFC 31 (Stefanovski) at [65]). However, it is said that this tolerance may not be allowed where, as here, a party has indicated that it will hold the other party to its pleaded case (see Stefanovski at [74]). It is said that this reflects the fundamental principle stated by the plurality in Forrest v ASIC.

45. [494]

    The Borg Parties emphasise that the case they have to meet is conditioned upon breaches of duty allegedly committed by Gino Cassaniti, and by him alone. It is said that in a case where liability is in part conditioned upon the conduct of a principal offender, the plaintiffs are bound by their pleadings as to who that offender was and what he or she did; and that the plaintiffs cannot, sub silentio, expand their case by alleging quite separate breaches by another (say, here, Fred Khalil).

46. [495]

    It is said that no unfairness to the plaintiffs arises from this position; noting that Tanya Borg deposed to her dealings with Fred Khalil, and her lack of dealings with Gino Cassaniti, in her affidavit sworn 4 December 2018. Hence, it is submitted that the plaintiffs were put on notice at that time that their pleaded case depended upon their falsifying Tanya Borg’s evidence that she had not dealt with Gino Cassaniti until mid 2014. It is said that, despite this, the plaintiffs did not amend their case by asserting that Fred Khalil was acting in furtherance of the primary conspiracy; and it was not put to Tanya Borg in cross-examination that her evidence as to when she met Gino Cassaniti was false. It is said that no document or other form of objective evidence falsifies what she says in this regard.

47. [496]

    It is noted that on day four of the trial, immediately after the conclusion of the plaintiffs’ oral opening, the Borg Parties made it clear that they would hold the plaintiffs to their pleaded case (see T 177). It is said that at no stage was there any departure from that position, whether by agreement or otherwise (see Stefanovski at [65]) and accordingly, the plaintiffs may not now run a case that is outside the strictures of their pleadings.

48. [497]

    As to the impugned transactions pleaded against the Borg Parties (see [190] of the RCG CBD third further amended statement of claim), the Borg Parties emphasise that, unlike the transactions involving all of the other so-called Scheme Participants, the payments at [190] are only between Borg Family and RCG CBD (and do not involve any other party). The Borg Parties place emphasis on this distinction (and suggest that the concepts of “carousel” payments, “round robin” payments and “in and out payments” are inapt in relation to the impugned transactions as they relate to the Borg Parties).

49. [498]

    Complaint is made that the plaintiffs plead no details of the alleged “arrangement” between the Borg Parties and Gino Cassaniti in relation to the impugned transactions (see at [191] of the Bluemine third further amended statement of claim), the Borg Parties drawing a distinction here between the existence of an arrangement and its alleged connection with the Scheme Recommendation. They say that no evidence of the alleged arrangement has been adduced. (See also at [192] where the “arrangement” allegedly between Borg Family and Gino Cassaniti in furtherance of the primary conspiracy is identified in particular (b) as the primary conspiracy pleaded in [142] and its application to RCG CBD pleaded at [148].)

50. [499]

    As to the particulars of the allegation at [191], (that transactions were “entered into and performed” by Borg Family by “arrangement” with Gino Cassaniti pursuant to the Scheme Recommendation), the Borg Parties say that these are incongruent with the pleaded claim at [190]. First, that particular (b) does not go any further than to say that Gino Cassaniti approved the transactions (i.e., not that his approval was part of the “Scheme Recommendation” or a broader arrangement between Gino Cassaniti and the Borg Parties). Second, that even if the transactions were not genuine (as per particulars (c) and (d)), which is denied by the Borg Parties, what is missing is the exposition of the alleged “arrangement” between Gino Cassaniti and the Borg Parties (or any of them) and the connection between that “arrangement” and the transactions of which complaint is made. The Borg Parties say that those elements are central to the plaintiffs’ claims and that neither is pleaded nor proved.

51. [500]

    As to the allegation at [192] of the RCG CBD third further amended statement of claim that Gino Cassaniti was acting on his own behalf and on behalf of the other “primary conspirators”, as adverted to above, the Borg Parties note that there is no pleading that Fred Khalil was acting on behalf of Gino Cassaniti (relevant in circumstances where there is a lack of evidence of dealings with Gino Cassaniti himself) (and they note that the pleading at [239] is limited in scope and directed, insofar as the Borg Parties are concerned, to the preparation or lodgement of tax returns).

52. [501]

    It is said by the Borg Parties that, even if the claims made by the plaintiffs as to involvement by the Borg Parties in any conspiracy had subsisted, the allegation in particular (b) to [192] fails because there is no evidence that there was any such arrangement between Gino Cassaniti and Borg Family (or any other one of the Borg Parties) (noting that the plaintiffs here seek inferences to be drawn to that effect).

53. [502]

    Finally, complaint is made that at [193] it is alleged that, by implementing the Scheme Recommendation (noting that there is no pleading as to how the Scheme Recommendation was implemented by Borg Family and Borg Civil Australia other than [190]) and by entering into any “arrangement” with Gino Cassaniti, Borg Family and Borg Civil “knowingly participated” in “dishonest and fraudulent conduct” and “knowingly assisted” Gino Cassaniti in “dishonest and fraudulent conduct”.

54. [503]

    Insofar as [232] of the RCG CBD third further amended statement of claim pleads both participation and assistance in relation to the conspiracy to defraud and the alleged breaches by Gino Cassaniti of his fiduciary obligations, the Borg Parties say that the former cannot subsist given that the plaintiffs do not contend that Gino Cassaniti either directly dealt with the Borg Parties or did so through an agent. (Pausing here, knowing assistance in relation to a conspiracy need not necessarily be directly with the relevant conspirator – here Gino Cassaniti. The more relevant complaint seems to be that there was no advice given by Gino Cassaniti to the Borg Parties, which goes to their knowledge of the alleged Scheme.) As to the pleading in relation to knowledge or assistance (see at [236] and [238]) complaint is made that there is no proper articulation of the knowledge that it is alleged that each of the Borg Parties had. It is noted that the RCG CBD pleading at [240] was superseded by the plaintiffs’ oral opening.

55. [504]

    The Borg Parties say that, it appears from the plaintiffs’ submissions that only the allegation at [255(b)] (that the payments by RCG CBD to Borg Family amounting to $580,000 occurred without RCG CBD’s authorisation) of the RCG CBD pleading is now pressed.

56. [505]

    Insofar as the pleadings as to the conspiracy and the Scheme Recommendation (as against the Borg Parties) rest on the allegation that RCG CBD received “income”, which was then disbursed leaving it unable to pay its tax obligations, the Borg Parties say that the RCG CBD third further amended statement of claim is silent as to how any of the moneys received by RCG CBD, especially from Borg Family or Borg Civil, constituted “income” in its hands and that there is no evidence to demonstrate that this was the case. Insofar as the Commissioner (or RCG CBD) may have treated the transfers to RCG CBD as income does not, the Borg Parties say, make that the case for present purposes (especially, it is said, because the Borg Parties have no standing to challenge or otherwise object to the default assessments).

57. [506]

    The Borg Parties note that it is pleaded in the RCG CBD third further amended statement of claim (at [145]-[147]) that RCG CBD was utilised by all of the Primary Conspirators (including Fred Khalil) as a vehicle for the primary conspiracy; and that the Scheme Recommendation as pleaded at [148] involves a number of different groupings of parties (the Scheme Participants, including all of the Borg Parties (see at [123]-[126]); the Receiving Participants, including Borg Family; and the Paying Participants, including Borg Family and Borg Civil Australia). It is noted that, uniquely, Borg Family is both a Paying Participant and a Receiving Participant.

58. [507]

    The Borg Parties say that the discrete transactions (the payments of $33,000 and $15,000) cannot sensibly be said to fit the Scheme Recommendation or the primary conspiracy, given that, as to the first, there is no repayment of those moneys; and as to the second, the payment was to Bluemine for a truck Borg Family purchased.

59. [508]

    Insofar as the pleading asserts that entry into certain transactions (identified at [148(b)-(c)] of the RCG CBD pleading) would permit the reduction of taxable income and/or otherwise benefit the Scheme Participants, the Borg Parties emphasise that Borg Family lodged its BAS on the accrual basis. It is said that there is, therefore, a disconnect between the Scheme Recommendation, as pleaded, and the nature of Borg Family’s accounting. It is said that, on an accrual basis, the claiming of GST credits could not, and would not, be conditioned upon the making of any payments to RCG CBD; and hence, that the payments between RCG CBD and Borg Family were unnecessary for the latter to claim its deductions. Further, it is said that any transfers to or from RCG CBD could not possibly bear any causal connection between the alleged breaches by Gino Cassaniti of his obligations and any benefit or gain to the Borg Parties.

60. [509]

    The Borg Parties emphasise that the RCG CBD pleading at [148(a)] is that each of the Primary Conspirators, including Fred Khalil, represented to the Borg Parties that RCG CBD was incorporated and utilised at least by them. It is said by the Borg Parties that that positive allegation of fact (which is not expressed as an alternative to the other sub-paragraphs of [148]) is inconsistent with the allegations in the plaintiffs’ RCG CBD reply to the effect that Fred Khalil had no authority from RCG CBD to enter into the arrangement pleaded in the RCG CBD defence.

61. [510]

    In any event, the Borg Parties say that if moneys were transferred to RCG CBD from Borg Family based on representations from a person who had no authority to make them, then those moneys ought to have been returned to Borg Family because RCG CBD had no right to keep them. It is said that, for as long as RCG CBD had those moneys in its possession, it held them on trust for Borg Family.

62. [511]

    As to the allegations in [148(a)] to [148(k)] of the RCG CBD third further amended statement of claim, the Borg Parties say that they fall into two groups: first, the allegations that involve RCG CBD issuing allegedly false invoices (see [148](c), (d), (e), (g) and (h)), none of which allegations, it is said, can apply to any of the Borg Parties because there has never been any claim that RCG CBD issued any invoices to Borg Family; and, second, the allegations in [148](a), part of (b), (f), and (i) to (k), which it is said are more narrow in scope and may apply to the Borg Parties. It is again noted that there has never been any allegation that the Borg Parties issued any “false” or “fictitious” tax invoices or were otherwise party to any “invoicing” arrangements (as described in the plaintiffs’ submissions at, for example, [243], [478], [489], [705]).

63. [512]

    The Borg Parties say that the allegations in the plaintiffs’ submissions of falsity as to the issuing of RCTIs are ambiguous because it is unclear whether they are contentions as to the authenticity of the documents or whether they are new factual contentions to the effect that the issuing of RCTIs by Borg Family was an indicium of the so-called Scheme Representation. It is said that if these contentions are evidentiary, then they fail because the plaintiffs have never challenged the authenticity of those documents; whereas if they are posited as a new indicium of the Scheme Recommendation, then they should be rejected because they have never been pleaded. Indeed, Mr Afshar, appearing for the Borg Parties, criticised the pleadings during the hearing on the basis that the allegations made by the plaintiffs in opening submissions (see T 131) of falsely created invoices and Borg Family not lawfully being able to issue RCTIs were not pleaded (T 177).

64. [513]

    Finally, insofar as there is reference in the plaintiffs’ submissions (at [872]) to what is said to be a “Vehicle Scheme”, the Borg Parties point out that this is a term not defined in the pleadings (nor in the plaintiffs’ submissions).

65. [514]

    Gino Cassaniti adopts the submissions on pleadings made by the other defendants.

66. [515]

    In response to the defendants’ contentions as to adequacy of the pleadings and inconsistencies in the pleadings, in their closing submissions the plaintiffs confirm that the primary cause of action pleaded against each defendant (accessory) is that the fiduciary, acting dishonestly, was in breach of fiduciary duty; and that the accessory knowingly assisted in that breach (i.e., a second limb Barnes v Addy claim) (not a first limb Barnes v Addy claim), pointing by way of example to the pleading in the Bluemine third further amended statement at [239]-[242] (extracted above).

67. [516]

    The plaintiffs say that the whole of the pleading before [239] is of facts that the plaintiffs contend against each defendant. It is said that it was made plain in opening that the pleadings were directed at defendants in respect of the specific transactions in which they were involved. The plaintiffs say that the issue now is simply whether those causes of action have been made out on the evidence and within the pleaded causes of action, particulars, openings and conduct of the trial (i.e., not whether the plaintiffs have established every fact in their pleading; rather, whether the plaintiffs have established sufficient facts).

68. [517]

    By way of example, the plaintiffs refer to [242], the thrust of which they say is the participation by Scheme Participants in the respective transactions referable to each of the Scheme Participants. It is said that, if participation is established on the evidence, then that is proof of sufficient essential facts to enliven the cause of action, whether or not the plaintiffs have established a Scheme Recommendation or its implementation. Reference is made in this context to what was said in Hasler v Singtel Optus Pty Ltd (2014) 87 NSWLR 609; [2014] NSWCA 266 (Hasler v Singtel Optus) as to the elements required to prove a claim based on the second limb of Barnes v Addy (and to Lewis Securities v Carter per Emmett AJA at [185]-[186]). The plaintiffs point out that in Hasler v Singtel Optus there was no pleaded contention that the fiduciary’s conduct was dishonest and fraudulent (at [38]) nor was this contended in the plaintiff’s opening or in the statement of real issues in dispute given to the primary judge (see the reasons at [45]); and that it was not until final addresses that such a contention was raised ([48]); but nevertheless, the primary judge held that the plaintiff succeeded against an accessory on the second limb of Barnes v Addy (and that finding was upheld on appeal, referring to what was said by Leeming JA (with whom Barrett and Gleeson JJA agreed) from [38]ff; and at [49]-[52]). The plaintiffs also refer to Leeming JA’s reasons (at [130]-[131], [139]) as to the requisite knowledge of a party against whom a second limb Barnes v Addy claim is made, noting his Honour’s observation at [75] that equity intervenes to hold liable a third party who “merely assists” a breach of fiduciary duty (with the requisite knowledge) “in order to deter conduct which directly undermines the high standards required of fiduciaries”.

69. [518]

    The plaintiffs say that the defendants’ submissions in the present Proceedings have erroneously sought to elevate pleadings to the equivalent of a mathematical equation; and have then contended for the plaintiffs’ failure to prove all that has been pleaded against them. Reference is made to HIH Insurance Ltd (in liq) v Adler [2007] NSWSC 633 (HIH v Adler) at [50]-[51] per Einstein J for the proposition that it is not necessary (for a finding of knowing involvement in a contravention) that the accessory have knowledge of the contravenor’s intentions and every aspect of the contravention; rather, there need only be knowledge of the essential facts.

70. [519]

    The plaintiffs here say that the pleadings have identified for the defendants the full factual case that is alleged against each of them, respectively. It is submitted that (upon consideration of the pleadings, opening and conduct of the trial) all accessory defendants must have understood that they faced a second limb Barnes v Addy case; and hence, that the issue now is whether the plaintiffs proved: a breach of fiduciary duty; a dishonest and fraudulent design by the fiduciary; participation in that misconduct by the relevant defendant (whilst not inducing it or procuring it), i.e., that the defendant’s activities show that the defendant assisted in, or facilitated, or furthered, that breach; and the defendant’s knowledge of the misconduct within one of the four Baden Delvaux categories of knowledge as stated in Farah Constructions (see Hasler v Singtel Optus at [130]). Reliance is placed in particular on what was said by Leeming JA in Hasler v Singtel Optus at [139], namely that on conventional principles liability arises “without more” (original emphasis) than circumstances where the third party accessory knows the “essential facts” constituting what is a prima facie dishonest breach of duty by the fiduciary in which the they are participating “without more” (original emphasis) because the defendant has “studiously” avoided making such enquiries as an honest and reasonable person would and/or has wilfully shut his or her eyes to the obvious.

71. [520]

    As to Ivana Cassaniti’s submission at [27] in relation to the plaintiffs’ pleaded case, and in answer to the various defendants’ attribution of knowledge point, the plaintiffs rely on Beach Petroleum NL v Johnson (1993) 115 ALR 411; [1993] 43 FCR 1 (Beach Petroleum) at 574 per von Doussa J; namely, that the knowledge of a person is not imputed to a corporation where that person’s knowledge is an element of his or her fraud against the corporation (Beach Petroleum NL v Abbott Tout Russell Kennedy (1999) 48 NSWLR 1; [1999] NSWCA 408 (Beach Petroleum v Abbott Tout)). It is noted that in Aequitas Ltd v AEFC Leasing Pty Ltd [2001] NSWSC 14; (2001) 19 ACLC 1,006 at [306], Austin J stated that the criteria of fraud in Beach Petroleum is capable of including equitable fraud arising out of breach of duty, at least where the fiduciary’s conduct is morally reprehensible.

72. [521]

    Regarding Givana Prestige and Discobell, the plaintiffs maintain that the fiduciary’s breaches of duty were as pleaded in the respective pleadings (Diamondwish second further amended statement of claim; Rackforce third further amended statement of claim).

73. [522]

    It is noted that at [186] of the Diamondwish pleading (wherein Frank Criniti is the relevant fiduciary), the duties pleaded included: the duty not to permit the interests of others to conflict with the interests of Diamondwish; the duty not to allow the fiduciary’s duties to Diamondwish to conflict with his own interests with interests of others; and the duty not to allow dissipation of Diamondwish’s assets, other than for genuine commercial obligations. At [187], breaches of those duties are pleaded; for example: causing or permitting Diamondwish to enter into the transactions; causing or permitting Diamondwish’s assets to be dissipated without any genuine commercial obligation to do so. At [188] it is pleaded that the fiduciary’s breaches were dishonest and fraudulent.

74. [523]

    Similar allegations are made in the Rackforce Proceeding (see at [95]-[97]). There are similar allegations pleaded in the Bluemine Proceeding.

Procedural issues – Applications for amendment of defences

1. [524]

   The hearing commenced on 3 February 2020. During the course of the hearing, the defendants made two separate sets of amendment applications: first, applications to amend their defences to raise issues of causation and a failure to mitigate (the causation/mitigation defences); and second, applications to raise a plea based on the import of the releases granted to particular defendants (or, in the case of Andrew Barsa, the apparent abandonment of claims against a defendant) (the joint release defences).

2. [525]

   As to the applications to amend defences to plead causation/mitigation, the impetus for this came with an application made on 11 February 2020 by the AKA Parties (then followed by similar applications by the other defendants) for leave to rely upon amended defences. The proposed amendments were to the effect, first (the causation defence), that the plaintiffs (and not the AKA Parties) had caused any loss arising from the taxation debts assessed against the Insolvent Companies by, in effect, the liquidator failing or refusing to take any steps towards lodging tax returns or objecting to the default assessments under Pt IVC of the Taxation Administration Act (a course then open in relation to the lodgment of objections until at least 24 November 2020, that being four years from the date of the default assessments); and, second, that the plaintiffs had failed to mitigate their loss (the mitigation defence) and that the plaintiffs are otherwise disentitled from recovering any loss on equitable grounds. The same particulars were relied upon for both the proposed causation and mitigation defence.

3. [526]

   It was said that the causation argument turned on the bifurcated nature of tax recovery as against contesting an assessment (the AKA Parties here citing Federal Commissioner of Taxation v Futuris Corporation Ltd (2008) 237 CLR 146; [2008] HCA 32 (Futuris)). I consider this in more detail in due course. However, in essence, what is said is that until a challenge to the assessment has been abandoned or finally determined it must be considered by the Commissioner that the causal link between the Scheme alleged in the present proceeding and the alleged loss has been broken by the failure of the liquidator to object to the assessments. (Pausing here, ultimately it seemed to me that this was an argument about failure to mitigate; not about causation per se.)

4. [527]

   (A further amendment was also sought by the AKA Parties by way of a contingent claim to any funds recoverable by Bluemine from the AKA Parties (the contingent defence) but it is not necessary here to address this.)

5. [528]

   The AKA Parties contended that there had been no delay in raising those defences, having regard to the fact that, on 12 February 2019, Rees J had made orders by consent to the effect that the AKA Parties were not required to plead to certain matters. The relevant orders made on 12 February 2019 included the following:

6. [529]

   The context in which the consent orders were made on 12 February 2019 was that the AKA Parties had filed (on 2 September 2018) an amended interlocutory process in the Bluemine Proceeding, seeking orders, inter alia, that: the 20th defendant (Andre Abou-Antoun) and the 21st defendant (Michael Abou-Antoun) in the Bluemine Proceeding be excused from pleading to particular specified paragraphs of the further amended statement of claim; and that the 3rd, 4th, 5th, 23rd and 24th defendants (the AKA Parties which were the corporate defendants) be excused from pleading to any paragraphs of the plaintiffs’ further amended statement of claim that would incriminate Andre and Michael Abou-Antoun. Similar orders were sought in relation to the Earth Civil Proceeding.

7. [530]

   The AKA Parties maintained that, on a proper construction of the 12 February 2019 consent orders, each of the proposed defences fell within the ambit of those consent orders. They submitted that, even if wrong on the proper construction of the 12 February 2019 consent orders, there was no relevant delay in circumstances where their opening submissions, filed and served on the plaintiffs on 5 December 2019, foreshadowed the possibility that they would choose to run a positive case after close of the plaintiffs’ case.

8. [531]

   In essence, the AKA Parties contended (and said this was the basis on which the consent orders were made by Rees J) that the ordinary requirements that the AKA Parties positively plead to matters pleaded by the plaintiffs in the Proceedings had been dispensed with in each of the Proceedings on the basis of the privilege against self-incrimination. It was submitted that, consistent with authorities where leave has been granted to defendants to withhold expressing a positive defence on the grounds of self-incrimination privilege, any prejudice to the plaintiffs was alleviated by way of leave to adduce evidence in reply (and it was said that this was an incident of procedure where self-incrimination privilege arises on the pleadings).

9. [532]

   The AKA Parties maintained that amendment of the defences to include such defences would not require the hearing dates to be vacated; rather, that the plaintiffs could continue their case unimpeded and then adduce any necessary evidence in a case in reply.

10. [533]

    In the course of submissions, Counsel for the AKA Parties accepted that no claim for failure to mitigate had been pleaded (T 213); and quite fairly accepted that such a pleading would not have offended against any self-incrimination privilege (T 219). Counsel for the AKA Parties confirmed that they did not run a “positive case” that the impugned transactions were genuine (T 219).

11. [534]

    Ultimately, the submission of the AKA Parties was that they were not required to plead to the causation issue until the close of the plaintiffs’ case but they accepted that the position was not the same as to a failure to mitigate argument (see T 215-217).

12. [535]

    Various of the defendants indicated their intention to make similar applications (see at T 230-231, Counsel for the Borg Parties also foreshadowed seeking leave to amend in relation to causation).

13. [536]

    When the application for amendment to plead the causation/mitigation defences was argued at the hearing, complaint was made for the plaintiffs that none of the defendants had pleaded that the liquidator ought to have considered whether or not to appeal or object to the assessments; and raised an issue of procedural fairness in this regard (see at T 293-294).

14. [537]

    The plaintiffs argued that, for the liquidator to mount a challenge to the assessments, the liquidator would have to demonstrate that all of the transactions were shams (see T 218) in circumstances where the defence of those who advocated for a challenge was that the transactions were not a sham. It was said that, on the application for the appointment of a special purpose liquidator before Black J, his Honour had considered that it was an impossible position to assess the prospects of such a challenge to the assessments where the persons who have the knowledge of whether circumstances existed for such a challenge are denying that those circumstances exist (T 218).

15. [538]

    Counsel for the AKA Parties maintained that they do not have to show the transactions a sham in order to establish the basis for an objection; rather, it was submitted that the Commissioner has the requisite information and that under s 166 of the legislation is bound to use all information in determining the objection (T 218). That, however, seems to me to conflate whether a causation/mitigation defence would be established, not whether it should be permitted to be run at the stage of the hearing at which it was first raised. Indeed, in the course of argument, Counsel for the AKA Parties agreed that it would be incumbent on them, if the causation/mitigation defences were allowed to be pleaded, to prove on the balance of probabilities that, had an objection been lodged, it would have been allowed under s 14ZY(1A) of the Taxation Administration Act (T 427).

16. [539]

    Further, in relation to the significance of the application that had unsuccessfully been made to Black J for the appointment of a special purpose liquidator, various of the defendants noted that they had not been privy to (or in some cases aware of) that application.

17. [540]

    There was debate during the hearing as to the pleading deficiencies perceived by the plaintiffs in the proposed amended defences dealing with the causation/mitigation issues and, for the reasons discussed in the course of submissions, I considered that those had considerable force.

18. [541]

    Ultimately, I accepted that, insofar as the defences (and not all did) contained a denial on the issue of causation of loss, then I would permit an amendment of the defences to plead (subject to the pleading issues raised in argument) the facts on which that denial was based but I was not prepared to give leave at the by then late stage of the matter to permit the mitigation defence to be raised. That was in circumstances where no positive defence of that kind had previously been foreshadowed (see, for example, what was said in Anderson v ASIC (2012) 297 ALR 546; [2012] QCA 301 by the Court of Appeal in Queensland (McMurdo J, with whom Holmes JA, as her Honour then was, and White JA agreed), dealing with a claim for common law privilege (at [37]), as to the provision of at least a skeleton indication of what is intended to be pleaded.

19. [542]

    It seemed to me that notification to the liquidator of the positive case that a defendant was reserving its position to bring at the close of the plaintiffs’ case (while in the interim maintaining the privilege against self-incrimination) would avoid an ambush in that regard (at least if accompanied by an articulation of the facts on which such a case might be run).

20. [543]

    I was not prepared to allow the amended pleading of the causation defence in the form in which it had been provided; and I was not prepared to allow the mitigation defence in circumstances where that could have been pleaded at a much earlier stage without infringing the privilege against self-incrimination. I accepted the liquidator’s submission that to run such a case at the stage it was raised would require an adjournment to allow the liquidator to meet that newly raised factual case.

21. [544]

    In that context, I had regard to the principles in Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; [2009] HCA 27 as to amendment of pleadings (including that costs are not a panacea for all ills – see at [99]) and to the admonition by the High Court in UBS AG v Tyne (2018) 265 CLR 77; [2018] HCA 45 as to the public interest in the due administration of justice; and the numerous decisions that have made clear that one does not litigate by ambush (see for example White v Overland [2001] FCA 1333; Australian Securities and Investments Commission v Rich (2009) 236 FLR 1; [2009] NSWSC 1229 (ASIC v Rich) at [168]-[169] per Austin J) and the statutory overriding purpose of the just, quick and cheap resolution of the real issues in dispute (see s 56 of the Civil Procedure Act 2005 (NSW) (Civil Procedure Act)) noting that the matter had been set down in April 2019 for an eight week hearing commencing in February 2020.

22. [545]

    As to the distinction between a plea of failure to mitigate and a denial of causation of loss, I add the following to the oral observations I made during the course of debate on the amendment application insofar as it related to the mitigation defence.

23. [546]

    It is well understood, when taking into account the assessment of damages that a failure to mitigate ensures the defendant is only liable for the portion of the plaintiff’s loss caused by the defendant’s breach (see Chand v Commonwealth Bank of Australia [2015] NSWCA 181 (Chand) at [181]; Sotiros Shipping Inc and Aeco Maritime SA v Sameiet Solholt [1983] 1 Lloyd’s Rep 605 (The Soholt)).

24. [547]

    At first instance in Chand, Robb J had noted (in obiter) that the standard of conduct required by the plaintiff following the defendant’s breach was the same whether it was approached as a question of causation (novus actus interveniens) or mitigation, being a standard of reasonableness (Chand v Commonwealth Bank of Australia [2014] NSWSC 708 at [389]; Chand at [58]). Whether the issue is dealt with as a novus actus interveniens or as a failure to mitigate may impact how damages are assessed (see Halsbury’s Laws of Australia, vol 135, at [25], [740]). A novus actus interveniens limits the plaintiff to a recovery of nominal damages; whereas a failure to mitigate results in a reduction of damages.

25. [548]

    As I noted in Chand, in Koch Marine Inc v D’Amica Societa di Navigazione ARL [1980] 1 Lloyd’s Rep 75, Goff J characterised three aspects of mitigation (non-recovery for avoidable loss; recovery for loss incurred in reasonable attempts to avoid loss; and non-recovery for avoided loss), all as ultimately aspects of the principle of causation. In Chand, without addressing that proposition, it was concluded that the defendant’s liability for prospective loss was correctly analysed by, first, considering whether a breach caused a particular loss and, second, addressing whether there had been a failure to mitigate (see Chand at [184]) (reference being there made to the order in which it is suggested such issues should fall for consideration in H McGregor, McGregor on Damages (19th ed 2014, Sweet & Maxwell) at [6–013]). If, as a matter of legal rather than factual causation, no loss has been caused by the relevant breach (such as where the sole effective cause was found to be some other act or event) then the question of mitigation would not arise.

26. [549]

    That illustrates the need to plead the positive facts relied upon for a failure to mitigate defence. In circumstances where such a pleading had not here been addressed by the respective defendants (and where there would have been procedural unfairness for it to be raised at the stage that the issue was eventually canvassed), I refused leave to amend to plead a failure to mitigate (as opposed to the existing causation argument – since that went to the fact of what had or had not happened not the reasonableness of the liquidator’s conduct in that regard).

27. [550]

    Ultimately, therefore, I gave leave for the filing of the amended defence limited to the allegations in relation to [25] and directing that that be filed and that there be provision of particulars by close of business on 17 February 2020 (T 450). I made it clear that, insofar as the position of the AKA parties in relation to the non‑pleading of a positive case of failure to mitigate was based on a concern that this would impinge upon the privilege against self‑incrimination, the dismissal of the application for leave to amend would not preclude the raising of the making of an application at the close of the plaintiffs’ case in relation to any matter that it is said could not have been pleaded without impinging upon the privilege against self‑incrimination. In that regard, I gave leave to the AKA parties to amend their defence in order to contain a contingent pleading by which causation is denied.

28. [551]

    As to the second set of amendment applications, the impetus for this came from an application by Ivana Cassaniti, after she had retained Mr Cook SC to act in the Proceedings.

29. [552]

    The context in which this application arose was that, on 30 June 2017, 27 August 2018, 3 October 2018 and in December 2018, the plaintiffs entered into a number of Deeds of Settlement and Release with various defendants in the Bluemine Proceeding, including defendants alleged to have been Scheme Participants (the Bluemine Deeds) (see Ex 28). Pursuant to the Bluemine Deeds, moneys were paid and notices of discontinuance or consent orders for the dismissal of the Proceedings have been filed in respect of the relevant defendants.

30. [553]

    On 19 February 2019, Stevenson J delivered judgment in Edgewater Homes (see below).

31. [554]

    On 10 April 2019, the plaintiffs entered into a further Bluemine Deed with another Scheme Participant (Laurance Abou-Antoun), pursuant to which moneys were paid and a notice of discontinuance was filed.

32. [555]

    In January 2020, Gino Cassaniti issued a notice to produce for inspection seeking the production by the plaintiffs of, inter alia, deeds relating to settlements with defendants in each of the five Proceedings, including the Bluemine Proceeding (see T 22.13). Ivana Cassaniti also sought inspection of the settlement deeds by issuing a notice to produce on 16 January 2020. The plaintiffs resisted the production of those deeds, including by challenging the relevance of the request and by claiming privilege against production.

33. [556]

    On 29 January 2020, the plaintiffs filed a notice of motion seeking to set aside, inter alia, parts of a notice to produce seeking confidential settlement deeds.

34. [557]

    On 3 February 2020, at the commencement of the hearing, after debate as to the application to set aside the notice to produce, directions were made that documents in answer to Gino Cassaniti’s notice to produce in relation to the settlement deeds be produced into court at 9 am on 7 February 2020 and that access to those documents be restricted, subject to further order, to the legal representatives for the defendants (T 21.35-22.19).

35. [558]

    On 20 March 2020, as adverted to above, Senior Counsel for Ivana Cassaniti (who had only inspected the deeds of release that day) raised in Court the issue as to the import of the release of joint and several liability by reference to the Edgewater Homes decision and foreshadowed an application for leave to amend Ivana Cassaniti’s defence to plead that she had been released of her alleged liability to the plaintiffs by reason of a deed of release entered into by the plaintiffs (on the basis of the principles discussed in Edgewater Homes – see T 1430 onwards).

36. [559]

    That led to a cascade of similar applications, each of which was opposed by the plaintiffs. Among other things, the plaintiffs argued that the ratio of Edgewater Homes is not that the liability of a fiduciary and an accessory is joint and several and that, therefore, release of one releases them all; noting that his Honour expressly said (at [32]) that it was not necessary to resolve that “vexed question”. Further, insofar as his Honour went on (at [32]-[36]) to consider and then apply the so-called “acting in concert” exception (to the general rule that release of one whose liability is joint and several releases all) as expounded in Grimaldi v Chameleon Mining NL (No 2) (2012) 200 FCR 296; [2012] FCAFC 6 (Grimaldi v Chameleon Mining), the plaintiffs contended that for the defendants to rely on this it would be necessary for them to plead (which the proposed amended defences did not do) facts and circumstances giving rise to the exception and that this would amount to an impermissible pleading of contradictory facts and (given the way in which the defences had been conducted to date) would amount to an attempt both to approbate and reprobate. It was said that, in light of the pleaded denial of conduct amounting to the alleged conspiracy, this would be impermissible (reference being made to r 14.18 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) and to Issitch v Worrell (2000) 172 ALR 586; [2000] FCA 477 at [32] per Drummond J (with whom Spender and Katz JJ agreed)). (The defendants denied that the proposed amended pleading required them to do so.)

37. [560]

    After the filing of affidavits from the respective legal representatives for the defendants as to the circumstances in which the application was made (in effect that they only became aware of the Edgewater Homes decision after it was brought to their attention by Mr Cook SC) and after cross-examination of those legal representatives, I granted leave for the amendment application.

38. [561]

    I did so, in summary, for the following reasons.

39. [562]

    I accepted that there had been no deliberate delay in the making of the application to raise such defences and that an explanation had been proffered by the respective legal representatives for the fact that the defence had not been raised earlier. I considered that it was, other than perhaps as to the abandonment argument in relation to Andrew Barsa, solely a question of law (and any prejudice in the issue being raised late could be met by time for evidence in response) and that it was in the interests of justice that the defence be able to be raised because, if successful, it would mean in effect that the defendants were being prosecuted for a claim from which they had been released as a matter of law; and that any judgment against them in those circumstances would be a miscarriage of justice.

40. [563]

    I accepted that the factual basis of the defence was of narrow compass (limited to the Settlement Deeds and perhaps the communications in relation to the proposed claim against Andrew Barsa); and the defendants said that no further evidence would be introduced to support the defence, save for the tender of the deeds themselves (and any evidence that the plaintiffs may seek to adduce to prove that the releases have not become operative – liberty in that regard was exercised by the plaintiffs and I read, over the objection of Counsel for Ivana Cassaniti, the affidavit of Mr Narayan explaining the circumstances in which the claim was ultimately not pressed against Andrew Barsa, though he had been named as a defendant in the Bluemine Proceeding). It was noted that the legal argument might be complex but that such complexity would have existed had the defence been raised earlier.

41. [564]

    As to costs, it was generally accepted that if the amendment were allowed, then the ordinary consequence would follow that the defendants should pay the costs thrown away by the amendment. (Ivana Cassaniti foreshadowed an application for a different order were it to be the case that the plaintiffs were not unaware of the possible application of the principle in Edgewater to these Proceedings before 20 March 2020, in which case it was said that she would argue that the plaintiffs should be ordered to pay costs and on the indemnity scale. I did not entertain that application; not least because there was no basis to form the view that any forensic decision of the kind such an application appeared to contemplate had been made.) Otherwise, it was said that, apart from the costs of the application to amend, which if unsuccessfully opposed by the plaintiffs should be borne by the plaintiffs (Bendigo and Adelaide Bank Ltd v Russo (No 3) [2017] NSWSC 566 at [21]-[24] per Bellew J), it was not apparent what costs might have been wasted.

42. [565]

    Ultimately, I reserved the question of costs in the orders dated 2 April 2020 which granted leave to the defendants to file amended defences to include the joint release defence.

43. [566]

    I consider below the merits of the causation and joint release defences.

44. [567]

    Jones v Dunkel inferences are here sought to be drawn in the context where the Primary Conspirators) have not made themselves available for cross-examination and have not explained matters peculiarly within their knowledge in their affidavit evidence, and, in the case of various other defendants, where they have not given an explanation of matters otherwise within their knowledge. It is to be noted that this is in the context of Proceedings involving allegations of equitable fraud and dishonesty (and where various of the witnesses who did make themselves available for cross-examination sought and obtained certificates under s 128 of the Evidence Act to preserve privilege against self-incrimination).

45. [568]

    One of the rationales for the drawing of a Jones v Dunkel inference in a civil trial is that, where there is a reasonable expectation that a party will give or call relevant evidence, it is open to conclude that the failure of a party or someone in that party’s “camp” to give such evidence leads rationally to an inference that the evidence would not assist the party’s case (see RPS v R (2000) 199 CLR 620; [2000] HCA 3 (RPS v R) at [26] per Gaudron ACJ, Gummow, Kirby and Hayne JJ); whereas it is recognised that “it will seldom, if ever be reasonable to expect that the accused in a criminal trial would be expected to give evidence” (RPS v R at [27]) (for reasons of prosecutorial burden and a presumption of innocence). Hence, a Jones v Dunkel inference is generally not available in a criminal trial.

46. [569]

    This distinction between civil proceedings and criminal trials in this regard continues to hold even in civil proceedings involving serious allegations such as to attract the considerations adverted to in Briginshaw and s 140(2) of the Evidence Act.

47. [570]

    This issue has most commonly arisen in civil penalty proceedings. In Adler v Australian Securities and Investments Commission (2003) 179 FLR 1; [2003] NSWCA 131 (Adler v ASIC), Giles JA (with whom Mason P and Beazley JA, as Her Excellency then was, agreed), noting that proceedings for civil penalties do not share the same fundamental features as a criminal trial (see at [658]), concluded (at [660]-[661]) that it was open for Jones v Dunkel inferences to be drawn in civil penalty proceedings. See also Adams v Director of Fair Work Building Industry Inspectorate (2017) 258 FCR 257; [2017] FCAFC 228 at [147] per North, Dowsett and Rares JJ. There is no reason in principle why that reasoning ought not apply to civil proceedings in which fraud or equitable fraud is alleged (and see the obiter observations of Rein J in Hudak v Adams (2013) 17 BPR 32,289; [2013] NSWSC 1464 in this regard).

48. [571]

    No adverse inference may be drawn from a claim of privilege (see Wentworth v Lloyd (1864) 10 HL Cas 589; 11 ER 1154). However, there is a distinction between a failure to answer a question upon the invocation of privilege, and a failure to adduce evidence at all. Lee J adverted to that distinction in Pappas v New World Oil Developments (1993) 43 FCR 594 at 595, when noting that:

49. [572]

    That distinction was later adopted by Warren J (as her Honour then was) in Australian Securities and Investments Commission v ABC Fund Managers Ltd (2001) 39 ACSR 443; [2001] VSC 383 (ASIC v ABC Fund Managers) at [109] and by Sackar J in Sturt v Farran (Bishop of Newcastle) [2012] NSWSC 400 at [383]. Similarly, the Court of Appeal of Victoria (Redlich, Santamaria and Kyrou JJA) in Chong & Neale v CC Containers Pty Ltd (2015) 49 VR 402; [2015] VSCA 137 (Chong), referring to both of those authorities, framed the distinction thus at [218]:

50. [573]

    In Patrick Stevedores Holdings Pty Ltd v Construction, Forestry, Maritime, Mining and Energy Union (2019) 286 IR 52; [2019] FCA 451, Lee J referred to the Court of Appeal’s decision in Chong. His Honour noted that, in Chong, the party that had not given evidence had made an express claim to the privilege against self-incrimination (and the penalty privilege). Whilst there was no express claim for privilege in the case that was before Lee J, his Honour explained that this was “not really to the point” (at [22]). Referring again to Chong, his Honour concluded (at [24]) that:

51. [574]

    From the above authorities it can therefore be seen that: first, there is a recognition of the basal rule that no adverse inference can be drawn from a refusal to answer a question where the reason for that refusal is an invocation of the privilege against self-incrimination; second, that there is a distinction between such a case and where there is a failure to adduce evidence on a particular issue (an inference may be drawn that such evidence would not have assisted the party’s case, even though it might be supposed that the reason for the failure was likely that the evidence might tend to incriminate the party); and, third, that the distinction continues to apply where the party has failed to give any evidence at all.

52. [575]

    Of course, the mere fact that a Jones v Dunkel inference may be available in cases where fraud is alleged, does not necessarily mean that such an inference should be drawn in any particular case (see, as illustrative of that proposition, Stevenson J’s decision in Poole v Chubb Insurance Co of Australia Ltd [2014] NSWSC 1832 at [99]).

53. [576]

    The plaintiffs here emphasise that the relevant facts are peculiarly within the knowledge of the relevant defendants or that the defendants have greater means to produce evidence relating to those facts. In those circumstances, they emphasise what was said by Gleeson J in BCI Finances v Binetter at [122]-[132]; the plaintiffs here invoking the evidential burden or onus of adducing evidence there arising to which reference was made in Krstic v Brindley [2006] NSWSC 1414 (Krstic v Brindley) at [26] per Campbell J. Gleeson J also referred in that regard, among other authorities, to Hampton Court Ltd v Crooks (1957) 97 CLR 367; [1957] HCA 28 (Hampton Court v Crooks) at 375; Tyco Australia Pty Ltd v Optus Networks Pty Ltd [2004] NSWCA 333 (Tyco Australia v Optus Networks) at [121] per Handley JA; Parker v Paton (1941) 41 SR (NSW) 237 (Parker v Paton) at 243; Ex parte Ferguson; Re Alexander (1944) 45 SR (NSW) 64 (Ex parte Ferguson) at 67, 70; United Group Resources Pty Ltd v Calabro (No 5) (2011) 198 FCR 514; [2011] FCA 1408 at [75]-[76] per McKerracher J.

54. [577]

    The plaintiffs also here invoke the principles of evidence to which Gillard J referred in Li v The Herald and Weekly Times Pty Ltd (2007) Aust Torts Reports 81-887; [2007] VSC 109 at [306]ff. Gillard J there recognised that where the conduct of a litigant evinces a lack of faith in their case or consciousness of a weak cause (such as by a failure to produce a particular witness or document or the like), there is a rule (based upon common sense and life’s experiences), that this conduct creates a “discrediting circumstance” that may enable “a link in the reasoning process to an adverse conclusion against the litigant”.

55. [578]

    As to the proof of fraud by circumstantial evidence, the plaintiffs point to what was said by the Court of Appeal in Sharma v Insurance Australia Ltd t/as NRMA Insurance [2017] NSWCA 307 at [17]-[19] per Meagher JA (with whom Macfarlan JA and Sackville AJA agreed).

56. [579]

    Finally, I note that the defendants here emphasise (and the plaintiffs, I might add, accept) that in cases where serious allegations of the present kind (of equitable fraud and dishonesty, or which may expose defendants to criminal liability or a civil penalty) are made, the evidence must be assessed in accordance with the principle stated by Dixon J, as his Honour then was, in Briginshaw (at 361-362), namely that proof to reasonable satisfaction should not be produced by, inter alia, inexact proofs or indirect inferences (see, for example, Nadinic at [47]); Farah Constructions at [170]; and s 140 of the Evidence Act). Emphasis is placed by various of the defendants on the need for the feeling of an actual persuasion before the occurrence or existence of a fact can be found (the Borg Parties, for example, referring to what was said by Emmett J (sitting in the Federal Court as his Honour then was) in Warner v Hung; Re Bellpac Pty Ltd (recs and mgrs apptd) (in liq) (No 2) (2011) 297 ALR 56; [2011] FCA 1123 at [48]; and the observations of Kunc J in Chetwynd v Rose [2020] NSWSC 111 at [159]-[161], including the caution sounded by Basten JA (with whom Handley AJA agreed) in Sangha v Baxter (2009) 52 MVR 492; [2009] NSWCA 78 at [155]-[156] against global credibility findings.

57. [580]

    Further, before approaching the evidence of the particular witnesses, I note that in Kuhl v Zurich Financial Services Australia Ltd (2011) 243 CLR 361; [2011] HCA 11 (Kuhl v Zurich Financial Services) the High Court (Heydon, Crennan and Bell JJ) said (at [62]), that to conclude that a party-witness is reluctant to say what happened is to conclude that the party-witness is deliberately failing to comply with the duty to tell the whole truth; and emphasised that this is a serious conclusion to reach. The High Court said at [64], contrasting the position with a Jones v Dunkel inference where a witness is not called, that a finding that evidence was deliberately withheld by a party-witness operated as an implied admission in that it could be inferred that the evidence was withheld “in breach of the witness’ duty to tell the whole truth in answer to the question, because the plaintiff [party-witness] was conscious that success in the litigation would be rendered impossible or less likely if the material withheld were revealed”. The High Court noted that a litigant who enters the witness box is under a positive duty to tell the whole truth in answer to the questions asked. The Court went on to say that two conditions should be satisfied before a party-witness is criticised for deliberately withholding the truth: first, that reasons must be given for concluding that the truth has been deliberately withheld; and, second, that the party-witness must have been given an opportunity to deal with the criticism (see at [67]). See also Lorrimar v Serco Sodexo Defence Services Pty Ltd [2014] NSWCA 371 (Lorrimar) at [101], [104] per McColl JA (with whom Macfarlan JA and Tobias AJA agreed), where it was noted that the obligation to do so stemmed from the rule in Browne v Dunn (1893) 6 R 67 at 70-71 per Lord Herschell LC.

58. [581]

    This is relevant having regard to the various defendants’ submissions to the effect that pleaded facts were not put to the respective defendant(s) in cross-examination. The plaintiffs submit that, where a defendant has categorically denied all involvement or has denied involvement except on a particular limited basis (which is shown to be false), coupled with the plaintiffs’ case which is fully known and contested, the plaintiffs were not required to cross-examine. Reference is made in this context to Seymour v ABC (1977) 19 NSWLR 219 (Seymour v ABC) at 224F per Glass JA (with whom Reynolds JA agreed) and at 235F, 236D and 237C per Mahoney JA. Reference is also made to Trade Practices Commission v Mobil Oil Australia Ltd (1984) 55 ALR 527, where Toohey J in the Federal Court said (at 539-540) that a witness who contends “absolutely no recollection” of a conversation need not be taken through it by Counsel.

59. [582]

    By way of example, the plaintiffs note that, in the present Proceedings, Ivana Cassaniti (knowing that the plaintiffs were seeking to make out their case on the basis of inferences to be drawn against her) denied that she had any involvement in or knowledge of the transactions and denied that she authorised, delegated or allowed any transactions for both Givana Prestige and Discobell. The plaintiffs say that it was not necessary for Ivana Cassaniti to be taken to facts which were alleged against her upon inference (other than the fact of transactions) because of her complete denial of involvement; and, further, that when the evidence did establish her knowledge and involvement in the transactions, Ivana Cassaniti was left with no defence case as pleaded or upon her evidence.

60. [583]

    As to Tanya Borg, the plaintiffs make similar submissions. It is said that she too was aware of the case that was sought to be made upon inference; and that Tanya Borg’s evidence and version of the events leaves no true explanation from her for these transactions, and that it is no answer to the plaintiffs’ inferential case. It is said that, except for the occurrence of bank transactions, Tanya Borg’s response was a denial of the plaintiffs’ factual case based on inference. Again, the plaintiffs say that they were not required to cross-examine through a series of questions to elicit negative answers from her regarding every element rolled up in her pleading of denial (citing Seymour v ABC). It is said that Tanya Borg was fully aware of the case being put before her and she chose those parts to which she wished to respond to in her evidence (and those to which she did not wish to respond).

61. [584]

    I consider in due course the findings in respect of which inferences were sought to be drawn from the failure of various of the witnesses (such as Gino Cassaniti) to give any evidence as to events that were peculiarly within his knowledge. Generally speaking, I consider that such inferences should here be drawn (since the evidence adduced by the plaintiffs called for an explanation from the missing witnesses as to matters within their knowledge). However, I bear in mind that such an inference does not permit a conclusion that the evidence if called would be positively damaging to the missing witnesses’ case – it simply means that I can more confidently draw an inference otherwise open on the evidence. As to Ivana Cassaniti and Tanya Borg, however, they did make themselves available for cross-examination and, while I do not suggest that the plaintiffs wee required to cross-examine regarding every element encompassed by their denials of involvement, I do consider that the fact that they deposed to their recollection of events (even if not about all aspects of the transactions) is to be taken into account in determining whether any adverse inference should be drawn from the fact that particular aspects were not there addressed. That is particularly relevant where some of the transactions (for example Ivana Cassaniti’s signature on various documents) go back for some years and may well not have been readily to mind. In any event I consider this in due course when considering their evidence.

Evidence of witnesses

1. [585]

   The liquidator, Mr Ball, gave evidence and was cross-examined by various of the defendants (largely, but not wholly, to go to issues ultimately raised by the amended causation defences).

2. [586]

   Reliance is placed (see in due course below) by Gino Cassaniti on the liquidator’s evidence (see at T 187) of his understanding as to the concept of “jump-on” directors and (at T 189) his assumption as to the purpose of such “jump-on” directors; it being noted that (at T 191) the liquidator agreed that it was possible that the purpose of “jump-on” directors was to protect existing directors.

3. [587]

   At T 200, the liquidator accepted that the damages for loss from breach of fiduciary duty were calculated by reference to the tax assessments. At T 205, the liquidator said that he did not think that he had found any invoices issued by Bluemine to any of the defendant companies. At T 208-209, the liquidator accepted that the Commissioner had assessed money coming into the particular companies as assessable income and money out as non-deductible expenditure. It was accepted by the liquidator that the Commissioner had issued assessments without having received any contentions made by Bluemine. Reference was made to the paucity of company books and records (see at T 211). The reasons for the Commissioner’s determinations were admitted subject to relevance (s 136) as going to the Commissioner’s process in issuing assessments not for the findings contained therein (Ex E).

4. [588]

   The liquidator denied that it was his responsibility (as liquidator) to ensure that tax returns were lodged by the relevant insolvent company but accepted that there was a responsibility to ensure compliance with tax obligations (T 220-221). At T 221, the liquidator said that he had thought about the possibility of objection to tax assessment and dismissed it because he had no reason to doubt the veracity of Commissioner’s assessment (and had no books and records to contemplate it). The liquidator agreed that, by March 2017, he had the affidavit from Aris Zafiriou (then an ATO officer) from which he drew the inference that Bluemine did not earn the moneys it had received from paying entities; and the liquidator accepted (at T 221) that it appeared “paradoxical” that the Commissioner’s assessment was on the basis of revenue earnt but that the information known to him was such that his view was that there was no basis for the money to be paid (and therefore, arguably the paying company could have claimed the money back). The liquidator accepted that no further enquiries were made beyond that about the assessments.

5. [589]

   I accept that the liquidator gave evidence honestly and made appropriate concessions. There is no reason to doubt his professionalism or competence.

6. [590]

   Each of Aris Zafiriou (now a former ATO officer), who while an ATO officer had deposed to various matters such as the relevant ASIC records, the investigations that had been carried out, and the provenance of documents, and George Khouri (a current ATO officer, who is a senior technical leader in the debt section and who also gave evidence as to similar matters) was cross-examined.

7. [591]

   The evidence of Mr Zafiriou and Mr Khouri (each of whom has had considerable experience as debt recovery officers within the ATO but no qualifications in tax) simply proves the provenance of the documents before the Court. The Khalil defendants point to the fact that, although both gave evidence that the material tendered came from a much greater body of material which was obtained by the ATO in the course of the tax audit of Banq, neither was able to identify the criteria by which the documents were identified as relevant to the Proceedings. Nothing, however, seems to turn on this criticism made by the Khalil defendants.

8. [592]

   No doubt was cast on the credibility of the liquidator, nor of the ATO officers who gave evidence. Mr Khouri’s responsibility was in relation to debt recovery but not the determination of technical issues as to assessability (and he confirmed that he has no qualifications in law or accounting) (T 281). There is no reason to think that any of them was not giving evidence honestly and to the best of his ability; nor that their conduct in the course of the liquidation and investigation was anything other than competent and professional.

9. [593]

   Gino Cassaniti’s evidence, as contained in his affidavits sworn 11 April 2019 and 28 June 2019, is broadly as follows.

10. [594]

    Gino Cassaniti deposed that: in around 2008, he formed Banq Accountants with Fred Khalil and Ivana Cassaniti ([4]); Fred Khalil and Peter Abboud were “equity partners” in the venture ([5]); Gino Cassaniti was involved in litigation with his cousin which consumed a lot of time and money for approximately four years, and at that time Banq Accountants was falling behind with remittances to the ATO ([8]); in June 2011, Banq was formed with Ivana Cassaniti, Fred Khalil and Peter Abboud with shareholdings being commensurate with the money invested in the venture ([10]); Ivana Cassaniti had children in 2010, 2012 and 2014 at which time she “stopped doing accounting altogether” ([11]); by May or June 2013 Gino Cassaniti resolved to go bankrupt as he could no longer deal with the ATO ([13]); at that time, he accepted an oral invitation from “someone” at Banq to “become a director of some of my clients’ companies for a short time” ([13]) although he never heard anything further about that ([14]); in December 2013, he ceased consulting for Banq ([30]); on 18 March 2014, he was made bankrupt and was subsequently discharged from bankruptcy on 18 March 2017; if there was a Scheme, he did not know of the Scheme as alleged, did not promote the Scheme as alleged, and has not received any payments from the Scheme ([36]).

11. [595]

    In relation to each of RCG CBD, Bluemine and Earth Civil (of each of which he is alleged to have been director at the time of the resolution to enter a creditors’ voluntary winding up) (and also Involved Recruitment), Gino Cassaniti (see his affidavit sworn 11 April 2019): denies that he acted as a director of the company or managed the companies’ affairs ([17], [37(IX)]; says that he did not act or agree to act as their secretary; says he did not agree to become a shareholder; says that he did not sign any transfers of shares; and that he did not authorise the lodgement of ASIC Form 484s for the companies notifying ASIC of changes to officeholders or shareholders ([20]); denies that he met as a shareholder of any of the companies or resolved by special resolution or otherwise to place any of the companies in liquidation and denies signing any minutes of any special resolutions that any of the companies go into liquidation ([21]); asserts that all of the liquidation documents contain forgeries of his signature; that he did not sign any of them and did not authorise anybody else to sign any of the documents on his behalf ([25]); and asserts that he has “never signed documents in anything like the way these forgeries present” ([26]); denies preparing or signing a Report as to Affairs for the companies; denies signing a proof of debt; and denies signing any proxies for a creditors’ meeting.

12. [596]

    As adverted to above, Gino Cassaniti maintains that (on the documents put into evidence by the plaintiffs) 138 of his purported signatures are forgeries (at [25]; Ex K at 56764-56774). Gino Cassaniti retained a handwriting expert, Clifford Hobden, who concluded in his report dated 17 June 2019 (Ex K at 96640) that there was “qualified support” for the proposition that 32 questioned signatures (Q1-6) were not genuine compared to the 36 specimen signatures (S1-19). See, however, the later joint expert report (Ex T), which casts serious doubt on that conclusion and which does not support Gino Cassaniti’s denials.

13. [597]

    The plaintiffs say that the evidence given by Gino Cassaniti in his affidavit sworn 11 April 2019 at [21], [25]-[26] (see above) was false; and that Gino Cassaniti lied in a most calculated way. It is said that clear proof of this is to be found in Gino Cassaniti’s own email, and other emails from his office on his behalf (referring to the email chain on 28 June 2013 referred to above in which Gino Cassaniti’s signature on the winding up documents was sought – and shortly thereafter provided). The plaintiffs say that, from the text of the email chain, it is apparent that these documents were sent to Gino Cassaniti to sign; and that he signed them and caused Alison Hanna (Fred Khalil’s personal assistant) to return them.

14. [598]

    Insofar as Gino Cassaniti denied that he signed them, and asserted that his signatures were forged, the plaintiffs say that his denials are lies because: the subject matter of the correspondence was the proposed creditors’ voluntary liquidation of five companies including Earth Civil, RCG CBD and Involved Recruitment; Cor Cordis had already provided appointment documents for those companies to BPS Recovery (the liquidator’s firm); some of the appointment documents had not been signed and were attached to the email for Gino Cassaniti to sign so the jobs would be able to commence the following Monday; and, approximately half an hour after receiving the email, Gino Cassaniti forwarded the email to Alison Hanna and she in turn forwarded an email to Steven Bazouni, two minutes later, attaching signed pages “as requested” (i.e., signed by Gino Cassaniti). It is said that, by an examination of the signatures in question and comparison of his admitted signatures as assembled in the expert reports, it can be concluded that the allegedly forged signatures are authentic.

15. [599]

    The plaintiffs contend that, in the absence of evidence supporting the assertion that Gino Cassaniti’s signatures were forgeries and in the face of evidence showing that he did in fact sign and return documents for the purposes of implementing the creditors’ voluntary liquidations for Earth Civil, RCG CBD and Involved Recruitment, none of Gino Cassaniti’s contentions (including those in relation to Bluemine documents) can be believed. Further, it is submitted that the evidence demonstrates a disposition on the part of Gino Cassaniti to lie about anything that he thought would implicate him in the Scheme; and to lie to hide his misconduct. It is said that these lies more readily enable a finding of his propensity to lie, and that he had a deep consciousness of the weakness of his defences in these Proceedings.

16. [600]

    Pausing here, I accept the joint experts’ conclusions as to the impugned signatures (which was not sought to be challenged in cross-examination). Therefore, I cannot accept Gino Cassaniti’s asserted denials as to the authenticity of those signatures or his authorisation of those documents. While that does not mean that all of his asserted denials of involvement in Banq, including his role in relation to directorships or the like in respect of the Insolvent Companies and other relevant entities, should necessarily be disbelieved, it does cast serious doubt on Gino Cassaniti’s denials of involvement in the winding up of the Insolvent Companies. Moreover, those denials are belied not just by Gino Cassaniti’s signature on the various winding up documents but also by evidence from numerous clients as to his role in Banq (to which I refer in due course); and it means that I exercise a great deal of caution before accepting any of his assertions at face value.

17. [601]

    In his record of interview with the ATO (Ex 18), Fred Khalil was asked as to his role in the formation of Banq. He said that he became a director of Banq (and that Ivana Cassaniti was not) because “[w]ell, that’s how I wanted it to be”. Fred Khalil said that “maybe” he had discussed this with Ivana Cassaniti; and then, as to discussions that he had with Ivana Cassaniti leading up to the start of the new company and the business at Punchbowl (i.e., Banq), he said (at 12):

18. [602]

    In his ATO record of interview, Fred Khalil said that he agreed in 2011 that Ivana Cassaniti would be employed by the company (Banq) and would be paid a wage.

19. [603]

    In relation to Gino Cassaniti’s involvement, Fred Khalil agreed that Gino Cassaniti started at Banq in 2011. He described Gino Cassaniti’s role at that stage as follows (at 14):

20. [604]

    Fred Khalil agreed that the only work that he was aware of Gino Cassaniti doing for Banq, starting from 2011, was assisting clients with their legal matters and providing business consultancy services to clients. Asked whether he was supervising Gino Cassaniti’s work, Fred Khalil said (at 14):

21. [605]

    Fred Khalil said that, in relation to Gino Cassaniti’s consulting work, he would not really know what he was doing. Fred Khalil also said (and Gino Cassaniti places significance on this), when asked whether the above work arrangement continued from 2011, that it changed, Fred Khalil saying that Gino Cassaniti had personal issues to do with his health; that he was unstable and going through depression; and that he had “still got very big issues” (15-16).

22. [606]

    As I note in due course, I place some weight on Fred Khalil’s description (in his ATO interview) of his role at Banq as indicating that his involvement was as a principal of the company. However, it is also apparent from that evidence that Gino Cassaniti had an involvement in the provision of tax advice at least from the incorporation of Banq until 2011 (and I place less weight on the organisational chart prepared by Fred Khalil at the time of the ATO interview, depicting him at the apex of the organisational structure – see below, which strikes me as consistent with his portrayal of his own role as more significant than it seems to have been at least in relation to certain of the Banq clients such as Frank Criniti and the Nassar entities).

23. [607]

    In his ATO interview (at 21.40), Fred Khalil indicated that the businesses that he had been operating included Banq, Kamikaze Teppanyaki and Reliance Cleaning. As to the role of Reliance Cleaning, Fred Khalil said (at 23.30) (inconsistently with Peter Abboud’s evidence to which I refer in due course):

24. [608]

    Fred Khalil was unable to explain why RCG CBD had paid Banq the sum of $1,224,336.21 (and was seemingly not even prepared to concede that it was a very large sum of money to Banq) (Ex 18 at 88.40-89.04). However, Fred Khalil did confirm (at 89.23-26) that Banq was not providing accounting services to RCG CBD “worth anywhere near” the amounts that had been paid to Banq.

25. [609]

    Pausing here, the confusion apparent in Fred Khalil’s answers extracted above as to the role of the respective companies is to my mind telling. It bespeaks of a lack of any genuine distinction between the companies that Fred Khalil could not give a consistent account of Reliance Cleaning’s role (and that of RC Group Aust).

26. [610]

    As to the winding up of the Insolvent Companies, Fred Khalil deposed in his affidavit sworn 25 March 2019 (much of which was read as assertion) to the effect that, in respect of each of the Insolvent Companies, Gino Cassaniti asked him to assist with the preparation of the necessary paperwork and/or to meet with the liquidator to prepare the necessary documents (including, for example, in the case of Rackforce the statement of affairs); and that Gino Cassaniti or the client provided a list of creditors who gave proxies for him to attend creditors’ meetings which he did (as to Earth Civil, see [43]; as to RCG CBD, see [47]; as to Bluemine, see [44]; as to Diamondwish, see [40]; and as to Rackforce, see [35]-[37]). As noted above, Gino Cassaniti denies this.

27. [611]

    Ultimately, in the absence of Fred Khalil from the witness box, I am left to assess the plausibility of his assertions having regard to the evidence as a whole, including what was said in the ATO examinations.

28. [612]

    As to Bluemine, in his ATO interview at 38.34-35 (Ex 17), Peter Abboud said that his cousin, Andrew Barsa, (who is recorded on ASIC records as a director of Bluemine for the period from 7 June 2012 to 1 April 2013 (Ex K at 50379), always reported to him about everything that went on. However, somewhat inconsistently with this, Peter Abboud also seemed to accept that Andrew Barsa controlled Bluemine at least to the extent that he accepted that he was a director of the company.

29. [613]

    At 39.8-18 in his ATO interview, Peter Abboud said that Bluemine was incorporated upon his advice, and the advice of Fred Khalil, to purchase trucks from an entity owned by George and his ex-wife (Jian Holdings), saying that:

30. [614]

    Asked about his involvement in the sale of the trucks from Jian Holdings to Bluemine, Peter Abboud said in his ATO interview that (at 46, 50):

31. [615]

    Peter Abboud confirmed in his ATO interview that “the trucks were purchased under Bluemine”, which he seems to have regarded as Andrew Barsa’s company (saying, “Bluemine, which is my cousin, Andrew Barsa” – at 37.33) and that Andrew Barsa purchased the trucks because he wanted to hold the trucks for George “because they were really close at the time, but now there’s no relationship any more”. He then suggested that Andrew “thought he could make a little bit of money on the trucks” saying that, “knowing him, he likes to have a look around and see whether he can get his hand on a bit of profit here and there…” (at 37).

32. [616]

    As to the payment of $20,000 into Peter Abboud’s LFC Holdings’ bank account, Peter Abboud said that this was money that Andrew Barsa sent to him to pay George Abboud money (that George said he was owed), saying that (at 40):

33. [617]

    Peter Abboud was unclear whether Bluemine had any source of income or cash aside from the proceeds of the sale of the trucks, saying that this was possible and that he thought “Andrew Barsa got involved with people in – in the civil game” (at 47).

34. [618]

    In Peter Abboud’s affidavit sworn 22 March 2019 (at [62]) he admitted that he prepared the first BAS for Bluemine (insofar as he deposed that “except for the first BAS, I was not involved in the preparation of any Business Activity Statements for Bluemine”). In his ATO interview, he said that he did not generate any accounting records for the company as a result of acquiring the trucks but that he assisted “him” (in the context, Andrew Barsa) with preparing “a BAS report or something” (Ex 17 at 48). Peter Abboud said in his ATO interview that he prepared multiple BASs for a lot of clients at a lot of companies and could not remember a specific one but that he did have a memory of preparing the BAS following on from the acquisition of the trucks.

35. [619]

    Asked how a proper or lawful input tax credit claim could be made when Bluemine did not pay Jian Holdings for the trucks, Peter Abboud said that it “was an acquisition” and that “it could have been paid via loan agreement”. Tellingly, there was the following exchange (Ex 17 at 48-49):

36. [620]

    The plaintiffs point out that the BAS involving the truck acquisition and the payment of $590,000 was the first BAS for Bluemine (i.e. the one that Peter Abboud admitted preparing) (see Aris Zafiriou’s affidavit sworn 9 March 2017 at [109]. (The plaintiffs say that the BAS was false in relation to this transaction.)

37. [621]

    Peter Abboud was a signatory to the bank accounts of both Bluemine and Banq (indeed he said in his ATO interview that he was a signatory to multiple accounts). In his ATO interview, when asked about payments from Bluemine to Banq, Peter Abboud accepted (at 53) that he would possibly have known at the time that Bluemine had transferred $508,600 to Banq but was not aware of an invoice having been issued by Banq to Bluemine for that amount. He accepted that the value of any accounting work done by Banq (for Bluemine) was worth nowhere near the amount of $806,000 (the total amount transferred to Bluemine between February and July 2013) (at 53).

38. [622]

    Peter Abboud accepted (at 49-50) that there would be no other reason (other than the sale of the trucks from Jian Holdings to Bluemine discussed above) for Banq to be paying the sum of $590,000 to Bluemine; that he had not had any discussion with Fred Khalil before the money was transferred to Bluemine; and that “[w]e had a fight over it”. Asked on what basis he considered it to be within his authority to make that transfer to Bluemine, he said simply “I’m a signatory” but later agreed that being a signatory to the account did not mean that he was authorised to transfer the money and that “he [in context Fred Khalil] gave me a slap on the chin about it”. He said that he did not enter into any agreement with Bluemine on behalf of Banq as to how that money was to be treated but that after the transfer there was a loan agreement (at 51).

39. [623]

    As to the Bluemine Thailand payments, Peter Abboud’s evidence in his record of interview with the ATO was that those payments were made to his brother, George Abboud (see Ex 17 at 41.30-40, 43.40); that there were multiple transactions going overseas “to pay him back” and “[t]o pay for his lifestyle”; and that Andrew Barsa had told him about them and that he, Peter Abboud had assisted in transferring the moneys to Thailand.

40. [624]

    As to the payments made by RCG CBD, in his interview with the ATO Peter Abboud confirmed (Ex 17 at 24.29-36) that there was no reason (other than payments to him for the work he was doing at Banq) for him to be receiving payments from RCG CBD. In particular, he said that he had never lent money to RCG CBD or Reliance Cleaning. He said that, other than salary (paid by the labour hire companies) and salary from Banq, and a $125,000 bonus (at 14), he received no other remuneration directly or indirectly from the work he did at Banq and that he had no arrangement whereby a company in which he had an interest was paid a management fee for his work.

41. [625]

    Inconsistently with that evidence, when, questioned as to payments to LFC Holdings, Peter Abboud said (see Ex 17 at 14.16-15.3 and 15.40-45) that “LFC Holdings just invoices for management fees”; and, when asked what LFC Holdings managed (i.e., for what it was invoicing), Peter Abboud said that “[i]t was just an arrangement, say, this is my wage plus management fees type”, saying:

42. [626]

    Challenged with the inconsistency in his evidence as to whether there was an arrangement whereby a company associated with him was paid management fees by Banq, Peter Abboud’s explanation was that he had completely forgotten about it but that he was using LFC Holdings “at one stage a couple of years ago to invoice management fees” (at 15.1). He said (at 15.40):

43. [627]

    In respect to payments made to LFC Holdings, Peter Abboud said (Ex 17 at 16.7-28) that funds were paid periodically into LFC Holdings but that there was one lump sum bonus payment. His evidence was that LFC Holdings periodically issued invoices to Banq for a management fee; and that it issued the invoices in timing with the payments.

44. [628]

    At 19.10-34, particularly in respect to payments from RCG CBD, Peter Abboud’s evidence was that LFC Holdings did not do any business with any of the labour hire companies that he had been associated with; and that none of the labour hire companies with which he had been associated owed LFC Holdings any money. There was the following exchange (at 19):

45. [629]

    In relation to RCG CBD, Peter Abboud could not recall that Banq did any accounting work for RCG CBD; nor could he remember doing some of that work himself. He agreed that the value of any accounting work that Banq did for RCG CBD would be nowhere near the value of $1.2 million (at 57). He could not recall whether he was a signatory on the RCG CBD account (at 56).

46. [630]

    As is the case with each of Gino Cassaniti, Fred Khalil and George Khalil (none of whom made himself available to be cross-examined), I can only assess Peter Abboud’s evidence based on the documentary records and the other evidence as to events that occurred at the time. I consider in due course the submissions made as to what inferences should be drawn from his (and their) failure to make himself available for cross-examination.

47. [631]

    Andre Abou-Antoun was examined in chief (and at times, with leave, cross-examined) by the plaintiffs by reference to statements he had made in his ATO interview. Andre Abou-Antoun gave evidence that he and his brother, Michael Abou-Antoun decided to change the accountants for their business to Banq and they got in touch with Fred Khalil at Banq (T 623.25).

48. [632]

    From 2011 onwards, Andre Abou-Antoun was the General Manager of AKA Civil and AKA NSW and held that position during the period that the impugned transactions occurred (2012-2013) (T 618.23-45). His evidence was that Michael Abou-Antoun was also involved in the conduct of the business in AKA Civil and AKA NSW during that period (T 619.1-6).

49. [633]

    In respect of Earth Civil, Andre Abou-Antoun’s evidence in his ATO interviews on 31 May 2018 and 31 July 2018 was to the effect that: payments by AKA Civil and AKA NSW to Earth Civil were made because Gino Cassaniti advised them to make those payment to Earth Civil; the purpose of these payments was to obtain tax deductions, and this was communicated to him by Gino Cassaniti; that Gino Cassaniti “basically said just transfer the money and then take the money out of the account after it was transferred”; and that the money withdrawn from Earth Civil was used to pay for salary and wages of the AKA Group, in cash; however, he was unable to provide any substantiation for his claim, admitting that there were no records available in relation to the alleged payment of wages.

50. [634]

    In respect of Bluemine, Andre Abou-Antoun’s evidence to the ATO was to the effect that: Peter Abboud and Fred Khalil advised AKA that they had a company called Bluemine, that they managed and controlled and that they could arrange inflated invoices and exaggerated invoices to be issued to AKA and then they would return the money less a 2.5% fee; that from what he recalled that recommendation was made in person in their office; and that the recommendation was adopted by him on the basis that the two tax components of the Scheme were that AKA would claim income tax deductions and GST credits and the AKA Parties would save 30% of the tax they had to pay. He accepted in that interview that the tax benefit that was explained to him was the ability to claim a deduction on the income of the AKA entities for amounts being paid to Bluemine; and that he was told that Bluemine had an ability to issue inflated or exaggerated invoices.

51. [635]

    At T 635.24-31, Andre Abou-Antoun confirmed that the advice to set up the companies and to transfer funds between AKA Civil and AKA NSW came from Banq, going back to “the initial explanation” of Peter Abboud. At T 637.7-15, Andre Abou-Antoun’s evidence was that, in relation to large payments between AKA entities and Earth Civil, he would approve them but said that “when the payment actually gets paid that’s to the discretion of the accountant and he makes that call based on when it’s due, the due date on the invoice”. Andre Abou-Antoun’s evidence (at T 639.2-18), as to payments in and out of the AKA companies, was that directions for those payments were being given by Banq; and that within Banq, those directions were given by Peter Abboud and Fred Khalil. At T 640.22-641.5, Andre Abou-Antoun said that it was Fred Khalil or Peter Abboud from Banq who would tell him to make bank transfers.

52. [636]

    At T 642.6-37, T 647.49-648.16, Andre Abou-Antoun initially confirmed the evidence he gave at the ATO interview on 31 May 2018 as to: the advice given by Peter Abboud and Fred Khalil (that they had a company called Bluemine that they managed and controlled and that they could arrange inflated and exaggerated invoices – although at 648.15, Andre Abou-Antoun said that “they were not saying inflated invoices, that’s something that we came to learn afterwards”); that they could provide a valuable opportunity to the AKA entities; that he understood that they were explaining to him that if he participated in the transactions in the way advised, namely inflated invoices and the round robin with money being paid away and then returned less a fee, that there would be a “tax benefit” to the companies (T 655.16-31), and that they would be “saving tax, the primary tax and – and the GST” (T 671.27-39); and that (at T 666.29) the 2.5% fee (payable to Banq) was great value relative to the tax benefits that the AKA companies would be receiving.

53. [637]

    At T 660.34-48, Andre Abou-Antoun accepted that what happened concerning the payments to Bluemine was that: first, Bluemine issued invoices to AKA Civil and AKA NSW and those two companies paid money to Bluemine; then in relation to that payment Bluemine would make a payment to one of the AKA related companies (MAL Land Group, Great Brothers, LAM Haulage); and that in his mind what was happening at that time, in accordance with the arrangement that Peter Abboud and Fred Khalil had put to him, was that the money that was being paid away by AKA Civil and AKA NSW was coming back into the group. The plaintiffs point out that Andre Abou-Antoun further acknowledged that the money would always come back (T 660.50-661.2).

54. [638]

    As to Andre Abou-Antoun’s involvement with those at Banq, Andre Abou-Antoun’s evidence was that, after the initial “Yellow Pages” advice, he saw Gino Cassaniti from time to time when he visited the office “but never really dealt with him”; that if he bumped into him it was “hey how you’re going that was it … [and] [h]e was out the door” (T 758); and that, by a couple of years after he had met Gino Cassaniti, Gino Cassaniti was not providing any advice to him or his company. Andre Abou-Antoun’s evidence was that he dealt more with Fred Khalil and Peter Abboud.

55. [639]

    At T 676.35, Andre Abou-Antoun gave evidence that up until anywhere between 2013 or 2015, the person dealing with the BAS returns in his organisation was Peter Abboud, see the following:

56. [640]

    Peter Abboud further gave evidence (at T 676.45) that this mostly happened at Banq’s office and sometimes they would attend AKA’s offices. Either way, he said that Banq had TeamViewer (which I understand to be a remote access software) and complete access to AKA’s MYOB and that they would “log in sometimes and just take the information out”; and that Banq suggested and installed this (i.e. TeamViewer) (T 676.48). The plaintiffs place emphasis on Andre Abou-Antoun’s evidence that Banq had access to the AKA companies’ MYOB file and that “I did see on our computer – on Komel’s computer, and Dylan’s computer, in fact – TeamViewer popping up, where Banq Accountants were requesting access to our MYOB, and us granting them access” (at T 734).

57. [641]

    At T 678.42-680.40, it was put to Andre Abou-Antoun by Senior Counsel for the plaintiffs that the answer he gave in his ATO interview that what Gino Cassaniti “basically said” was “just transfer the money and, then take the money out of the account after it was transferred” was true. Andre Abou-Antoun responded that “[i]t’s true from what I was told at the time” and later, “it’s not true”. The plaintiffs say that, while Andre Abou-Antoun tried in the course of his evidence in this Court to resile from his answer to the ATO (by suggesting that he was not told that but that it was in fact what his brother had told him), this (and the “longwinded nonsensical explanation” of what he meant by the use of the word “us”), was dissembling on Andre Abou-Antoun’s part. The plaintiffs say that Andre Abou-Antoun’s evidence to the ATO was the truth and that is what Gino Cassaniti told him.

58. [642]

    Questioned as to his knowledge that the money paid to Earth Civil would be paid away immediately after it was transferred, Andre Abou-Antoun’s evidence was that “[w]e got advice to withdraw the money out of the account of Earth Civil” (T 706). He then said that he did not know before it happened that the money that was being paid into Earth Civil would almost immediately be taken out (and added that, when he withdrew the money, it was not immediate) (at T 706.1-20). At T 678.1-9, Andre Abou-Antoun said he recalled withdrawing the money but not why the payments were made by AKA Civil to Earth Civil but then added (before being interrupted by objection from Counsel) that “it was – it was a device that Gino Cassaniti and Fred Khalil –”. As to the withdrawal of cash by Andre Abou-Antoun out of Earth Civil’s bank account from time to time, Andre Abou-Antoun’s evidence was that he personally took the cash but the money was then paid back in wages; however, he then agreed that the money was taken home and put in the safe (T 684.30).

59. [643]

    Andre Abou-Antoun denied (at T 705.16-49) that he knew that the tax invoices and benefits claimed by AKA NSW were false. He denied that he knew in 2012 that if he paid GST on purchases on the one hand and collected GST on purchases paid to him on the other, then those payments would be set off against each other in the return to the ATO. Andre Abou-Antoun said that he had “absolutely no idea” that the full amount of the Bluemine invoices for (purported) management services would be expressed in the returns to the ATO as the true expenditure of the companies; and denied that he knew that those invoices would be expressed to the ATO as true expenditures of the company when he knew that to be false.

60. [644]

    Andre Abou-Antoun denied that his understanding of the arrangement between his companies and Banq was that Banq was to make savings on GST and income tax (T 676.15). The plaintiffs say that it is implausible for Andre Abou-Antoun to deny his understanding that there were tax benefits given his answers (at T 655.1-5) to the effect that he had agreed, at the time of the ATO interview, that Fred Khalil and Peter Abboud indicated there was an ability to reduce drastically the taxable income of the AKA entities by using Bluemine. Insofar as (at T 655.31), Andre Abou-Antoun said that his answer in the ATO interview (to the effect that the tax benefit explained to him was the ability to claim a deduction on the income of the AKA entities for those amounts being paid to Bluemine) was not true and that the benefits had not been explained to him (T 676.25), the plaintiffs maintain, to the contrary, that his evidence to the ATO was true. It is said that Andre Abou-Antoun’s explanations (at T 656.16 and T 656.30) that he was very confused are not believable. (It is noted that Andre Abou-Antoun went so far as to assert that there were parts missing from the ATO transcript of interview, which is also said to be false – see T 656.45-657.5).

61. [645]

    Further, the plaintiffs say that it is clear from the evidence (at T 671.33-45) that Andre Abou-Antoun knew and expected that the AKA group would be saving tax and GST; and that his subsequent answer that “it was more of an answer that I gathered from a combination of professionals that were giving me advice at the time about what happened” was dissembling (at T 671.48). It is said that, Andre Abou-Antoun’s attempted explanation that the reason his answer in the ATO interview was wrong, was because he thought the purpose of the arrangement with Bluemine was only to invest in property (at T 672.13-673.46). The plaintiffs say that that evidence was false. Further, the plaintiffs say that that evidence does not explain why Andre Abou-Antoun did not understand at the time of the arrangement that there was a tax and GST benefit flowing to the AKA Parties from the arrangement (as he had admitted in the ATO interview). In essence, it is said that Andre Abou-Antoun simply sought to avoid the question by attempting to talk about another issue.

62. [646]

    When giving evidence about the veracity or falsity of the Bluemine invoices (see Ex K at 56339-56343), Andre Abou-Antoun accepted that the claims that were in the invoices from Bluemine for management or supervision services “were fake and fabricated … because no services were ever provided by Bluemine” to AKA Civil or AKA NSW, but qualified that by saying “except for AKA transferring the money to Bluemine to purchase a property” (T 653.10-15; see also T 688.18-690.45). When asked again later if he agreed that the same description on a particular invoice was false, Andre Abou-Antoun answered first, by saying “only that we were purchasing properties” and, second, by saying “I agree now, yes” (emphasis added). The plaintiffs say that those answers demonstrate Andre Abou-Antoun’s knowledge that the invoices were false; and that his denials of knowledge of exaggerated and false invoices are false.

63. [647]

    Further, it is said that (at T 653) Andre Abou-Antoun’s lack of memory regarding the answer in the ATO interview that, of all the invoices from Bluemine, there had only been one service provided of one kind (and that it was for a “very, very, very small amount”) should not be believed (see also T 660.21-32). It is noted that, in response to questioning in the ATO interview as to how many invoices might be accurate in relation to services provided by Bluemine, Andre Abou-Antoun responded that “it could be just one” (see Ex O at 79; T 660). It is said that, in cross-examination, he sought to downplay this answer by claiming it was an estimate (T 660.25). It is noted that Andre Abou-Antoun went on to say (at T 660.33) that his view had not changed from then until the day of his evidence, and that it was a “very, very, very small amount”.

64. [648]

    When asked why he would approve a payment when he knew no management or supervision service had been provided, Andre Abou-Antoun responded (at T 689.49) that he approved it because it was a means for them to purchase property and he was advised by the accountants that Banq would send an invoice, they would pay the invoice to Bluemine and then Bluemine would pay the money to an AKA-related entity which was purchasing the property, and that “it was as simple as that” (see at T 690.7-45). The plaintiffs say that, having already admitted that he knew Bluemine did not provide any management or supervision services, Andre Abou-Antoun’s explanation should be regarded as a deliberate attempt to hide the truth.

65. [649]

    At T 651-652, Andre Abou-Antoun variously said that: he had not understood questions being asked of him or the particular question asked of him at the time of the ATO interview, namely, “the attraction of what they were promoting, you tell me if I’m wrong about this, is what they were saying was this entity, Bluemine, provides an opportunity for AKA Civil and AKA NSW to make payments to claim tax deductions” (see Ex O at 59); he did not understand the question because he was very confused; on a number of occasions he mentioned to the questioner that he was drained and needed a break; this was because it was going for eight or nine hours and he was basically facing seven or eight people looking at him on the other side of the desk and he thought that he had to answer the questions, so he was basically just giving answers to assist himself to get out of there. The plaintiffs say that Andre Abou-Antoun was dissembling (at T 653.25-654.36) when he sought to suggest that basically the transfer of the money to Bluemine was in order to purchase property and that there were some other very small services; and when he sought to characterise documents evidencing the transfer or money flow from AKA to Bluemine and then from Bluemine to the properties (or the company purchasing properties) as an answer to the question about Bluemine issuing false invoices. It is submitted that, when looking at the transcript in context, that was a diversionary answer rather than an answer to a question which he pretended not to understand. It is said that it was equally dissembling when Andre Abou-Antoun said that the only benefit that the AKA entities were receiving was the benefit of purchasing a property in St Marys.

66. [650]

    The plaintiffs say that it is clear from the ATO record of interview that the suggestion that the interview had been going for eight or nine hours was a gross exaggeration, noting that the point at which this question was being asked was only partway through the relevant interview. Insofar as Andre Abou-Antoun sought to say that his answers in the ATO interview were not correct because he did not understand the question, the plaintiffs say that Andre Abou-Antoun’s answer at T 652.29-34 (that he now understood that the invoices provided to him were exaggerated or inflated but that he did not understand that at the time) should not be believed.

67. [651]

    The plaintiffs say that the tenor of Andre Abou-Antoun’s evidence (at T 658.25-48) was that: the arrangement involved Bluemine issuing invoices to AKA entities; that would always occur before the money flowed to Bluemine; that they did supply some service; and although he did not say anything to the tax officers at the time about the purchase of property, the reason he did not was that although he had the opportunity to tell them if that was the fact, he felt there was no reason to provide that explanation because they weren’t the questions they were asking him about. The plaintiffs say that this evidence is unbelievable and is false.

68. [652]

    At T 692.17-24, Andre Abou-Antoun’s evidence was that he expected that 2.5% of the gross amount ($652,825.83) of the Bluemine invoice to AKA Civil would be deducted for the accountants (see Ex K at 56341). Similarly, he accepted (at T 693.39) that of the amount of $500,000 that AKA NSW paid to Bluemine, Great Brothers received $487,535; and, Bluemine paid to RCG CBD $12,465 which was exactly 2.5% of $500,000 (see Bluemine third further amended statement of claim at [160]). Andre Abou-Antoun did not know who RCG CBD was, but he accepted that it was associated with Gino Cassaniti and that the 2.5% fee went out to Banq or people associated with Banq (at T 694.10-19). It is said that Andre Abou-Antoun gave dissembling answers about his knowledge of whether or not and how much Banq charged as a fee for this arrangement (see at T 661.35-667, 666.29 cf T 667.7 and T 667.19). The plaintiffs say that Andre Abou-Antoun evidence that he misunderstood the question at the time (as to whether Banq indicated that the 2.5% was great value relative to the tax benefits), is unbelievable in the context of the ATO interview as recorded in the ATO transcript.

69. [653]

    The plaintiffs say that Andre Abou-Antoun was: an unsatisfactory witness; that he was not frank; and that his demeanour in the witness box (described as feigning intense concentration by shutting his eyes for every question) was entirely contrived. As indicated above, the plaintiffs submit that in a number of instances Andre Abou-Antoun was lying in the witness box. They submit that, to the extent that Andre Abou-Antoun’s evidence in the witness box was contrary to the evidence he gave during the ATO interviews, the latter is to be believed in its entirety and his evidence in the witness box is not to be believed.

70. [654]

    The plaintiffs say that Andre Abou-Antoun admitted far more candidly to the ATO than he did to the court that: he was aware that the transactions were entered into on the advice of the Primary Conspirators; the transactions were not genuine; there were no genuine commercial documents; there were no services provided; and the purpose for entering into the transactions was to obtain tax and other benefits for AKA companies and for himself.

71. [655]

    It is said that Andre Abou-Antoun’s evidence of the advice given by Peter Abboud and Fred Khalil is the archetypal Scheme Recommendation pleaded by the plaintiffs; and that transactions in Earth Civil and Bluemine in which the AKA Parties were involved were the very round-robin of payments of which complaint is here made.

72. [656]

    Andre Abou-Antoun’s evidence was that he was unaware that the actions of AKA Parties in performing the transaction complained of by the plaintiffs was unlawful at the time. The plaintiffs say that evidence should not be believed. It is said that he was aware that no services were being provided, the invoices were false and inflated and his companies were making claims for tax deductions and claims for GST credits when they were not entitled to do so; that his conduct was dishonest; and that an honest and reasonable person would have been aware that that conduct was dishonest.

73. [657]

    The AKA Parties, to the contrary, submit that, viewed as a whole and considered in context, the evidence given by Andre Abou-Antoun both in Court and during his interviews with the ATO is in substance consistent; and that no adverse credit findings should be made against him. They have prepared a comparison of his evidence at the ATO interview and his evidence in Court in this regard.

74. [658]

    In particular, it is submitted by the AKA Parties that Andre Abou-Antoun was not dishonest in his evidence as to the purpose of the various transactions being related to a property purchase; nor as to his evidence that he only discovered certain essential elements of the “conspiracy” after the fact (from conversations with his brother Michael Abou-Antoun, with accountants and advisers and with the ATO, including during the two days of compulsory interviews under s 353-10 of Schedule 1 of the Taxation Administration Act on 31 May 2018 and 31 July 2018). Further, it is submitted that ultimately very little weight should be given to the ATO transcripts.

75. [659]

    My impression of Andre Abou-Antoun in the witness box was that he was very nervous and stressed. Of course, that does not necessarily indicate some sort of consciousness of guilt. Many witnesses are stressed when giving evidence (and indeed it would appear from the ATO transcript that Andre Abou-Antoun was similarly stressed when examined by the ATO). That said, even accepting that Andre About-Antoun was confused at times during the course of his evidence in this Court, the account or explanation that he gave in the witness box as to his answers in his ATO interview (such as the length of time that the interview had been going on for at the time he gave certain answers) was implausible; and his evidence in the witness box was itself confused. He was an inconsistent and unreliable witness.

76. [660]

    In that regard, I have carefully reviewed the schedules prepared by the AKA Parties to accompany their submissions as to the context in which questions and answers were put to Andre Abou-Antoun both at the time of the ATO interview and the giving of his evidence in the witness box; and the submissions made in relation thereto. I accept that there was potential for Andre Abou-Antoun’s recollection of events to have been affected not just by the passage of time but also by the advice he has been given over time (no doubt with the benefit of hindsight) as to what occurred in relation to the impugned transactions.

77. [661]

    However, I place weight on the fact that, in at least one answer given at the time of the ATO interview, he made clear that he was doing his best to give his recollection or memory of events at the time (see Ex O, 31 May 2018 interview at 60), saying that:

78. [662]

    That is inconsistent with the submissions here made to the effect that Andre Abou-Antoun’s memory has been tainted by what he has since been told by others, such as his accounting advisers, as to what in fact occurred. Moreover, Andre Abou-Antoun’s evidence to the ATO as to the advice that was given at the time (or his understanding of that advice) and as to the invoicing arrangements rings true insofar as it is consistent with the evidence of others (such as Frank Criniti, in particular, but also Mario Sande and Elias Nassar).

79. [663]

    Andre Abou-Antoun’s insistence on the aim of purchasing property as a reason for the payment arrangements (not proffered at the time of the ATO interview), while I do not say is dishonest, nevertheless smacks of an ex post facto justification for what occurred at the time (and could itself be a product of the very timing issue which is relied upon by the AKA Parties as explaining away the evidence given by him to the ATO). I have little difficulty accepting that the Abou-Antoun brothers (or perhaps just Andre Abou-Antoun) were contemplating property acquisitions (the name MAL Land Group suggests as much). However, I have difficulty accepting the suggestion that all of the impugned payments were related to property transactions (and the justification for the carousel payments as being related to property purchases is implausible). Thus, I treat Andre Abou-Antoun’s evidence with no little degree of caution.

80. [664]

    Michael Abou-Antoun has not adduced any evidence. The plaintiffs say that the obvious inference is that there is nothing he could have given evidence about that would have assisted him in defending the plaintiffs’ claim. In particular, it is noted that Michael Abou-Antoun does not seek to provide any commercial justification for any of the transactions involving the AKA Parties. The plaintiffs say that it is to be inferred that, regarding the transactions involving the AKA Parties, Michael Abou-Antoun (and also Andre Abou-Antoun) knew (within one or more of the first four categories of Baden Delvaux knowledge) of and assisted the fiduciary’s (Gino Cassaniti) dishonest actions. I consider this in due course.

81. [665]

    Ivana Cassaniti swore two affidavits, on 11 April 2019 and in reply on 28 June 2019, before swearing a third affidavit (which it is said clarified and corrected her earlier affidavits) on 3 March 2020. The significant differences between Ivana Cassaniti’s earlier affidavits and her latest affidavit went to her role in the formation and business of Banq.

82. [666]

    Ivana Cassaniti’s affidavit evidence, filed prior to the commencement of the hearing and before her 3 March 2020 affidavit, was, in summary, that: she began working “as an accountant” in 2005 at a firm owned by Gino Cassaniti’s cousin (CAP Accounting) (Ivana Cassaniti’s affidavit sworn 11 April 2019 at [2]); in around 2008 she “assisted” in forming Banq Accountants (through the company Givana Prestige) (at [6]); that she had a 66.6% share in Banq Accountants (at [7]); that at the time of the formation of Banq Accountants she “funded the entire initial set up” and used all her funds to fit out and furnish the office premises “while Gino introduced the clientele”; and that she personally used credit cards and borrowed funds from family and friends to “fund the initial start up”, estimating this to be around $250,000 ([8]); between 2008 and April 2010 she was involved in the running of the business and engaged in “accounting work” ([9]); Gino Cassaniti was primarily involved in introducing new clients to the firm ([8], [10]); following the birth of her first child, from around April 2010, she was focused on her child and was unable to be, and was no longer, involved in the management of the Banq Accountants’ business ([13]-[14]).

83. [667]

    Ivana Cassaniti further deposed that: in 2011, she formed Banq, with Fred Khalil and Peter Abboud (Ivana Cassaniti’s affidavit sworn 11 April 2019 at [16]); from 1 July 2011 to 9 November 2016, she was an equity partner; her interest was through Givana, which held a 60% shareholding in Banq; GFP Holdings, of which Fred Khalil was the director, was incorporated to acquire the Banq premises at Punchbowl (Ivana Cassaniti’s affidavit sworn 28 June 2019 at [8]-[9]); she funded approximately 60% of the costs to acquire the Punchbowl premises and Fred Khalil and Peter Abboud contributed 40% of the costs; Fred Khalil was a 30% shareholder and Peter Abboud a 10% shareholder and that they were both considered equity partners in the firm (28 June 2019 affidavit at [18](c)).

84. [668]

    Ivana Cassaniti deposed that in 2011 to 2012 she did not attend the office much at all as she was taking care of her children (11 April 2019 affidavit at [17]); and that when Banq was set up, she ceased to do “any accounting work” and, for that reason, she was never a director. Ivana Cassaniti deposed that her role, at its highest, was limited to one or two days a week undertaking administrative work as a “silent partner” (28 June 2019 affidavit at [24](c)-(d)).

85. [669]

    Ivana Cassaniti deposed that: in or about 1 July 2014 Givana’s shares were reduced to 50% (28 June 2019 affidavit at [10](b)); dividend payments from the business were paid 50% Givana, 25% to Fred Khalil and 25% to Peter Abboud (28 June 2019 affidavit at [18](b)); Fred Khalil handed the day to day activities of the business (28 June 2019 at [10](d)); and Fred Khalil and Peter Abboud operated all the bank accounts (although all three shareholders were appointed signatories) (28 June 2019 affidavit at [10](d)).

86. [670]

    Ivana Cassaniti denied that Gino Cassaniti was ever a major shareholder of Banq; she deposed that her shares were held by Givana as trustee for the Givana Family Trust and that she was a major shareholder (see her 28 June 2019 affidavit at [10](b), [13](a)). In her 3 March 2020 affidavit, Ivana Cassaniti said that her assistance in forming Banq Accountants was limited to helping Gino Cassaniti borrow money from their friends and family; and she deposed that her 66% interest in Banq Accountants was held jointly with Gino Cassaniti. In cross-examination, she confirmed that she regarded herself as the 60% owner of Banq (T 1120.40-1121.2 and see T 1131.32-35).

87. [671]

    In her affidavit sworn 3 March 2020, Ivana Cassaniti deposed (at [6], which was read as an assertion subject to weight), and at ([2], [8] and [10]) that: her involvement in the running of Banq was limited to providing basic bookkeeping services only (preparing bank reconciliations and collecting Banq’s debts); and that she never maintained, managed or reviewed transactions or the work of others beyond bookkeeping. (For Ivana Cassaniti is it said that she was not challenged when she said in cross-examination that she was unable to prepare a profit and loss statement or a balance sheet.) The plaintiffs say that Ivana Cassaniti’s denial (at T 1115.28-49) of having ever worked as an accountant (including when she worked at CAP Accounting) is not to be believed, noting that it is contrary to the evidence of Gino Cassaniti at [2] of his affidavit sworn 11 April 2019.

88. [672]

    In cross-examination by the plaintiffs, Ivana Cassaniti confirmed that her evidence (contrary to her first affidavit) was that she had previously worked at Banq Accountants and Banq as a bookkeeper (and not as an accountant) (T 1115). Her evidence was that: from 2010, she had little involvement with the business of Banq because of her family commitments; that she was getting a wage but was not working or was doing “very minimal work”; and that she was at home (T 1116-1117). Ivana Cassaniti deposed that Givana Prestige did not receive 60% of the profits of the respective Banq companies (saying that she had seen her bank statements and would have noticed had Givana Prestige received 60% of the profits earned by Banq) (T 1116-1117); and that she did not draw any profits from the business and only received a wage (T 1118).

89. [673]

    At T 1148, Ivana Cassaniti denied that she wanted to know the profit from the business of Banq (saying, tellingly, “[m]aybe my husband wanted to know what the profit was but not me”), on the basis that she was at home looking after her children; and said that she had “absolutely no idea” of Banq’s profit in 2013.

90. [674]

    Ivana Cassaniti denied that she instructed Peter Abboud to make transfers out of accounts from time to time (T 1118-1119), saying that it was not necessary for her to do so as Peter Abboud was a signatory of the account. She then accepted that it was possible that she might have instructed Peter Abboud to make a transfer from the trust account because she had a daily limit of $20,000 so that if it were to be exceeded “somebody else would have to sign off on it”. However, she denied that one of the reasons that she gave Peter Abboud instructions from time to time was that she wished payments to be made to other companies unknown to Peter Abboud. At T 1120ff, Ivana Cassaniti denied that she had ever instructed Peter Abboud to make payments to suppliers of companies that were creditors of Banq; but accepted that she might have instructed them from time to time.

91. [675]

    Ivana Cassaniti denied that, by reason of her majority ownership in Banq, she “called the shots” (T 1121.5) and denied that she was the person at Banq that was actually in charge of transferring moneys between the various companies (T 1125). Her evidence was that, in the period from 2011 to 2014, she was at home and so did not know whether Gino Cassaniti and Fred Khalil approved clients’ tax returns in that period (T 1125.45-50).

92. [676]

    Ivana Cassaniti denied that Gino Cassaniti was the senior person in the firm up until his bankruptcy but accepted that Gino Cassaniti was the person who introduced clients to the firm (T 1125.20-30). She was adamant that she had very little to do with Banq’s business from 2010 and that she was at home.

93. [677]

    During cross-examination (at T 1118.36-47), Ivana Cassaniti accepted that she was a signatory to two bank accounts of Banq (its general business account and its trust account) (not, as I understand her evidence, the Banq Maximiser account) and that she “might have done some” bank reconciliations during the years 2011 to 2013 (T 1119.40-45). (At Table F of the plaintiffs’ closing submissions is a schedule prepared by the plaintiffs of bank accounts on which Ivana Cassaniti was a signatory.) Ivana Cassaniti denied that she was aware that from 2011 to 2013 Banq would make substantial payments or transfers of money out of its bank accounts (T 1118).

94. [678]

    In relation to Givana Prestige, Ivana Cassaniti’s evidence in her first affidavit was that: it was set up in around 2009/10 to hold a car dealership licence at which time the company was dormant (11 April 2019 affidavit at [12]); no business was undertaken while she was a director ([12]); in 2009, she met Frank Criniti through Gino Cassaniti but she had no real involvement with him other than socially ([11]); in late 2011, Givana Prestige was taken over by Frank Criniti so that he could operate a car dealership business (18]); from sometime in late 2011 she did not have anything to do with the company ([20]); and she did not authorise or allow any transaction to take place relating to Givana Prestige ([22]). (It emerged during Ivana Cassaniti’s cross-examination by Peter Abboud’s solicitor, that a bank account had been opened by Gino Cassaniti on behalf of the company, and that Ivana Cassaniti had apparently sent some emails to the bank to effect some of the transfers from that account (see below).) Ivana Cassaniti’s evidence was that she transferred the shares to Frank Criniti for nothing following Gino’s request, as the company had no income or money and therefore no worth (11 April 2019 affidavit at [18]).

95. [679]

    In relation to the Givana Prestige transactions (see at T 1150-1151), Ivana Cassaniti denied knowledge of the payments totalling $969,185, itemised in the Diamondwish pleadings. She agreed that she was the only signatory to the Givana Prestige bank account in 2011 but did not accept that bank account transactions out of that account could not occur without her authorisation (T 1150.35-40). Her evidence in that regard was that she had no explanation for how a bank account transaction by payment out could have occurred without her authorisation but was adamant that “I know that I couldn’t, there is no chance that I could have transferred this amount of money” (for the reasons that, first, she said she had no idea that the money came in and, second, that she had a $20,000 daily transfer limit so she needed permission from the bank for anything over $20,000).

96. [680]

    Ivana Cassaniti accepted that she could organise an “RTGS” (i.e., a transfer directly through the bank), and could not explain how someone not a signatory to the account could do so, but she was adamant that she had not authorised the payment in question out of Givana Prestige’s bank account. Ivana Cassaniti gave similar evidence as to the other impugned payments made to Givana Prestige’s account in December 2011 and March 2012 (T 1154, T 1161). She did not recall receiving Givana Prestige’s bank statements but accepted that it was possible that she did (T 1154).

97. [681]

    Cross-examined about the circumstances when she ceased to be a director of Givana Prestige (see T 1164), Ivana Cassaniti’s evidence was that her understanding was that at some point Frank Criniti was to take over the company. Tellingly, she points to Gino Cassaniti’s role in this, saying:

98. [682]

    Ivana Cassaniti accepted that at the time she was a director of the company she regarded herself as having the responsibilities as a director of the company, but her response then was that the company did nothing (T 1165.25-30). She said that at the time she was a director the company did not operate a bank account. Her evidence was that the purpose of incorporating the company was to trade in luxury motor vehicles (on the basis that that was why Gino Cassaniti had asked her to incorporate the company and be the director and shareholder) but that under her directorship the company did not trade.

99. [683]

    I have referred above to the cross-examination of Ivana Cassaniti by Peter Abboud’s solicitor, in which her attention was drawn to a bundle of emails apparently sent from her Banq email address in December 2011 to January 2012 to instruct Givana Prestige to make certain of the impugned transactions (see at T 1191-1192). Senior Counsel for Ivana Cassaniti described this as an ambush. Ivana Cassaniti accepted that the emails came from her email address but her evidence was that she did not recall sending the emails (which included an email requesting transfer of moneys from Givana Prestige to Auswide). Ivana Cassaniti was adamant that she had never denied that she could transfer moneys out of the account but said that she could not transfer by logging in; and that she did not recall contacting the bank on those days. Ivana Cassaniti suggested that the emails could have been sent by “anybody in the office jumping on [her] computer” (T1192.9). (Pausing here, that evidence is lent credence by the existence of at least one email in which Gino Cassaniti appears to have sent instructions to the bank purportedly on behalf of his wife.)

100. [684]

     In re-examination (see T 1199-1200), Ivana Cassaniti accepted (having looked at the documents overnight) that they appeared to have come from her email address; and said that it was possible that she had sent them (but she did not remember doing so). Her evidence was that if she had requested those transfers it could only have been that someone had directed her to do so (T 1201).

101. [685]

     Ivana Cassaniti said that she had no recollection as to the opening of the Givana Prestige bank account; her only explanation for the opening of that account being that somebody had asked her to do so. Similarly, she had no recollection as to the closing of the account (simply speculating that Gino Cassaniti may have asked her to do so – T 1203.30).

102. [686]

     As to her acceptance in cross-examination that she may have “instructed” Peter Abboud to do certain things, Ivana Cassaniti said that by “instructed” she meant asked and her evidence was that she had not ever been in a position to command Peter Abboud to do anything (T 1203-1204).

103. [687]

     In her affidavit sworn 3 March 2020 at [12], in respect to the Givana Prestige bank account with account number ending in #4642 (see also Ex S), Ivana Cassaniti said that she was not aware that this account existed until these Proceedings commenced.

104. [688]

     Ivana Cassaniti denied any knowledge of the impugned payments into or out of Givana Prestige (see, for example, at T 1150.20; T 1158.37; T 1160.16; T 1161.1; T 1161.14; T 1161.16; T 1162.7). She appeared to accept (at T 1162.16) that a transfer by RTGS required her authorisation; and agreed (at T 1163.25) that if she was the only signatory to the account then she was probably the only person who could sign a cheque on the account but added that “[t]hat doesn’t mean I recall signing it or knowing anything about it”. (Ivana Cassaniti also made the comment, at T 1164.5, that there were a few “Givana” companies.)

105. [689]

     In relation to Discobell, Ivana Cassaniti’s evidence in her first affidavit was that: it was set up to invest in a Criniti restaurant in Castle Hill (being a restaurant related to Frank Criniti) ([21]); Ivana Cassaniti authorised “some transactions in the investment in Criniti Castle Hill”, referencing a bank statement of Discobell showing certain transactions (albeit that those were in respect of a different account from that in which the impugned Discobell transaction occurred) ([23]); and that the transactions attributed to Discobell in the pleadings were not authorised by Ivana Cassaniti nor did she have knowledge of those transactions ([24]).

106. [690]

     In her 3 March 2020 affidavit, Ivana Cassaniti deposed that she was only aware of the bank account annexed to her April 2019 affidavit because it was one of the Discobell accounts to which she had internet access (at [14]). Ivana Cassaniti there corrected her earlier evidence and deposed that, having looked at the transactions more carefully, she did not believe that she had authorised any of those transactions (contrary to her earlier belief). Ivana Cassaniti explained in her 3 March 2020 affidavit that, since the Proceedings commenced, she became aware that she was the signatory on other Discobell accounts but that she has no recollection of those accounts or the circumstances under which she became a signatory ([14]).

107. [691]

     In relation to the $155,000 Discobell transaction (see at T 1138), Ivana Cassaniti said she had no idea what that payment was about and denied that she knew that this amount was coming to Banq through her company (Discobell) at the time. She said:

108. [692]

     Ivana Cassaniti accepted (T 1141-1142) that she was a signatory to the Consolidated Wealth bank account and to the Discobell bank account but maintained her denial that she knew anything about the $155,000 transaction.

109. [693]

     The plaintiffs submit that Ivana Cassaniti was a vacillating and unsatisfactory witness, pointing in particular to two matters said clearly to demonstrate this. First, Ivana Cassaniti’s attempt in her third affidavit to “clarify” matters in her first two affidavits. It is noted that all purported “clarifications” were exculpatory. It is said that no explanation was even attempted as to how any matters in her first two affidavits (prepared by her solicitors) came to be in error (i.e., whether her instructions were misunderstood or that she did not carefully read and consider the contents of those affidavits). It is noted that the second affidavit was prepared in answer to affidavits of other witnesses, paragraph by paragraph, and reveals pointed consideration and responses. Second, Ivana Cassaniti’s denial of knowledge of the banking transactions of Givana Prestige. It is said that the emails in Ex 15 reveal the extent and gravity of her dissembling in her answers in cross-examination. The plaintiffs submit that her evidence (where it is contested) should not be accepted unless it is independently corroborated.

110. [694]

     The plaintiffs maintain that Ivana Cassaniti was a very active participant in the transactions of Discobell and Givana Prestige, respectively, regarding Bluemine and Diamondwish; and that, if any of the relevant transactions were genuine, Ivana Cassaniti has had every opportunity to explain that. They say that, instead, in her cross-examination Ivana Cassaniti “embarked upon a course of denials, absence of recall, dissembling and lies”, particularly regarding Givana Prestige, but no less so regarding Discobell’s transactions.

111. [695]

     The plaintiffs say that Ivana Cassaniti was an unsatisfactory witness; that she was not frank; that she feigned not remembering; that she falsely sought to rely on non-involvement in the business of Banq; and that she lied. It is submitted that Ivana Cassaniti gave false evidence about alleged non-involvement in the Givana Prestige transactions when, on the whole of the evidence now available, it was clear that she was in fact involved in those transactions. It is noted that Ivana Cassaniti denied any knowledge of the payments by Diamondwish to Givana Prestige of $969,185 (see T 1150.20) those payments being at a time when Ivana Cassaniti was the sole director and sole signatory to the Givana Prestige bank account. It is submitted that Ivana Cassaniti was fully aware of, but deliberately failed to reveal, the true basis of each payment in and each payment out of Givana Prestige; and that she knew that the transactions in their entirety were for no benefit of Diamondwish. The plaintiffs point to the absence of any genuine commercial documentation for the transactions.

112. [696]

     The plaintiffs say that Ivana Cassaniti’s evidence to the effect that Givana Prestige was a dormant company and did not trade while she was a director was false (see below re the licence renewal).

113. [697]

     The plaintiffs say that Ivana Cassaniti’s denials of knowledge of Givana Prestige’s banking transactions, that it conducted no business, and that she did not “authorise, delegate or allow any transactions to take place relating to Givana Prestige” were, on the evidence, patently false to her knowledge. The plaintiffs accuse Ivana Cassaniti of having lied to the Court.

114. [698]

     It is said that, contrary to her express denials, Ex 15 contains email instructions from Ivana Cassaniti to an NAB bank officer to make transactions about which she has denied any knowledge. The emails contain: the 19 December 2011 transfer from Givana Prestige to Auswide of $68,964.60; the 20 December 2011 transfer from Givana Prestige to Auswide of $653,898; the 6 January 2012 transfer from Givana Prestige to Auswide of $363,000; the 9 January 2012 transfer from Givana Prestige to Auswide of $122,943.29; the 9 January 2012 transfer from Givana Prestige to Diamondwish of $330,056.71; and the 17 January 2012 transfer from Givana Prestige to GR Munoz of $60,000).

115. [699]

     The plaintiffs point to the comments of a personal nature appearing in some of the emails to NAB as indicating that it was Ivana Cassaniti making those communications and giving those instructions and they say that it is not open to Ivana Cassaniti to deny that.

116. [700]

     The plaintiffs say that Ivana Cassaniti would not have instructed those payments out of Givana Prestige in the absence of knowledge of the payments being made into Givana Prestige, and that she must have known at all relevant times that the account had sufficient funds for the bank to make the transfers that she was requesting. The plaintiffs contend that Ivana Cassaniti undoubtedly knew the sources of the funds paid in (including from Rackforce).

117. [701]

     As to the attack on her credit in relation to the NAB bank emails (Ex 15), for Ivana Cassaniti it is accepted that this called into question the reliability of Ivana Cassaniti’s evidence that she had not carried out any of the Givana Prestige transactions before Frank Criniti took over the company. However, it is submitted that ultimately her credit was vindicated. It is emphasised that she did not deny sending the emails – rather, her evidence was that she did not recall doing so but that she accepted that on their face the emails came from her email address.

118. [702]

     It is said that Ivana Cassaniti’s evidence had always been that she had no recollection of making any of the transactions from the Givana Prestige and it is submitted that, given that it was more than eight years after the event that she swore her first affidavit and nine years after the event that she was cross-examined about this, it would be surprising if her evidence were otherwise. It is said that Ivana Cassaniti properly accepted that it was possible that she sent them; and that the tenor of her evidence (that she never regarded the money that came into Givana Prestige as hers, but Frank Criniti’s, and that she had no involvement in making the transactions) was later corroborated by the production of contemporaneous documents by Ivana Cassaniti, called for after her cross-examination (see Ex 16); including an email from Gino Cassaniti to the NAB asking for the bank account to be opened for Givana Prestige (into which email Ivana Cassaniti was not copied). It is said that this corroborated Ivana Cassaniti’s evidence that she had no recollection of opening a bank account for Givana Prestige, but if she was involved, somebody would have asked her to do so.

119. [703]

     Further, it is noted that amongst Ex 16 were emails from Gino Cassaniti to the bank in which he asked for large transfers to be made, which are the subject of the Givana Prestige Transactions, on the account, notwithstanding that he was not a signatory. It is said that these emails make it clear that Ivana Cassaniti’s role (assuming that she sent the emails that appear to have come from her office computer) was no more than an administrative one in making payments that others had asked her to make without any knowledge of what the payments were for, beyond that it had to do with Frank Criniti’s motor dealership (which understanding it is said was also confirmed by Ex 16 which contained an email from Frank Criniti requesting the Givana Prestige logo on 15 December 2011 from Fred Khalil and Gino Cassaniti).

120. [704]

     For Ivana Cassaniti, it is submitted that the documents in Ex16 also explain Ivana Cassaniti’s lack of recollection about the Givana Prestige bank account and transactions before she was shown the documents in Ex 15. It is said that, not herself having opened the account, and the account having been conducted at times by Gino Cassaniti, and otherwise in relation to transactions concerning Frank Criniti’s business interests, it was natural that Ivana Cassaniti should hold the view that, because Givana Prestige had never traded and was a dormant company, it could not have had a bank account nor could she therefore have authorised transactions on such a bank account.

121. [705]

     In Ivana Cassaniti’s reply submissions, responding to the serious allegations made by the plaintiffs against Ivana Cassaniti’s credit based on the emails in Ex 15, it is said that (even if it is assumed against Ivana Cassaniti that the emails in Ex 15 show, objectively, both that she was aware of the account and that she authorised the transactions referred to in the emails) there is a significant leap between concluding that her evidence is incorrect and concluding that she deliberately lied in giving that evidence.

122. [706]

     Ivana Cassaniti argues that there is room to debate what is meant by “authorise, delegate, or allow any transaction to take place relating to Givana Prestige Pty Ltd” (the wording in Ivana Cassaniti’s 11 April 2019 affidavit at [22]) and whether Ivana Cassaniti’s involvement in sending the emails shows that she was relevantly “aware” of any particular bank account. However, even on the assumption that the emails show that Ivana Cassaniti’s affidavit evidence was incorrect, it is submitted that there is the obvious possibility that in her evidence some eight and nine years after the events, Ivana Cassaniti’s recollection was simply unreliable; and that the explanation that Givana Prestige was dormant and never traded provides an obvious explanation as to why Ivana Cassaniti might, wrongly, conclude that the company never had a bank account. It is said that, given that Ivana Cassaniti was a signatory on a number of accounts over a number of years, her recollection as to this particular account would be remarkable unless she were given documents to refresh her memory.

123. [707]

     Further, it is submitted that, if Ivana Cassaniti’s evidence was a deliberate lie, then it was a significant gamble for her to give that evidence if, as matters turned out, there were contemporaneous documents to show that she was the signatory on the account and had given the bank emailed instructions to make transfers on the account; all the more so if those contemporaneous documents would be in the possession of a third party (NAB) and subject to a subpoena from the plaintiffs (as in fact occurred).

124. [708]

     It is submitted that Ivana Cassaniti’s imperfect recollection of these emails, more than eight years earlier, does not point to her deliberately lying to the Court. It is said that is no attempt by the plaintiffs to grapple with the fact that the contemporaneous documents showed that Gino Cassaniti, alone, was responsible for the account being opened in December 2011 and that he himself caused emails to be sent to NAB requiring transactions on the account, notwithstanding that he was not a signatory. Both of these matters are said to provide an explanation as to why Ivana Cassaniti held the view that she was not aware of the account and did not authorise transactions on the account.

125. [709]

     For Ivana Cassaniti, it is submitted that her credit was not impeached in the cross-examination by Senior Counsel for the plaintiffs: that she answered all questions directly and did not attempt to avoid the questions put to her. It is said that Ivana Cassaniti made appropriate concessions and did not blindly challenge everything put to her.

126. [710]

     It is accepted that, in assessing Ivana Cassaniti’s credit, a distinction must be drawn between the evidence she gives in relation to her husband, on the one hand, and on other matters, on the other hand. In relation to the former, it is accepted that, as Ivana Cassaniti is the wife of Gino Cassaniti, any exculpatory evidence she might give in respect of her husband would be treated with some caution (particularly where her original evidence sought to distance Gino Cassaniti from the business, though it is said that it is to her credit that she corrected and clarified that evidence before making herself available for cross-examination).

127. [711]

     However, it is said that Ivana Cassaniti’s evidence that she had no knowledge at all of a Scheme or any breaches of duty should be accepted (and that it should be accepted that if she did play any role in facilitating the Scheme, she did so unwittingly). It is said that there is no contrary evidence that points to the fact that Ivana Cassaniti did have the requisite knowledge; and it is noted that those whose interests are served by suggesting that Ivana Cassaniti played a significant role in the running of Banq did not make themselves available to be cross-examined.

128. [712]

     I considered Ivana Cassaniti to be a credible witness. Her account of events (particularly that her role in Banq was only an administrative one) is consistent with her lack of professional qualifications as an accountant; and with the recollection of Frank Criniti that she did not have an office but sat, in effect, “with the office girls”. It is quite plausible that Ivana Cassaniti held the roles that she did, as director or shareholder of companies associated with Banq, at the direction of Gino Cassaniti (whether, at the outset, for the purpose of asset protection on his part or, later, because he was a bankrupt). It is in my opinion significant that none of the Banq clients has suggested that Ivana Cassaniti gave any tax or business advice as to the structuring of companies or the like; her role being consistently described in terms of administrative tasks (such as chasing debtors or reconciling accounts) and even the evidence as to authorisation of transactions appears to have been to facilitate the transactions rather than to approve entry into the transactions. It seems to me to be telling that Ivana Cassaniti (as per her evidence in relation to “handing over” Givana Prestige) was apparently content to act on her husband’s instructions or directions as to what was to be done in relation to one or more of the companies with which she was associated.

129. [713]

     I do not accept that Ivana Cassaniti was lying in the witness box as to her role in the relevant companies. It is plausible that she did not recall the email communications in relation to banking directions; that she did not recall all of the bank accounts on which she was a signatory; and that she did not recall the signing of a licence renewal application in relation to a company in respect of which it is not suggested she personally carried on any motor vehicle dealership transactions. Ivana Cassaniti’s evidence in the witness box (and it is not insignificant that, unlike her husband, she made herself available to be cross-examined) was given in a calm and unflustered way – even when she was shown documents inconsistent with her recollection of events; and I accept that Ivana Cassaniti made appropriate concessions. Moreover, her evidence is significant in that it squarely points to Gino Cassaniti having a more significant role in Banq than he accepts he did – and hence, ultimately, she did not seek to shield him in that regard. I considered Ivana Cassaniti to be a truthful witness, albeit with an imperfect recollection of events (which would not be surprising if she was mainly acting on the direction of her husband).

130. [714]

     Tanya Borg attested (at [24] of her affidavit sworn 4 December 2018), that in or around 2012, she and her husband, Michael Borg, were referred to Banq and met with Fred Khalil. During the course of her cross-examination, Tanya Borg was unable to give any useful recollection of the participation she or Michel Borg had at that meeting (see T 1383.19-40).

131. [715]

     At [48] of her affidavit sworn 4 December 2018, Tanya Borg deposed that “Fred and other employees at Banq, provided more than accounting advice in that they were also business advisors and were involved in our industry. They also assisted with things like workers compensation, audits, client audits, client and industry contacts and payroll tax matters. Eventually, Fred also recommended to us that we outsource our workers to various companies controlled by him”. Tanya Borg’s evidence was that Borg Civil became very reliant on the advice of Fred Khalil and Banq (at [49]).

132. [716]

     Tanya Borg deposed (at [75] of her affidavit sworn 4 December 2018) that the backup file for MYOB was sent to Banq and that she understood that Banq “made any changes or adjustments they thought necessary”. In her second affidavit sworn 27 February 2020, Tanya Borg (at [13]) deposed that:

133. [717]

     This is corroborated to an extent by reference to an email exhibited to Tanya Borg’s affidavit sworn 27 February 2020 in which Tanya Borg asks of Banq, whether it had finished with the Borg Family MYOB and, if so, could the new version be sent through to her.

134. [718]

     Tanya Borg’s evidence in cross-examination was that: she was aware that the transactions (transferring the equipment from Excavations to Borg Family) were intended to appear to be arms-length; Excavation was indebted to her husband Michael Borg for the equipment (he had originally purchased the equipment which had been transferred to Excavation and there was a purported loan agreement between Michael Borg and Excavations evidencing the debt); the reason that Borg Family did not pay Excavation directly for the equipment was that it had been advised to do it through RCG CBD by Fred Khalil; Fred Khalil was the one who could explain it, but she did not understand why the transfer had been done that way (T 1384-1386). Asked in cross-examination, why Borg Family did not simply pay Excavation for the equipment Tanya Borg was unable to explain why the transaction was done the way that it was; conceded that the purpose of getting an independent valuation for the equipment was to establish an arms-length transaction (but then said she did not know what an arms-length transaction was). In response to questioning about the loan in detail, Tanya Borg said “Fred should be able to tell you that, because he looked after that” (T 1386.1-5).

135. [719]

     As to Tanya Borg’s evidence, the plaintiffs point out that Tanya Borg had almost completed her accountancy training at the time of the relevant events and that, by the time of giving evidence, she had then at least 6 years’ experience as a trained accountant; and that she was held out as such in the business that she conducted with her husband, Michael Borg. It is submitted by the plaintiffs that her contentions that she had only superficial knowledge of taxation principles (income tax, GST) and of basic accounting systems (cash book, ledgers, profit and loss) are not to be believed.

136. [720]

     The plaintiffs say that Tanya Borg was seeking to distance herself as far as possible from the real basis for the transactions (by contending that it was all on Fred Khalil’s advice and that she did not understand what was happening), and from the accounting records which the plaintiffs say demonstrate that: the purported arrangement involving RCG CBD was never fulfilled; and the taxation (GST and depreciation) treatments were false, including the receipt of GST refunds for supposed (but to her knowledge false) entitling expenditure.

137. [721]

     In that regard, it is submitted that any person conducting basic business transactions has everyday experience of the formats and purpose of invoices, both as between traders and also for GST purposes (that a creditor vendor issues invoices to the debtor, the debtor makes the payment including GST, and the creditor pays the GST element on to the ATO). It is said that Tanya Borg would not genuinely deal with questions in cross-examination about the use of RCTIs. The plaintiffs contend that it was obvious that (to Tanya Borg’s knowledge) supposed GST payments by Borg Family would never be paid on to the ATO, yet: Borg Family claimed and received “refunds” for those GST payments; the full “invoice” payment including GST was paid not to the supplier/creditor but to a third party (RCG CBD); and RCG CBD then paid an equivalent sum to Borg Family.

138. [722]

     The plaintiffs point out that an RCTI scheme can only operate between traders in a group, pursuant to a prescribed agreement, and in circumstances where, ultimately, the GST element will be paid to the ATO. It is said that Tanya Borg could not have genuinely believed that Borg Family could lawfully issue RCTIs, as it did in these transactions.

139. [723]

     It is noted that Tanya Borg in her affidavit is silent as to why Excavation was wound up or the advice Fred Khalil gave her and Michael Borg concerning the need for the name change or the need to liquidate Excavation.

140. [724]

     The plaintiffs accuse Tanya Borg of obfuscation in her evidence as to her dealings with Fred Khalil.

141. [725]

     In particular, it is noted that Tanya Borg’s evidence is that she never enquired of Fred Khalil as to whether any of the money had been paid by RCG CBD to Excavation (T 1366.41). Tanya Borg did not agree with the proposition that this was because she did not expect it to be paid to Excavation (T 1366.43). Tanya Borg said that she did not know if there was evidence of payments going to Michael (T 1368.2). The plaintiffs say that Tanya Borg’s evidence (at T 1368.3-20 – that “You need to ask Fred. I don’t know”) was obfuscation. It is noted that, after an objection and when the question was restated by me as being that she “is not aware of any Borg Family repayment to Michael”, Tanya Borg answered as follows “[i]n this time, no” (T 1369.1-17).

142. [726]

     When asked why Borg Family had not simply paid $585,000 to Excavation, Tanya Borg’s response was that “Fred instructed us to do it with this” (see at T 1369.26) (a response characterised by the plaintiffs as being her “stock defensive response”). When asked about the $575,000 being paid by RCG CBD to Borg Family, it is said that Tanya Borg avoided giving a direct answer (“[t]o be honest we didn’t question it. He was advising us ...” – see at T 1369.37-41) and then (at T 1370.7) that she adopted her “standard fall-back position”, when saying that “I honestly did not understand the transaction”.

143. [727]

     Complaint is made that Tanya Borg would not at first give an answer to the simple question as to whether any procedure “or system” was set up for payments of money to Michael Borg (at T 1370.9-27, her answer was “I don’t know. I was just advised that there was – obviously Michael was going to get paid”). The plaintiffs say that the question was straightforward and simple for a qualified accountant to answer but that Tanya Borg again obfuscated. Further, as to her statement that “obviously Michael was going to be paid”, the plaintiffs point out that this did not happen (and they say that Tanya Borg plainly knew that). The plaintiffs note that, repeatedly, Tanya Borg said that “Fred instructed” what was to be done (see for example at T 1369.26).

144. [728]

     It is said that another disingenuous response throughout Tanya Borg’s evidence was that she did not understand the transaction, or that she did not understand the questions about the transaction. The plaintiffs emphasise this in the context of her 4 December 2018 affidavit in which she deposed at [34]-[35] that:

145. [729]

     The plaintiffs say that, having understood that much, it was evasive and disingenuous for Tanya Borg repeatedly to contend in the cross-examination that she did not understand the transaction, when all she was being asked was whether payments had been made to Michael Borg and whether she had enquired as to that (referring, for example, to T 1370.7).

146. [730]

     The plaintiffs say that Fred’s “advice” (T 1369-70) that she said in her affidavit that she understood (i.e., that money would be paid to RCG CBD and held by it to pay money to Excavation and then the money would be returned to pay moneys owed to Michael Borg – see at [35] of her first affidavit), was not followed. It is submitted that Tanya Borg’s “practised response” that “it was on Fred’s advice” falls down because no payments were made to Excavation, the money was not “returned” and there was no repayment to Michael Borg.

147. [731]

     The plaintiffs say that Tanya Borg’s evidence as to the Excavation transaction demonstrates that Banq was pivotal in orchestrating a scheme which included extracting assets from a company about to be wound up, without payment for those assets. It is noted that neither Gino Cassaniti nor Fred Khalil gave evidence about this matter and that the Borg Parties did not seek to cross-examine or subpoena either of them. The plaintiffs say that it is to be inferred that any such evidence would not have been favourable to the Borg Parties.

148. [732]

     The Borg Parties, to the contrary, contend that Tanya Borg’s evidence was coherent, cogent, measured and should be accepted as truthful.

149. [733]

     In particular, it is said that, in cross-examination, Tanya Borg’s demeanour was not one of evasion or argumentation; that she refuted directly (rather than unduly defensively) the questions put to her, making concessions wherever appropriate; and that she deposed honestly and cogently to her knowledge and understanding of the impugned transactions. It is said that Tanya Borg’s evidence of the course of events (including the change in approach advised by Fred Khalil and subsequent payments to Excavation) is supported by the documents in evidence (including by cheque butts) and the logic of events; and that the plaintiffs’ assertions in relation to her credit ought to be rejected.

150. [734]

     The Borg Parties refer to three matters that they say point strongly to the veracity of Tanya Borg’s evidence.

151. [735]

     First, that the plaintiffs largely focused attention on three transactions which occurred in a context of a larger number of payments that are not in any way impugned by the plaintiffs. It is said that the relevant transactions were justified by Fred Khalil by reference to what is said to be an unexceptional form of asset preservation (namely, separating ownership of the assets from the risk of business loss by the imposition of a company, in this case Borg Family), pointing to the evidence as to Fred Khalil’s advice that the “structure” of the Borg business entities was wrong and that he would set it up for her. It is said by the Borg Parties that the transactions that occurred immediately after the impugned payments (a sale of assets by reference to a valuation undertaken by a reputable valuer (Hymans), which cost about $10,000) point to a pattern of lawful and unexceptionable conduct. The Borg Parties argue that there is nothing to explain why, if (as the plaintiffs allege) the Borg Parties were motivated by a desire to defraud the Commonwealth, they would not have been similarly motivated to enter into other such transactions (noting that it is common ground that there were no further impugned transactions). It is said that this anomaly is all the more curious when the costs of participating in the alleged Scheme outweighed the benefits.

152. [736]

     Second, as explained further below, that Borg Family had its tax assessed on the accrual basis, which it is said supports the Borg Parties’ defences and Tanya Borg’s evidence.

153. [737]

     Third, that Tanya Borg was at the relevant time a young woman, with a number of jobs and a young family, and who (while studying commerce and business) gave evidence that her focus on the day to day was on “customer relationship” and invoicing (T 1385). It is said to be objectively likely, in these circumstances, that Tanya Borg placed reliance on Fred Khalil; and equally likely that such reliance, in her circumstances, would make her more trusting and less questioning than might otherwise be expected. In other words, it is said that conduct which might bespeak knowing involvement in a breach of fiduciary duty is, in this case, equally consistent with trusting reliance on a professional adviser (a fortiori, where the underlying transaction is unexceptional – i.e., invoking a corporate shield to protect the family assets).

154. [738]

     The Borg Parties say that it is incorrect for the plaintiffs to contend that Tanya Borg provided no explanation of the transactions (cf the plaintiffs’ submissions, for example, at [662]-[664]; [1163]). It is noted that Tanya Borg made herself available for cross-examination and gave extensive explanations as to the circumstances in which the RCG CBD transfers took place and what happened next. It is said that, when looked at in its entirety, the facts in this case (as set out in the chronology of events above) are only rationally consistent with Tanya Borg’s explanation of the way that events unfolded. In particular, the Borg Parties say that the assertion that Borg Family paid nothing to Excavation does not withstand the force of the primary documents (cf the plaintiffs’ submissions at [1163]).

155. [739]

     As to the attack on Tanya Borg’s credit based on her denials as to her knowledge and understanding of the effect of the transfers to and from RCG CBD, it is noted that Tanya Borg’s evidence was that (while she was clear about the overall purpose of the restructure and was aware of the fact that RCG CBD was to hold the moneys it was paid to pay money to Excavation) she did not know the reason why moneys had been paid to RCG CBD or its taxation or other consequences (see for example at T 1384.36). It is said that Tanya Borg was not shaken as to that important distinction; and it is submitted that the fact that she maintained that position even where she was presented with opportunities to adopt self-serving suggestions made to her by Fred Khalil’s Counsel (see below), vindicates her credit.

156. [740]

     As to criticisms by the plaintiffs concerning Tanya Borg’s credit, where those criticisms were not put to her in cross-examination (and to which she was not given an opportunity to respond) reference is made to what was said in Kuhl v Zurich Financial Services at [62]-[64] per Heydon, Crennan and Bell JJ (reference also being made to Lorrimar at [101], [104]).

157. [741]

     The Borg Parties say that, in the circumstances, Tanya Borg’s evidence would be accepted as genuine and truthful; as would be Tanya Borg’s explanation of the transactions between Borg Family and Excavation, especially given that it is supported by the primary documents in evidence and the logic of events.

158. [742]

     While I accept that there is force in the criticism that Tanya Borg adopted a standard defensive answer (to the effect that everything was done on Fred Khalil’s advice), I considered her to be genuine in her lack of any real understanding of the reason behind the impugned transactions. (To my mind, that assists the plaintiffs’ overall case insofar as they maintain that there was no genuine commercial purpose to the transactions – hence, it is unsurprising that Tanya Borg would be unable to proffer an explanation for them.)

159. [743]

     My impression of Tanya Borg as a witness was that she was genuinely confused or at cross-purposes at times in cross-examination, and that she became frustrated at what she clearly perceived to be a lack of understanding or appreciation of what she saw as her very limited role in the transactions. See, for example, the following, in the course of cross-examination by Fred Khalil’s Counsel (T 1385.40-1386.4):

160. [744]

     Overall, I considered Tanya Borg’s evidence not to be implausible; and more likely to reflect an inadequate or superficial understanding of the accounting and tax treatment of the transactions than an attempt to misrepresent the transactions.

161. [745]

     Mario Sande was part of an associated group of Scheme Participants (including former defendants Statewide Printing, State Wide Design, Richard Attard and Michael Sande) referred to as the Statewide Parties. It is said that Mario Sande was the controlling mind and will of Statewide Printing and State Wide Design (by reference to ASIC extracts, Ex K at 30247 and 32166, and his own evidence at T 766.40 and T 767.15).

162. [746]

     Mario Sande’s evidence was to the effect that: in 2012 and 2013 he variously dealt with Peter Abboud, Fred Khalil and Gino Cassaniti (T 770.20-35); Banq was the external accountant for Statewide Printing and State Wide Design; Banq did annual accounts, profit and loss statements, tax returns, quarterly GST returns and were the Statewide Printing Group and State Wide Design & Print’s corporate tax agents (T 769.15-769.46; Ex K at 31684, 32172); and Banq had access to the companies’ MYOB system (T 769.45-50).

163. [747]

     Mario Sande’s evidence, in relation to the impugned Statewide transactions from November 2012 was to the effect that one of Peter Abboud, Fred Khalil or Gino Cassaniti advised him to open another bank account to implement those transactions (at T 776.28-T 776.40). At T 777.11-16, Mario Sande’s evidence was that, he was advised by Banq as to all the payments when they were made and the amount that was to be paid.

164. [748]

     In relation to the transactions identified in the RCG CBD third further amended statement of claim at [144.7]-[144.7.3.3], Mario Sande confirmed (at T 784.50-T 785.10) as correct his previous answer at the examination hearing before Registrar Hedge to the effect that the payments were going around in a circle and that this was done as advised by Banq Accountants.

165. [749]

     In relation to various invoices and payments, Mario Sande’s evidence was to the effect that: the amount of the payment was determined on each occasion by Banq Accountants (T 778.30) from one of Gino Cassaniti, Fred Khalil or Peter Abboud (T 779.5); he would receive an invoice via fax or sometimes via email or it would be dropped off to him in person from the accounting firm (T 778.33-38); payments were on occasion prompted by Peter Abboud (T 779.33-780.19); no services were provided by RCG CBD to State Wide Design and Statewide Printing for invoices that it received (T 779.16-31); and further that there was no agreement between either of State Wide Design or Statewide Printing and RCG CBD for the provision of any services (T 785.16-20). The plaintiffs say that Gino Cassaniti organised the payments for these transactions, just as he said he would.

166. [750]

     Mario Sande’s evidence, in respect to the tax benefits that his companies received (at T 777.18-778.27) was that he now knew that the transactions that would be entered into the accounts as legitimate transactions were not in fact legitimate transactions but that he did “not really” know this back at the relevant time (he said “I didn’t understand what I was doing or the actual tax laws” and as to what he knew about how the GST scheme was working, he said “I knew something but I didn’t really look into it”). In the verified defence filed for the Statewide companies, it was pleaded that Banq advised and represented that, if the Statewide companies entered a series of transactions, they could “legitimately and legally” channel payments of money between them; and Mario Sande confirmed that he was told that (at T 776.19-4). Consistent with this, when asked what the advice was that he was given, Mario Sande’s responded, “[j]ust to channel legitimately channel my money from company A to company B” (at T 776.4-6).

167. [751]

     Pausing here, insofar as Banq clients received advice that the invoicing arrangements (entered into, some were told, for tax minimisation purposes) were legitimate or lawful, on one view it might be said that they were not on notice of any dishonest design in that regard (and the imprimatur of such advice coming from professional advisers might fortify such a conclusion – see, for example, Turner v O’Bryan-Turner [2021] NSWSC 5 at [234]). However, the plaintiffs argue (and I accept) that where the defendants knew that invoices were being rendered for services that were not genuinely being provided (such as supervision services or management services) then they cannot have understood the transactions to be legitimate (and they refer to what was said by Leeming JA in Hasler v Singtel Optus at [139] in this context). Mario Sande’s evidence (that he “knew something” but did not really look into it) reeks of wilful blindness in this regard.

168. [752]

     Mario Sande gave evidence (at T 767.25-768.6) to the effect that Statewide Printing did not really trade but in 2012 to 2013 it did receive income; and that income was “only from invoicing. From the payment I made, that’s it”. Mario Sande further agreed (at T 768.23-25) that the only income Statewide Printing received was dealing with the matters involving Banq.

169. [753]

     The plaintiffs say that, in circumstances where Gino Cassaniti was a principal of Banq and Mario Sande recalled having some meetings with him about the Scheme (although he could not remember what he discussed with Gino Cassaniti), the overall tenor of Mario Sande’s evidence makes it clear that Gino Cassaniti was involved in these accounting systems for the implementation of the Scheme.

170. [754]

     Mario Sande’s evidence was that, in relation to the arrangement between his two companies and Banq, there would be a fee deducted and he agreed that in every case it was about 10% (T 783.15-20); that if State Wide Design made the payment, what would later come back was that amount of money less a fee (T 783.32-36).

171. [755]

     The plaintiffs say that the payments (recorded in Table 3.4 of their closing submissions) demonstrate that the fee to which Mario Sande referred in his evidence amounted to eleven-tenths of the amount that was returned from the carousel of payments between his companies and RCG CBD.

172. [756]

     There were no adverse submissions made in respect of Mario Sande’s credit (cf the Scheme Participants who remained active parties and in respect of whom it was submitted that there was a clear interest in exculpating themselves and inculpating others). For completeness, I note that although Mario Sande was unable to say with certainty who, of the three accountants at Banq, had given him the relevant advice as to the bank transactions, or as to who he would deal with at Banq, I accept that he had a genuine recollection as to the substance of the advice that he was given.

173. [757]

     Frank Criniti was a defendant in the Diamondwish and Rackforce Proceedings and director of the various Criniti companies. The plaintiffs discontinued their claims against him by a settlement reached in advance of the hearing. Frank Criniti gave evidence in the plaintiffs’ case under compulsion of a subpoena; and was subject to cross-examination.

174. [758]

     Frank Criniti’s evidence was to the effect that Banq implemented the systems that the Criniti companies utilised. At T 464.14-24, he said that it was “[a]lways the three of them, Fred, Gino, or – Fred, Gino or Peter Abboud. Quite frequently they would attend to train the payroll officers and the accounting team that they established downstairs and yeah, that was – that was mainly more Fred and Peter that would do that sort of–”. In respect to payroll, Frank Criniti said (at T 493.14-24) that “[w]hatever payroll done they done according to the directions of Peter Abboud, Gino Cassaniti, Fred Khalil, Banq Accountants. They – the system was set up by them and taught to whoever was in payroll to do accordingly to what they were told to do”. Further, he gave evidence (at T 463.23-40) that for the first two or three years since he began with Banq Accountants in 2009, Banq did everything in the sense of hiring someone in-house for them and he assumed they were doing BAS returns. Frank Criniti’s evidence was that it was something that he did not talk to them about at that time as it was something he was not really interested in or understood. Frank Criniti recalled during that period signing numerous papers provided to him by Gino Cassaniti (T 463.40-50).

175. [759]

     At T 505.30-506.37, Frank Criniti explained that the training by Banq commenced immediately and continued throughout the years 2011, 2012 and 2013. Specifically, he said that Banq trained Vanessa Scuteri and Tarun Shah. As to Vanessa Scuteri, who was in Criniti’s payroll department, Frank Criniti said that Banq trained her on how to do all the wages and, he believed, as to the cash banking procedures.

176. [760]

     Frank Criniti’s evidence (at T 464.35-465.30) was that Tarun Shah was employed by his companies after Peter Abboud and Gino Cassaniti told him that they needed someone in-house and that they had the right guy that was working for a labour hire company who was great. Frank Criniti’s evidence was that they wanted to get Tarun Shah over to work for Frank Criniti’s company so that they could cope with the job; that they suggested Tarun Shah; and that Frank Criniti had never met him before he was employed (as Frank Criniti was overseas at the time). Frank Criniti was not entirely sure in which of his companies Tarun Shah had been employed (see at T 465.09-21, T 579.21-29) (perhaps not surprising when one considers the plethora of Criniti companies incorporated through the auspices of Banq). Frank Criniti said that Banq trained Tarun Shah to deal with payments of bills and to liaise with Banq “when it was tax time, when it was payment time for new fit outs for new restaurants, disbursements of like funds, where they needed to go and be received, how many things needed to be paid, where they needed to be paid from”. Frank Criniti said that the company had investors at the time “[b]eing Banq Accountants” and that funds would be coming in and “Tarun would be looking after all that and paying the builders, [and that] it started to change up where the payments will be made from different accounts” (T 506.21-37).

177. [761]

     At T 468.40, Frank Criniti gave evidence that Banq had in effect total involvement in the accounting of the companies that he described as being the trading, asset holding and labour hire companies that were like a spider web (T 466.45-467.6). His evidence was that Gino Cassaniti, Fred Khalil and Peter Abboud set up the whole structure and that they would engage constantly with accounts and payroll, communicating back and forth on how everything had to be done (at T 469.11-34). His evidence was that the people from Banq were in contact with his Accounts Department daily (at T 470.25).

178. [762]

     In respect of payments out of Diamondwish (pleaded at [100]-[168] of the second further amended statement of claim in the Diamondwish Proceeding), to which Frank Criniti was taken in cross-examination at T 478.43-485.45, Frank Criniti’s evidence at (T 508.35-509.9) was that the usual practice when a payment was to be made out of Diamondwish was that it would always be done under the instruction of Gino Cassaniti; and that the same applied for Rackforce. He said that, for both companies, “[w]e would seek advice for payments as it was that was a normal trend and we would be directed to which accounts are supposed to be paid from, for what” (T 509.1-5).

179. [763]

     Significantly, to my mind, Frank Criniti did not know what Diamondwish’s business was (T 508.10). His evidence was that those entities were set up by Banq (T 499.50, T 501.37, T 503.40 and T 505.23).

180. [764]

     Frank Criniti’s evidence about the appointment of Christopher Cherry as director of Diamondwish (on 16 March 2012) was that he had never met Christopher Cherry in his life; that as far as he was aware Christopher Cherry had nothing at all to do with the conduct of any aspect of the business of Diamondwish; and that he had had a discussion with somebody at Banq about a new director but he did not know who the director was or the director’s name (at T 532.12-28). (For Gino Cassaniti, it is said that neither did Christopher Cherry know the name Gino Cassaniti – see below; though, as I say in due course, the reliability of Christopher Cherry’s recollection is moot – not least because of his admitted heavy drug problem at the time.)

181. [765]

     As to the payment on 21 December 2012 by RCG CBD of $250,000 to Diamondwish and then by Diamondwish to Elle Barikhan of $250,000 on 24 December 2012 (at which time Gino Cassaniti was a director of RCG CBD), Frank Criniti’s evidence (at T 514.8-39) was to the effect that: Gino Cassaniti said that he needed Frank Criniti to make this payment (on behalf of Gino Cassaniti) to Elle Barikhan in South Africa where they were mining diamonds. Frank Criniti said that Gino Cassaniti would have told him where the payment had to come from and that was how it was done. Frank Criniti’s evidence was to the effect that Gino Cassaniti said to him that he wanted to pay money to Barikhan but “then Gino didn’t want to do it and said I had to do it, and this was the way it had to be done. It was done between Gino, Elle and a transaction from the Accounts Department at Head Office” (T 514.20).

182. [766]

     Frank Criniti was taken through each of the transactions pleaded in the Diamondwish and Rackforce statements of claim during his examination in chief. At T 516.49-517.15, Frank Criniti gave evidence to the effect that Diamondwish gave nothing in return and received no benefits for the payments in and out of Diamondwish ([100]-[168] second further amended statement of claim; plaintiffs’ closing submissions at Tables 7.1 to 7.7). Similarly, at T 533.15-534.43, he gave evidence to the effect that Rackforce gave nothing in return and received no benefits for the payments in and out of Rackforce ([76]-[77] of the third further amended statement of claim; plaintiffs’ closing submissions at Tables 9.1 and 9.2). Frank Criniti denied that Rackforce had ever provided or received any management services (see T 534.23-27). (See also his evidence at T 511.06-20, T 516.49-517.14 in relation to Diamondwish; T 534.35-43, T 535.25-37 in relation to Rackforce.) Frank Criniti’s evidence was that those payments were determined by Banq (see at T 518.30).

183. [767]

     The plaintiffs accept that payments for fit-out and the like (see, for example, the reference to Tarun Shah looking after the payments for new fit outs – T 506.21-37) are usual within a restaurant business but note that Diamondwish and Rackforce were never engaged in that (or any other) business.

184. [768]

     Frank Criniti admitted that he was well aware that Diamondwish and Rackforce would likely have taxation obligations, including liabilities for income tax, PAYG and GST; and Frank Criniti gave evidence that he “worked … out eventually” that, as a result of the transactions undertaken in relation to Diamondwish and Rackforce, those companies would have to be liquidated when they could not pay their tax debts. Frank Criniti accepted that the purpose of the payments in and out of Diamondwish and Rackforce (which he insisted were transactions “under my instruction and advice that that was the best thing to do for the company”), and his personal purpose in those transactions, was to enable him and persons and other companies associated with him to obtain tax benefits, that is to get cash generated by his businesses to him and to others tax free. He accepted that he knew that those activities were not honest (T 535-536).

185. [769]

     Frank Criniti’s evidence concerning the winding up of Zagoonda (at T 497.26-32, T 498.22-28) was that:

186. [770]

     Frank Criniti’s reference to the backdating of documents was highlighted when Gino Cassaniti’s Counsel cross-examined Frank Criniti about Zagoonda (to the effect that it ceased operations in December 2008 before Frank Criniti had met Gino Cassaniti). Taken to that chronology, Frank Criniti said (genuinely, to my observation) (at T 548.10):

187. [771]

     The plaintiffs submit that corroborative evidence of the above answer is to be found on an examination of the relevant ASIC extract (Ex K at 72191) and Form 484 (Ex S) in relation to Zagoonda (see chronology of events above at [249]). The plaintiffs point out that Mohamad Irshad Rosunally, who was the director of Zagoonda when it was wound up on 5 January 2010, was also a director of another unrelated company whose creditor’s voluntary winding up commenced in January 2010 and whose registered office was the Banq Address (see Aris Zafiriou’s affidavit sworn 21 March 2017, Annexure B). It is noted that Frank Criniti did not know the directors appointed to various of the Criniti companies (including Aloeseiafi Faanoi) before they were appointed, and that the common link was Banq.

188. [772]

     Frank Criniti’s evidence as to the establishment or operations of Auswide and Peter Abboud’s involvement therein was that Gino Cassaniti had said that Auswide was “to buy and sell motor vehicles and that the reason it was to be done that way was to save money on luxury car tax” (at T 520.10-23). Frank Criniti said that Gino Cassaniti explained that “you’re allowed to buy – with a wholesaler licence you’re allowed to exceed a certain amount of purchasing vehicles in that year. If you don’t have a wholesale licence you – I think there’s a limit on your monthly purchase of cars and you have to pay stamp duty” (T 520.15-20). Frank Criniti said that (at T 520.42-521.02):

189. [773]

     In his evidence in chief, Frank Criniti also gave evidence about various round robin transactions between Auswide and Givana and involving his “Glen” bank account (a bank account in relation to his home mortgage) as to the purchase of a Rolls Royce (at T 528.24-29 and T 530.43-59).

190. [774]

     Again at T 567.37-568.10, Frank Criniti gave evidence that in about December 2011 Gino Cassaniti wanted to shut down Auswide and to transfer the licence to Givana Prestige (Frank Criniti saying that “Gino wanted to shut down Auswide and backdate the director and sell everything from Auswide to Givana so it was done properly and then to transfer the licence from Auswide to Givana”). Cross-examined by Gino Cassaniti’s Counsel (at T 560.45-561.7) as to the transfer of everything from Auswide to Givana Prestige, Frank Criniti was adamant that this was organised by Gino Cassaniti; and, as to the transfer of the dealer’s licence, that the whole thing was Gino Cassaniti’s doing. Frank Criniti said “[t]hat’s why he [Gino Cassaniti] purchased personal vehicles for himself under Givana Prestige”.

191. [775]

     Frank Criniti did not accept the proposition that it was he who wanted to “get rid of Auswide” and that Gino Cassaniti said he had a company that was inactive (to which the dealings licence could be transferred) (T 560.50-561.10). (Pausing there, strictly speaking Givana Prestige was not Gino Cassaniti’s company. Ivana Cassaniti was the sole director. The question as put by his Counsel seems to assume Gino Cassaniti’s control over that company of which he was not a director consistent with the plaintiffs’ assertions as to his control over various of the corporate entities of which he was not recorded as director.)

192. [776]

     Frank Criniti accepted (T 561.9-17) that there was a time when he was buying and selling vehicles (through Givana Prestige, as I understand it) and said that the funds in that account were from the sale or purchase of the vehicles. Frank Criniti accepted that the purpose of Givana Prestige (at T 522.27-31) was “to continue buying and selling vehicles for tax saving purposes and….Operating a motor vehicle business”; and he said (at T 521.25-34):

193. [777]

     The plaintiffs refer to the liquidation of Auswide as illustrative of what they describe as Gino Cassaniti’s propensity to treat companies as “convenient expendable tools” rather than dealing with them as separate legal entities with attendant obligations (referring to Frank Criniti’s evidence at T 521.21-34).

194. [778]

     Frank Criniti denied that he was making any transfers or deposits between the respective companies. Frank Criniti confirmed that he had “visual” over the accounts but said that Vanessa Scuteri (in payroll) and Tarun Shah (in accounts) logged into internet banking using his login details, which he provided to them (T 509.10-26). He accepted (at T 509.31-38) that he had ultimate control over who could log in to the bank accounts of Diamondwish and Rackforce, which he said was “the ultimate control to hand it over to them yes correct”.

195. [779]

     In relation to Discobell, Frank Criniti said (at T 565.38-42):

196. [780]

     The plaintiffs say that Frank Criniti’s evidence should be accepted for the following reasons: that Gino Cassaniti did not give any evidence to the contrary; that, in cross-examining Frank Criniti, Gino Cassaniti’s Counsel relied on the fact that Gino and Frank had not met before 2009; that Gino Cassaniti’s Counsel did not suggest to Frank Criniti that his explanation of how Gino Cassaniti orchestrated the change of directorship before they met was untrue; and that Frank Criniti’s explanation conforms with the evidence recorded on the Form 484 showing that it must have been backdated because the date on which it was purportedly signed by Fred Khalil, was (as put by Gino’s Counsel in cross-examination) before Frank Criniti had met Gino Cassaniti. It is noted that no evidence was led by any of the defendants explaining why the Form 484 was not lodged for nearly a year after it was signed and that it was common for Form 484s lodged by Banq not to be lodged until a considerable time after the forms had purportedly been signed.

197. [781]

     Gino Cassaniti, to the contrary, says that Frank Criniti’s evidence in the plaintiffs’ case must be scrutinised with the utmost care on account that: it was given with the benefit of a certificate against self-incrimination; he was originally a defendant in the Proceedings, together with his immediate family (mother, brother, former wife, his in-laws), and more remote family and friends; he was assessed to tax and penalty on approximately $23 million of understated income but settled with the ATO for a considerable discount; and he settled with the plaintiffs on terms which included that he undertook to answer a subpoena to give evidence for the plaintiffs.

198. [782]

     Pausing here, a number of the witnesses sought s 128 certificates. I do not accept that I can properly draw any adverse inference from this in Frank Criniti’s case or in the case of any other of the witnesses. That would be inconsistent with the very privilege against self-incrimination (see, for example, Clayton Utz v Dale (2015) 47 VR 48; [2015] VCSA 186 at [195]-[196]).

199. [783]

     As to the fact of settlement reached by Frank Criniti with the ATO, again I can draw nothing from that. Litigants may (and in my experience do) settle cases for a variety of reasons – not necessarily on the basis of an admission of liability; and, in any event, Frank Criniti made abundantly clear his feelings as to the litigation and as to why he settled the claims against him in these Proceedings when he was cross-examined and I see no reason not to accept that evidence (see T 541-543).

200. [784]

     The fact that Frank Criniti undertook an obligation to answer a subpoena to give evidence for the plaintiffs takes the matter no further (and his evidence that he was “here to be asked questions and … here to give the truth” – see below and T 539.29 – rang true to me).

201. [785]

     Nor is the fact that Frank Criniti was found to have understated his personal income (or may have led an extravagant lifestyle in relation to his acquisition of motor vehicles) here relevant to his credit.

202. [786]

     For Gino Cassaniti, it is said that Frank Criniti’s evidence was largely self-serving and self-exculpatory. Pausing here, it must be said that there is an element of self-serving or self-exculpatory evidence on the part of all the individual Primary Conspirators (or at least those who served affidavit evidence) in that each sheets blame home to the others). For Frank Criniti, however, there was no need for exculpatory evidence since he had settled with the plaintiffs. That said, I exercise caution in accepting evidence of any of the witnesses who have an interest in painting others as blameworthy.

203. [787]

     It is said by Gino Cassaniti that Frank Criniti’s approach to giving evidence was “largely cavalier, approaching at times, frivolous in nature”, referring in this regard to the following exchange (at T 539.16-37):

204. [788]

     It is said that the exchange at T 539.35-36 amounted to, in effect, Frank Criniti saying “you ask me the right question” and “I’ll give you the right answer that you want to hear”. Pausing here, I do not accept that this was the tenor of Frank Criniti’s evidence at all; rather, and I deal with this further below, I consider that Frank Criniti was there making it clear that he was in the witness box to answer questions truthfully but that he was not inviting an excursus into his personal affairs and he was displaying some emotion or feeling at the events that had led to him being required to give evidence in the matter.

205. [789]

     Gino Cassaniti says that Frank Criniti’s evidence at T 542.10-17 was disingenuous, in that he acknowledged that he was giving evidence under subpoena in the plaintiffs’ cause (T 541.32-34) but disagreed that part of the settlement deal was that he had to agree to give evidence, and then explained that answer as follows (T 542.35-42):

206. [790]

     For Gino Cassaniti, it is said that the clearest example of Frank Criniti striving to give the “right answer” in the plaintiffs’ cause is the series of questions put to him in chief (commencing at T 511.6-513.44 and again at T 516.39-517.14) and his answers to the effect that Diamondwish and Rackforce did nothing to “earn” payments coming into their accounts, nor derive any benefit from payments going out of those accounts. It is noted that in answer to questions from Counsel for Fred Khalil in relation to whether the companies obtained any benefit from the transactions, Frank Criniti said (at T 584), after saying repeatedly that he did not know how he knew there was no benefit without remembering the payments themselves, that “the reality is it just - it makes sense that there was no benefit”. Gino Cassaniti submits that Frank Criniti had simply assumed that was the right answer because that was what “makes sense” and that it incidentally advanced the plaintiffs’ cause.

207. [791]

     I differ in my impression of that evidence. I accept that what weight may be attached to the answer may be affected by Frank Criniti’s lack of memory of the transactions, but his statement that it makes sense that there was no benefit seemed to me to be based on his understanding that the companies in question (Diamondwish and Rackforce) had done nothing in relation to those payments. Hence, his challenge, in effect, to the cross-examiner that “unless there’s a benefit that you can outline for me that I can then understand I’ll agree with you”.

208. [792]

     Reference is made by Gino Cassaniti to Frank Criniti’s evidence at T 608.32-48 that if he made any transaction from December 2011 in or out of Diamondwish, Rackforce or Givana Prestige it was “based upon the whatever Gino Cassaniti had told us or Tarun to do”; and to his denial that he ever made transactions on his own accord; as well as to his denial that he ever gave instructions or directions to Tarun Shah to the effect whenever there were funds in the Criniti’s Wood Fire Pizza account to transfer those funds across to Rackforce’s account (see at T 615.8-29). Frank Criniti’s evidence was that Tarun Shah had his system with Banq and that Tarun Shah would not take instructions from Frank Criniti “unless it came from Banq Accountants”.

209. [793]

     Gino Cassaniti submits that Frank Criniti is not a reliable witness and his evidence should not be accepted unless it is corroborated. Gino Cassaniti points, in this regard, to what is said to be Frank Criniti’s general demeanour, evasiveness, unnecessary aggression, and coyness; and, on occasions, to the incredulity as to his evidence (for example, that important transactions on the Diamondwish and Rackforce account occurred with neither his involvement or direction), noting and that key parts of his evidence were contradicted by David Rizk and Tarun Shah.

210. [794]

     It is said that Frank Criniti’s evidence was a calculated attempt to blame Gino Cassaniti for every financial woe that befell the Criniti companies; and that Frank Criniti’s own evidence gives the lie to that contention, in that, Gino Cassaniti submits that Frank Criniti “helped himself” to $23 million of what on his own admission was “undeclared moneys … from [his] restaurant business” over three years from 2011 to 2013 (T 602). As noted above, whatever Frank Criniti’s personal failings in relation to his income tax liabilities, this is not to the point in the present proceeding – not least in circumstances where it seems to be common ground that a purpose of the arrangements was tax minimisation (a euphemism it would seem in the present case for tax avoidance). In any event, I could not possibly reach a view that the losses sustained by the Criniti companies were due to conduct of this kind.

211. [795]

     For Ivana Cassaniti, it is similarly said that Frank Criniti’s evidence was largely self-serving, reference again being made to Frank Criniti’s evidence (at T 539.16-34). Further, Ivana Cassaniti says that Frank Criniti made his feelings towards Banq and Gino Cassaniti quite clear (at T 556.9-10) when asked why he “got rid” of Banq and he said “[b]ecause I made a mistake and got manipulated by an idiot”.

212. [796]

     Frank Criniti struck me as down to earth and forthright. I accept that he was prone to engage in confrontation with the cross-examiner. He made no bones about his feelings and gave his evidence on the whole in a direct way. He did not shy away from his unhappiness with Gino Cassaniti and Banq; but nor did he shy away from accepting responsibility for his part in the arrangements. I accept that his emotions ran high at times. However, it seems to my observation that, where he volunteered responses, this was generally in an attempt to paint the whole picture where he perceived that the questioning was perhaps selective. So, for example, his answer, when questioned about his car acquisitions (T 567.43-568.1) seemed to me to ring true:

213. [797]

     Elias Nassar gave evidence on subpoena issued by the plaintiffs. Elias Nassar controlled a group of companies (the Wenman Parties) comprising Blackrock Media, Ignite Promotions and Wenman Brimak as trustee for the Wenman Investments Trust.

214. [798]

     At T 827.17-37, Elias Nassar’s evidence was that he had known Gino Cassaniti since he was six or seven years old; that, after a long break, he met Gino Cassaniti at an event years later, and that by, 2010, he regarded Gino Cassaniti as his accountant and someone who “the whole time … oversaw anything that was done for any of the companies that we had” (T 816.14-28). Elias Nassaar said that he was not aware that Gino Cassaniti was not an accountant up until Gino Cassaniti told him just over two years ago (i.e., around 2018) that he was bankrupt (T 816.21-28). (In cross-examination by Gino Cassaniti’s Counsel, Elias Nassar said, with genuine feeling to my observation, that had he known that Gino Cassaniti had not been a registered tax agent since 2005 he would not have been with Banq – see at T 814; an observation that to my mind underscores Gino Cassaniti’s involvement with Banq at the relevant times.)

215. [799]

     As noted, Elias Nassar’s evidence was that: Gino Cassaniti oversaw anything that Banq did; that in the period from about 2010 or 2011, Banq did the general accounting work for the Wenman companies, prepared financial statements and tax returns; and that “Gino oversaw our accounts” (T 800). Banq acted as the companies’ tax agents. He said that his dealings at Banq in that period were with Gino Cassaniti and Peter Abboud and no one else. He said that Peter Abboud was doing a lot of bookkeeping (more the running around) and that he thought Peter Abboud was still studying at the time and anything he did would be overseen by Gino Cassaniti (at T 800.40-801.5). Elias Nassar said that he spoke to Gino Cassaniti numerous times over the phone in relation to different things in respect of the accounts and that he would have had a discussion with him in relation to a tax deduction for Blackrock Media (T 802.1-6). At T 817, he said that he did not know how things worked in Banq’s office but that, any time he would see Peter Abboud, Gino Cassaniti would come in and oversee anything Peter Abboud was explaining to him.

216. [800]

     Pausing here, I accept that caution should be exercised in accepting what is, in effect, Elias Nassar’s perception as to the roles carried out by Gino Cassaniti and Peter Abboud respectively, considering the generality of the evidence in this regard. However, it makes sense logically for Gino Cassaniti to be overseeing work undertaken by a more junior accountant for clients introduced by Gino Cassaniti to the firm (and particularly where, as appears to be the case here, reliance was placed by the client – Elias Nassar – on Gino Cassaniti’s involvement).

217. [801]

     As noted already, the verified defence of Wenman Brimak was admitted without objection. The plaintiffs point to the fact that no other defendant sought to challenge by cross-examination of Elias Nassar the admissions contained therein. In that defence, as noted above, Wenman Brimak admitted that, in about late 2012 or early 2013, Gino Cassaniti advised and recommended to the “Nassar Clients” that, if they entered into a number of payments between, Blackrock Media, Ignite Promotions, RCG CBD and Wenman Brimak, then they could legitimately minimise the amount of tax which would otherwise be payable by them (see at [7(d)]).

218. [802]

     Elias Nassar said in the witness box that Gino Cassaniti broadly explained the process for minimising tax (see T 819-820); that he saw him as an expert and so he went along with it; that the advice was along the lines of issuing invoices for consulting services he was doing – and that Gino Cassaniti said that there was a company he had that would issue the invoices (T 802). Elias Nassar’s evidence was that he thought it was legitimate at the time (T 802.33).

219. [803]

     Elias Nassar said that he did not understand that a fee would be charged by Banq for its involvement in the transactions and said that Gino Cassaniti did not tell him he would be taking a fee (T 803). He said that Gino Cassaniti explained to him that he (Gino) was consulting and so “the way it was explained to me was you know a legal way of of [sic] minimising tax” (T 803.27-30). As to a fee, all he could recall was that “it came back minus the GST” (T 803.15). Taken to his evidence on examination before Deputy Registrar Hedge on 21 March 2018 (where he gave evidence that he was told by Gino Cassaniti that the fee for involvement would be “less the GST”), Elias Nassar accepted that that was a truthful answer (T 804.1-806.30).

220. [804]

     In relation to the payments into RCG CBD from Ignite Promotions and out of RCG CBD to Wenman Brimak, Elias Nassar’s recollection was that invoices would be issued (from Blackrock Media to Ignite Promotions, Ignite Promotions to Blackrock Media, and then to Wenman Brimak, and then payment came back to Blackrock Media). At T 802.8-803.1, he gave evidence to the effect that: Gino Cassaniti let them know how payments would go from one company to another and that payments were to go from Blackrock Media to Ignite Promotions (T 806.12-25); that there was a conversation with Gino Cassaniti in which he said that Banq would organise the invoices to be sent that were to be paid (T 808.1-11); and that he left it to his office staff (Brenda Louwen) (T 807.1-11; 808.27-37; 820.20). Elias Nassar gave evidence that as to the exact amount Blackrock Media had to pay, Gino Cassaniti’s staff would contact Brenda Louwen and the process was arranged from there (T 807.9-19); and that Banq would ask his staff to create an invoice from Blackrock Media to Ignite Promotions or from Ignite Promotions to Blackrock Media (he could not recall exactly which) (T 807.44-49). (The plaintiffs say that clearly those invoices were false.)

221. [805]

     The plaintiffs say that Bluemine was used to implement the Scheme for one of the transactions involving the Wenman Parties. That transaction (Table 5.1) involved a “carousel payment” of $385,880 between Ignite Promotions, Bluemine and Wenman Brimak, for which Banq deducted a fee of $35,045. The plaintiffs say that there was no genuine commercial documentation for the transaction. The evidence from Elias Nassar was that Gino Cassaniti recommended to him the Scheme involving this transaction (see below).

222. [806]

     At T 809.17-810.40, Elias Nassar’s evidence was that RCG CBD did not ever provide any labour hire services to Ignite Promotions, and that the reason that invoices were paid in instalments was that Ignite did not have sufficient funds to pay the full amount at once. Further, at T 811.7-812.14, Elias Nassar confirmed that, in respect of the invoices issued by Ignite Promotions to Blackrock Media, no such consulting services as represented in those invoices were ever provided by Ignite Promotions to Blackrock Media. The plaintiffs emphasise that the benefits that were explained to Elias Nassar as arising from the transactions would be tax benefits. He gave similar evidence in relation to Bluemine (see T 812.45-813.43); his understanding being that Bluemine was “from Banq”. He said that the amounts (for the invoice payments) were given to them by Banq (T 813); and his recollection was that within a few days of each payment the money would come back to Black Rock Media (T 810.18-21).

223. [807]

     In cross-examination the extraordinary proposition was put to Elias Nassar (but, after objection, withdrawn) that it had been made clear to him that he should give false evidence about Gino Cassaniti and to suggest that he was involved in everything (T 818.45). I interpose here to note that I saw no basis in the evidence for such a suggestion.

224. [808]

     At T 819, Elias Nassar was emphatic that he had had a discussion with Gino Cassaniti about Blackrock Media in 2012 to 2013; that Gino Cassaniti explained the process in relation to minimising tax (and see T 820); and that any time he went to sign anything Gino Cassaniti would oversee it (T 821.15) (and see at T 827).

225. [809]

     Questioned as to this, Elias Nassar agreed that after he became aware of these Proceedings he had a meeting with Gino Cassaniti and asked him to speak with his lawyer (to sort the issue out – Elias Nassar said he needed Gino Cassaniti to explain the situation) (T 825). Elias Nassar said that Gino Cassaniti was blaming Peter Abboud and Fred Khalil about the situation (T 824-825; and see T 829).

226. [810]

     There is no reason to disbelieve Elias Nassar’s evidence. I accept that his recollection was not perfect but he did not overstate matters and I considered him to be genuine in giving his recollection of events. It is telling that Elias Nassar’s evidence was that he needed Gino Cassaniti to explain the situation to his lawyers when the issue with the liquidator arose. That is consistent with Elias Nassar having little real understanding of the transactions. Indeed, with no disrespect to Elias Nassar (or a number of other witnesses, such as Frank Criniti, Mario Sande and George Said) the suggestion that he would have been in a position to conceive of and implement a tax minimisation scheme of this kind without advice from qualified accounting or tax professionals is not plausible.

227. [811]

     Tarun Shah worked variously for Banq and then worked in-house for one or more companies in the Criniti companies.

228. [812]

     Within the Criniti companies, Tarun Shah said (at T 933.23-37) that he reported to Frank Criniti; and that Frank Criniti would not give him directions in terms of the accounting entries or the like but that normally there would be a meeting to go through the payments for authorisation of the payments. (It is said that this is contrary to Frank Criniti’s evidence that he did not give directions concerning the authorisation of payments. It is also noted that Tarun Shah gave evidence that Frank Criniti did give instructions for the movement of funds from one Criniti company to another Criniti company (see at T 936.5-7). It is also noted that (at T 935.42-49) Tarun Shah said that he did not do any bookkeeping for Rackforce and Diamondwish.

229. [813]

     Tarun Shah’s recollection was that there were labour hire payments going from the Criniti’s restaurants to the other companies and that if he was unsure as to the nature of a payment he would ask Gino Cassaniti what kind of payment it was; and he would get an answer such as initially to record the payment as a loan to the respective entity, and he would record it accordingly (T 928.5-32; see also T 927.22-35).

230. [814]

     Tarun Shah also explained that he spoke with other Banq employees whilst employed with the Criniti companies, including Devangh Shah (no relation) and Peter Abboud (T 929.25-930.12). His evidence is that Peter Abboud’s advice on how payments should be accounted for was to “[l]ike, record as a loan … And it will get reconciled”.

231. [815]

     When questioned as to the making of transactions from Frank Criniti’s online NAB accounts, Tarun Shah said that based on instructions (that he did not recall) he was still making transactions from those accounts in the period 2014 to 2017 but he did not accept that he ever received an instruction in the period 2011 to 2012 from Frank Criniti in words that when there were funds in the Criniti’s Wood Fire Pizza account they were to be transferred to the Rackforce account; rather, Tarun Shah said that normally “the verbal instructions were if he wanted to transfer money and if he can’t do it he would advise me that can you do this transfer” (T 939.30). (Insofar as reliance is placed on this as inconsistent with Frank Criniti’s denial of such an instruction, it is difficult confidently to conclude that there was any inconsistency given the tenor of Tarun Shah’s response to the question.)

232. [816]

     Tarun Shah also worked at Banq for a period following his employment at the Criniti companies (following an interview with Fred Khalil and Peter Abboud). His evidence was that he reported to Devangh Shah as the first point of contact and then to Peter Abboud; and that he did not have direct contact with clients of Banq (T 930.33-931.44). He understood that when he prepared the BAS returns they had to be signed by clients and that a client would come into the office to sign them. He said that he would give those returns to Devangh Shah and on occasion to Peter Abboud as well.

233. [817]

     There is no submission adverse to Tarun Shah’s credit. He was calm and matter of fact in the witness box and his evidence was consistent with his involvement being limited to the accounting aspects of approved payments – not to the approval of those payments himself. I accept that he relied on persons at Banq (Gino Cassaniti and Peter Abboud) for decisions as to the accounting treatment of payments, albeit that Frank Criniti gave him directions or approval as to particular payments out of the companies as well.

234. [818]

     Frank Criniti’s evidence was that David Rizk was his personal assistant at the beginning of 2012. He is now a maintenance officer.

235. [819]

     David Rizk’s evidence (on subpoena under compulsion in the Proceedings) is that he came to be appointed as a director of Givana Prestige following a conversation with Frank Criniti (T 904). Although he could not remember the date of that request, he did not dispute the accuracy of the ASIC register that noted his directorship from 18 January 2012 to 10 May 2012.

236. [820]

     David Rizk’s evidence was that he did not have access to any internet banking of Frank Criniti or his businesses and he did not recall signing any paperwork (T 905). His evidence was that his work involved driving Frank Criniti around a few times and that he would fill out forms and take them to the RTA for the change of paperwork in relation to the registration of cars (into Givana “or whatever it was”) (T 906). He had nothing to do with any money or payment for the vehicles (T 906.35).

237. [821]

     In cross-examination by Mr Katsoulas, David Rizk did not recall ever directing Vanessa Scuteri (in payroll at the Criniti companies) or Frank Criniti to bank any cheques for Diamondwish or Rackforce (T 906.40-48). He accepted that it appeared to be his signature as co-signatory for the NAB account authority but he could not remember signing the authority (see Ex 6; T 907-908). He said that Frank Criniti did not ask him to be a shareholder or secretary of Givana Prestige. In cross-examination by Mr Gupta (appearing for Peter Abboud), he said that he was not asked to collect any cash takings on behalf of Frank Criniti (T 909.5-7).

238. [822]

     David Rizk’s credit was again not in issue. There is no reason to disbelieve his account as to how he became a director (although there is some doubt as to whether Gino Cassaniti was present when that request was made). It is not implausible that the request was discussed between Frank Criniti and Gino Cassaniti in any event. It seems implausible in the extreme that Frank Criniti was organising this off his own bat and it is consistent with the approach in relation to a number of companies associated with Banq that “straw directors” would be appointed (including, in this matter, persons such as Christopher Cherry).

239. [823]

     Frank Criniti’s evidence was to the effect that David Rizk was his personal assistant; that he and Gino Cassaniti asked David Rizk to become a director of Givana Prestige (which occurred); and that, when David Rizk expressed to Frank Criniti that his father was not happy about him being a director of Givana Prestige he asked to be removed, Frank Criniti advised Gino Cassaniti, who said he would sort it out. Frank Criniti said that David Rizk had no involvement in the management of Givana Prestige (T 523.31-37).

240. [824]

     George Said (as noted above) is Fred Khalil’s cousin. He is now a roof tiler, but his evidence is that when he was a director of Involved Recruitment he was a real estate agent (T 891.35; T 846.5).

241. [825]

     George Said’s evidence (on subpoena issued by the plaintiffs) was that he became a director of Involved Recruitment at the request of Gino Cassaniti (T 843.13-44); that he walked into the Banq office and he was approached by Gino Cassaniti who asked him if he wanted to “partake” in a business (at T 843.13-45); that he said he was working full time and that Gino Cassaniti said that it might be a bit of administrative work and that he could work via his laptop. He said that a couple of weeks later he began to do some work at the direction of Gino Cassaniti (T 843.41).

242. [826]

     Pausing here, this evidence highlights the seemingly arbitrary way in which directors were appointed to companies associated with Banq. The suggestion that persons such as George Said and David Rizk (with no disrespect to them) had any appreciation of the role and duties of a company director is implausible in the extreme.

243. [827]

     George Said’s evidence (at T 843) that the work was “just pretty much paying whoever they asked via email. Whoever Gino asked via email”. He said that he would get an email with a timesheet to invoice and he would then get the payment and would pay whoever it needed to be directed to via email.

244. [828]

     George Said had access to the bank account but was not sure if he was a signatory on that account. He had the log in details and was able to do transfers on that account. He said that he was sure that Gino Cassaniti had access to the bank account and that he was sure that he was not the only one doing what he was doing because sometimes he “logged in” and saw that there were other transactions that he had not done (T 844-846).

245. [829]

     At T 848.19-849.40, George Said’s evidence was to the effect that he received documents from Banq on his laptop but could not recall what type of documents they were and if they were instructions; he later said he could not recall if he received documents from Banq; he recalled receiving invoices from clients of Involved Recruitment for labour hire work; they would then invoice that work to the clients at Involved Recruitment; he would receive instructions from either the client or Gino Cassaniti. His evidence (at T 849.18) was that he changed the letterhead on the invoices.

246. [830]

     George Said agreed (at T 857.25-39) that his evidence (at 43 of his ATO transcript, see Ex R at 43) was truthful when he said that he changed the letterhead for the invoices for Involved Recruitment (I note that I admitted page 43 lines 15-38 of Ex R without the provisional qualification, as admissions against interest – see the Earth Civil 23 March 2020 Judgment at [143]). At T 858-859, George Said said that Gino Cassaniti instructed him on how to use the laptop to enable the change on the letterheads to be made and someone at the Banq office programmed his laptop for this work. At T 858.27-859.8, he said that he left his laptop in Gino Cassaniti’s office for it to be set up although he was unable to say who in fact (in Gino Cassaniti’s office) set it up. Gino Cassaniti also instructed him as to the withdrawal of money to take for himself and to take to Gino Cassaniti (T 869-870).

247. [831]

     It should be noted that George Said then claimed (at T 861.38-862.49) that his previous answers in the ATO interview about changing the logo were incorrect. His evidence was to the effect that what he meant to say was that he just got an invoice or would get a timesheet and send it off, and that is all he did; he “never changed anything on it”, “never touched it”, “never amended anything”. His evidence was to the effect that he could not remember whether, if a change did occur, then that was a change that he did not make or if the computer automatically did it. His evidence was to the effect that maybe he was not understanding what the tax officers had been asking him and, when he looked over the brief, he was not happy with what he had said for agreeing to the questions from the tax officers and he further went on to say that he took back the answer in the brief.

248. [832]

     At T 866.43-867.25, George Said gave the following evidence:

249. [833]

     The plaintiffs say (and I agree) that a review of George Said’s transcript of interview with the ATO on 3 June 2019 makes it clear that there was nothing unfair in the nature of the questioning in the interview. They point out that George Said did not seek clarification of questions the answers to which he claimed before this court were wrong or mistaken. His evidence (at T 867.25) that it was a very fast interview is said not to be a plausible explanation as to why he did not have every opportunity to indicate to the taxation officers in the interview that any of his answers were incorrect or needed explanation. The plaintiffs accuse George Said of not being frank in the witness box in attempting to resile from evidence formerly given on oath; and they say that his contrary evidence in court was disingenuous and untrue. (His evidence was certainly confused and its reliability is moot – the notion of a letterhead somehow appearing by itself was not explained.)

250. [834]

     In the course of his evidence, objection was taken by Counsel for the Khalil defendants to leave being given for the plaintiffs to cross-examine George Said. So as not to interrupt the Proceedings, at that point I took evidence on the voir dire (see from T 854) and indicated that I would rule on the objection in due course (see my ruling below).

251. [835]

     The evidence in question related to what George Said did in relation to the changing of letterheads on invoices. He said (at T 858) that he was able, on the laptop, to put on the heading Involved Recruitment and that he would do the same job role for all the directorships. He said that someone else set up the laptop to change the logos for the invoices – and he identified that person as Gino Cassaniti (T 859). He also said that Gino Cassaniti instructed him how to use the laptop to enable the change on the letterheads to be made.

252. [836]

     George Said’s evidence was that he would put the “Involved Recruitment” invoice header or logo on the invoices; send the invoices over to whoever was requested to pay it and, if it was a timesheet, he would normally have instructions (from the person who sent the timesheet or from Gino Cassaniti) as to the person to whom to send the invoice (T 860).

253. [837]

     However, then (at T 862), George Said that he was not changing logos and that his earlier evidence to the tax office to that effect was incorrect (and that maybe he did not understand what they had been asking) (see his evidence at T 865ff which led to him saying that he could not remember if he did or did not change anything or if the logo just appeared by itself – see T 867, as adverted to above).

254. [838]

     At T 869, when shown an invoice to Borg Civil with an Involved Recruitment logo (see Ex K at 38973), George Said’s evidence seemed to be that he would send out an invoice of this kind from his laptop and that he was not making a decision as to how much money to add or any description of it.

255. [839]

     George Said gave evidence that he was paid for being a director of the company but said that there was never a system and that he would go to the bank and withdraw money and sometimes Gino Cassaniti would tell him to take money from that amount or would give him cash for his work (T 869). He agreed that he would take out large sums and that he would give the money to Gino Cassaniti (T 870).

256. [840]

     Asked about his directorship of Involved Recruitment, George Said’s evidence was that Gino Cassaniti must have put his name down as a director of Involved Recruitment (T871). He said that he never discussed with Gino Cassaniti anything about the changes of directorship with Involved Recruitment.

257. [841]

     Relevantly, George Said’s evidence was that when he had his previous ATO interview, he did not want to say that the person he was dealing with was Gino Cassaniti (T 872). He was very clear that he had had nothing to do with Fred Khalil and Peter Abboud. George Said’s evidence was that he knew Fred Khalil and Peter Abboud but that he did not deal with them other than to say hello. He also recalled (incorrectly, it would seem, having regard to the weight of other evidence) that Ivana Cassaniti had an office at Banq (T 873).

258. [842]

     The commencement of cross-examination by Gino Cassaniti’s Counsel (commencing at T 885) in effect marked the end of the voir dire. In cross-examination by Gino Cassaniti’s Counsel, George Said accepted that he had met Gino Cassaniti at social functions over the years but he was adamant that he had also been involved in business dealings with him (T 889); and denied that his dealings were with Peter Abboud and Fred Khalil as opposed to Gino Cassaniti (see T 896). He accepted that he had had a drug problem (cocaine) and a gambling problem (see T 893).

259. [843]

     It is convenient at this point to determine the objection to the evidence of George Said that was taken on the voir dire over objection and only provisionally admitted.

260. [844]

     Section 38 of the Evidence Act provides, relevantly:

261. [845]

     The term “witness” is defined in cl 7 of Pt 2 of the Dictionary to the Evidence Act as follows:

262. [846]

     Section 38 was intended to abrogate the common law relating to hostile witnesses (see the Evidence (Interim) Report (Australian Law Reform Commission Report 26, August 1985) at [625]). The provision permits a party to seek the leave of the court to cross-examine that party’s own witness about, inter alia, evidence given by the witness that is unfavourable to the party (see generally, Adam v R (2001) 207 CLR 96; [2001] HCA 57 at [11], [24] per Gleeson CJ, McHugh, Kirby and Hayne JJ).

263. [847]

     A discrete issue which arose for determination was whether s 38(7) operates to limit the scope of s 38(1) so that a party to proceedings, who is called as a witness, can only be cross-examined if the circumstances of s 38(7) are satisfied – that is, where the proceeding is being conducted in the name of that party by or on behalf of an insurer or other person. On such a construction, s 38(1) would not entitle a plaintiff to call an opposing party as a witness and to seek the leave of the court to cross-examine that party about “unfavourable” evidence.

264. [848]

     I consider that, on the proper construction of s 38, s 38(7) does not limit the circumstances in which a court can grant leave for a party to be cross-examined about “unfavourable” evidence. This is particularly so given the wording of the subsection, “[a] party is subject to the same liability to be cross-examined under this section as any other witness if…” (emphasis added), which indicates that s 38(7) expressly extends the operation of s 38 to circumstances where the proceeding is conducted in the name of the relevant party to be questioned on behalf of an insurer or other person, as opposed to limiting it to that class of witness. While the operation of s 38(7) has not relevantly been considered by an appellate authority, leave has been granted for a party to cross-examine another party about “unfavourable” evidence (see MCCA Asset Management Ltd v Kamata Homes Pty Ltd (Admins Appointed) (No 2) [2019] VSC 842 at [36]–[37] per McDonald J (although no submission was advanced opposing the grant of leave); see also DEF v Trappett [2016] NSWSC 1387 at [16] per Adamson J).

265. [849]

     Section 38(1) is expressed in broad terms. It entitles a party who called a witness to seek leave to cross-examine that witness in the circumstances specified in ss 38(1)(a)-(c). Given that the term “witness” is defined to include a party giving evidence, a party may call an opposing party as a witness (which it has long been entitled to do in a civil case – see Price v Manning (1889) 42 Ch D 372), and, pursuant to s 38(1), it may then seek leave to cross-examine the opposing party in the circumstances set out in s 38(1). A plain reading of section 38(7) does not require that the scope of application of s 38(1) be limited nor does it follow that the Dictionary definition of “witness” does not apply in s 38(1).

266. [850]

     This interpretation of s 38 does not render s 38(7) otiose. That subsection removes any uncertainty that may have arisen in s 38(1) as to the meaning of “party”, which is not defined in the Evidence Act. In Vocisano v Vocisano (1974) 130 CLR 267 (Vocisano) at 272, the High Court held that an authorised insurer, who had taken over the conduct of proceedings on behalf of the insured defendant, was not allowed to cross-examine that defendant about his earlier inconsistent statement because, pursuant to s 60 of the Evidence Ordinance 1971 (ACT), only a party “on the record” could seek leave to cross-examine, and an authorised insurer is not such a party.

267. [851]

     The Explanatory Memorandum to the Evidence Act, which is relevantly identical in respect of s 38, stated at [70]:

268. [852]

     Further, to construe s 38(7) as limiting the scope of s 38(1) would restrict the operation of the provision in a way which runs against the legislative purpose of s 38. The Evidence (Interim) Report of the Australian Law Reform Commission (ALRC Report 26, August 1985) stated at [295] that:

269. [853]

     If s 38(7) were construed as providing the only circumstance in which a court could grant leave for a party called as a witness to be cross-examined, the mischief which was detailed in the passage above and purportedly resolved by s 38(1) would remain unaddressed.

270. [854]

     As to whether leave should be granted on such an application, see subs 6 which is set out above, which is not exhaustive of the matters that may be taken into account.

271. [855]

     In the present case, I had regard to the fact that George Said’s evidence, to the extent that it departed from what was said in his ATO interview, and to the extent that it was confirmed, required clarification and that it was in the interests of the administration of justice that the plaintiffs be permitted to test this evidence.

272. [856]

     For these reasons, I confirm the leave granted to the plaintiffs to cross-examine George Said and I will treat the evidence on the voir dire as no longer subject to a provisional qualification.

273. [857]

     On any view of things, George Said’s primary occupation in relation to Involved Recruitment was to undertake minor clerical work in the preparation of invoices (relevantly, he says, at the direction of Gino Cassaniti); doing this on his laptop from electronic instructions received by email and using software or templates (which were, he says, provided to him by Gino Cassaniti). As to whether this involved changing letterheads on invoices (see T 849), his evidence became more than a little confused (see at T 861-862; and above). George Said also withdrew money from the bank which he says was at the direction of Gino Cassaniti and for the payment of employees. He also said that when it involved withdrawing large sums of cash, he gave it to Gino Cassaniti (T 870).

274. [858]

     What was abundantly clear in my opinion was that George Said never made any decision himself (as to how much was to be invoiced or paid); and that he did what he was instructed to do when issuing invoices (see at T 868).

275. [859]

     I approach his evidence with some caution given the inconsistency between his ATO interview and his evidence in Court. Nevertheless, it is telling that he identified Gino Cassaniti as the person who he was reluctant to identify to the ATO officers. Moreover, his inability to give a cogent and consistent explanation of events supports the conclusion that he cannot have had any real understanding of the role or responsibilities of a company director – and is further evidence of the practice within Banq (and in George Said’s case this is squarely at Gino Cassaniti’s doing) of the appointment of what can only sensibly be seen as straw directors – meaning that the real control lay elsewhere.

276. [860]

     Christopher Cherry, now unemployed, could not remember how he came to be a director of Rackforce (saying that he had a really bad drug problem – see T 902); did not know Gino Cassaniti; did not think he performed any task for Rackforce; could not remember Frank Criniti’s name; and could not remember anything to do with Diamondwish). Indeed, it is fair to say that he could not remember very much. Any suggestion that he performed a significant directorship role in the companies to which he was appointed is unlikely in the extreme (and is not supported by any contemporaneous documentary evidence).

277. [861]

     Mr Gupta, solicitor, appeared for Andrew Barsa, when the latter was subpoenaed to give evidence. Andrew Barsa’s occupation is that of a business consultant (T 911).

278. [862]

     Andrew Barsa’s evidence was that when his cousin (George Abboud) was going through his divorce he (George) asked him to be a director of Bluemine. He said that this was for two reasons – one for asset protection in relation to the trucks and the second so that the trucks could operate as a business (T 911). He said that he delegated the responsibility for the business side of things to Michael Abboud because he had been in the industry for a long time and he delegated the accounting side of things to Banq to manage (T 912).

279. [863]

     At T 913, Andrew Barsa said that when he delegated the accounts of Bluemine to Banq “all of them” were involved – Gino Cassaniti, Peter Abboud and Fred Khalil. He did not think that he was a signatory to the bank account and could not recall access online to the bank account for the company. Andrew Barsa was not aware of any monetary transactions made. (In cross-examination he thought it might have been Peter Abboud who was the signatory for the bank account – see T 917.) Andrew Barsa said that he “potentially” received instructions as to the operation of a bank account but could not recall. Shown the account authority form for Bluemine dated 14 November 2012 (Ex 8), he said that it was his signature but not his handwriting (T 923).

280. [864]

     Andrew Barsa’s evidence was that he knew nothing about $6 million in transactions in the Bluemine account in 2012 (T 914). Andrew Barsa did not recall if Bluemine had paid for the trucks but said that “potentially” he may have signed documents to purchase the trucks “initially, in the beginning” (T 918.44).

281. [865]

     As to the BAS returns, Andrew Barsa said that someone from the office would call him to come in and who he would see there would “just be random really”; that there would be a lot of girls who would come over and he would just sign (T 916.35-39).

282. [866]

     As to the circumstances in which Andrew Barsa ceased to be a director of Bluemine, he gave evidence at T 914.39-5 that:

283. [867]

     At T 915.21-22, Andrew Barsa said that the discussion with Gino Cassaniti about Andrew ceasing as a director would have happened at Banq between December 2012 and February 2013; that the agreement was “through Banq and Gino that he was taking over” but he could not recall “the exact granular detailed conversation”; and that Gino Cassaniti said “fine” and someone at Banq told him that he had been removed. For Gino Cassaniti, it is said that that evidence given by Andrew Barsa is inconsistent with the statements made by Andrew Barsa in his ATO interview on 25 July 2016. It is said that a fair summary of that transcript is that Andrew Barsa did not even know who Gino Cassaniti was, let alone that he had a discussion with Gino Cassaniti, much less any agreement that Gino Cassaniti was taking over as director.

284. [868]

     Gino Cassaniti emphasises that in the 16 page extract from the ATO transcript (Ex E), the name “Cassaniti” appears only three times: first, (Ex E at 274, lines 29-33), when Andrew Barsa was asked if he knew why Gino Cassaniti became the director of the company in April 2013 and Andrew Barsa responded “After me?” (a response that Gino Cassaniti says is incomprehensible but on its face appears to be a query as to the chronology of the events there being questioned); second, (Ex E at 283 lines 29-34), where Andrew Barsa was asked whether there were documents to explain why there was a need to change the director when he ceased to be director of Bluemine, and Gino Cassaniti was appointed director of the company, and Andrew Barsa said he did not recall; and the third, (Ex E at 283, line 35 to 284, line 14) being in the course of questioning as to whether Andrew Barsa was aware of any financial problems with the company at the time of the change of directorship and the interviewer, in response to a question from Andrew Barsa, identified Gino Cassaniti as the replacement director.

285. [869]

     As to the second of those references, Gino Cassaniti points out that (cf his evidence at T 914.40-T915.42), Andrew Barsa did not say words to the effect he had a conversation with Gino Cassaniti and there was an agreement that he would be taking over the company. True it is that Andrew Barsa did not say words to that effect; he simply said that he did not recall. Nothing can be drawn from this.

286. [870]

     As to the third of those references, it seems to me apparent from the transcript that Andrew Barsa was confused as to what he was being asked. What Andrew Barsa said was “So what you’re saying – who – who replaced me for that month?” and when told that the new director was Gino Cassaniti, his answer was that he was not aware of any [presumably financial problems]. Andrew Barsa was then asked if there was a particular reason why the change of directorship document was lodged on 26 July 2013 but backdated to 1 April 2013, to which he responded that he did not know.

287. [871]

     It is said by Gino Cassaniti that the last of these exchanges is “even more decisively inconsistent” with Andrew Barsa’s evidence of an oral conversation and an agreement with Gino Cassaniti. First, it is said that it is clear that it was the month after 26 July 2013 (i.e., August 2013) that was being discussed; and Andrew Barsa (asked if he was aware of financial problems with the company in that month) sought clarification as to the time period involved and then said “[s]o I was off, and then a month later the company went to [liquidation]”. Second, that, when told that it was Gino Cassaniti who replaced him for that month, Andrew Barsa simply said “Ok. So – okay”; rather than words to the effect that what had occurred was consistent with the agreement he had with Gino Cassaniti.

288. [872]

     I have to say that I do not draw the same inferences from the above exchanges in Andrew Barsa’s ATO interview as Gino Cassaniti does. Rather, I read those exchanges as consistent with Andrew Barsa not having any professed recollection of events and seeking to clarify precisely what he was being asked.

289. [873]

     I note that (somewhat extraordinarily, given his apparent occupation as a business consultant) Andrew Barsa suggested in cross-examination by Counsel for Ivana Cassaniti that he would “possibly” advise clients not to keep a close eye on their business because they can just delegate that to others (see T 920) but nothing here turns on the implausibility of such evidence (or inadvisability of such advice). Suffice it to note that I did not find Andrew Barsa to be a particularly compelling witness and I have difficulty accepting that he performed a real directorship role from home in relation to the affairs of Bluemine (as he would have me believe).

290. [874]

     Scott Crabbe is currently working as a delivery driver (T 942). He gave evidence that he commenced employment in approximately 2004 or 2006 with Reliance Cleaning Group (T 943); that at the time he was working as a cleaner; that Fred Khalil was his accountant and doing his tax return (T 944); that at one point he told Fred Khalil that he was going to lose his job because the company was going into administration and he was stressed because he had a young family; and that Fred Khalil suggested that he approach the administrators and buy out the company, which he did in order to save his employment.

291. [875]

     Scott Crabbe said his discussions were mainly with Fred Khalil. He said he thought it was a sign of good faith to “show commitment to sharing the directorship” of Reliance Cleaning with Peter Abboud. One other party that he said was involved was Debbie Akkawi.

292. [876]

     Scott Crabbe agreed (at T 954) that Reliance Cleaning engaged and paid labour hire firms (at a sum totalling about $2 million). He said that Reliance Cleaning did have employed staff but that he could not name a supervisor with an employment contract with Reliance Cleaning “off the top of [his] head” (T 954). He agreed (at T 957) with the proposition that, as far as he knew, services (presumably labour hire services) were provided by RCG CBD to Reliance Cleaning. When it was put to him that he was still managing Reliance Cleaning in December 2012, Scott Crabbe said “[n]o, I was doing emails from home” (at T 958).

293. [877]

     Scott Crabbe gave the following evidence about his involvement in the business (at T 49.3-8):

294. [878]

     It is clear, with no disrespect to him, that Scott Crabbe had no idea what was involved in the duties or responsibilities of a director of a company. Scott Crabbe made no pretence of any understanding as to the duties he had as a director (T 949) and, as noted above, said that he engaged accountants to take care of the daily running of the business. Hence, it is unlikely in the extreme that he was focussed on performing those duties.

295. [879]

     Scott Crabbe’s evidence was that the business of the company was primarily office cleaning (T 944). His evidence was that, from the day he took over the company, he worked with clients. However, he did not prepare tax returns or any documents to go to the tax office (he said that he engaged accountants for that). He said that he did not have any “control or jurisdiction” over “that section” (when questioned about the preparation of BAS returns, financial accounts or tax returns) and the only people he knew in relation to that were Peter Abboud and Fred Khalil (T 946).

296. [880]

     At T 946, Scott Crabbe said that he knew of Gino Cassaniti; that he had met him probably four to five times in the course of dealing with Banq. He said that he was not a signatory to the company cheque account and had nothing to do with payments in or out. The only person he knew with access to the bank account codes was Fred Khalil (see T 946.32-47). He did not know who was doing any transactions and that he did not do any bank transfers (T 947). He said that he was not involved in any meetings of directors.

297. [881]

     In cross-examination by the solicitor for Peter Abboud, Scott Crabbe was taken to an email dated 27 December 2012 in which Scott Crabbe was referred to as “Managing Director”. He said (at T 947.47) that his role would “morph” depending on what tender was being put in (General Manager, Managing Director, CEO, CFO, for example). He was adamant that throughout the period he was still helping with tenders.

298. [882]

     Scott Crabbe said that, in around 2011, he became quite ill and that he went to Fred Khalil in approximately 2012 and asked that he be removed as director, primarily due to his ill health. In the period from 2011 to 2014 he made two suicide attempts. His recollection was that his discussion with Fred Khalil about being removed as a director was in late 2011 or early 2012 after his first suicide attempt (T 945). He said that, after that, he still helped out doing tenders and costings and that he basically worked from home (see T 945.22-39). He said that he met with Peter Abboud if there was a “question about a costing for a tender” (T 945.40-45).

299. [883]

     I found Scott Crabbe to be a genuine witness. He was candid about his personal health issues and he did not attempt to overstate his role in the company. It was abundantly clear that Scott Crabbe could not himself have conceived and implemented the impugned transactions. His focus, understandably, throughout seems to have been to preserve his employment for the benefit of his family.

Evidence as to role of persons working within Banq

1. [884]

   Gino Cassaniti, in his affidavits sworn 11 April 2019 and 28 June 2019, asserts that he only knew a handful of defendants; that he had no connection or relationship with a majority of the defendants; and that he had not made contact with or engaged in any form with a large majority of defendants (see his first affidavit at [39]). He did not depose to any shareholding in Banq.

2. [885]

   In his first affidavit sworn 11 April 2019, Gino Cassaniti (at [10]) deposed that he ceased to do accounting work from Banq’s incorporation in June 2011 but that he consulted Banq; and (at [30]) that he ceased to consult for Banq in December 2013. (The plaintiffs say that Gino Cassaniti’s assertions in this regard are not to be believed in contrast to Frank Criniti’s evidence.)

3. [886]

   In his second affidavit sworn 28 June 2019, Gino Cassaniti deposed (at [7] and [16]) that his role at Banq was to introduce clients (without identifying whether those included clients who are parties to these Proceedings) and to intervene in client matters when specialist advice was required as to business structures and tax (while asserting that he did not engage in or advise anyone to undertake the transactions relevant to the current Proceedings). Further, Gino Cassaniti deposed that: at [10], he (or his wife, Ivana Cassaniti) was never a principal of Banq; at [12(c)], he received a salary (through RCG CBD); at [15], he never did spot checks and that he trusted Fred Khalil and Peter Abboud to run the business; and, at [10(c)], Ivana Cassaniti put up the money and owned the shares in Banq.

4. [887]

   As to his involvement in the Insolvent Companies, Gino Cassaniti deposed: (11 April 2019 affidavit at [13]) that he had a conversation with someone (unidentified) at Banq in May or June 2013 during the course of which he told that person he thought he would go bankrupt and that person asked him to be a director of some of that person’s clients’ companies for a short period of time; (at [15]) that he was not asked to sign and did not sign consents for directorship of RCG CBD, Bluemine, Earth Civil or Involved Recruitment; (at [17]-[21]) that he did not act as a director of or manage the affairs of those companies and he did not agree to become a shareholder of those companies and did not resolve to place the companies in liquidation; and that he was not owed money by those companies and did not sign any proofs of debt or creditor’s proxy for any of those companies.

5. [888]

   As already noted, Ivana Cassaniti, in her first affidavit sworn 11 April 2019 (at [9]) deposed in effect that she formed Banq with Fred Khalil and Peter Abboud; and that she had a 60% interest through Givana; and that she invested all the funds to set up the practice. In her subsequent affidavit sworn 3 March 2020 (at [9]), Ivana Cassaniti’s evidence (inconsistent with both her earlier evidence and Gino Cassaniti’s evidence – see above) was to the effect that her interest in Banq, through Givana, was held jointly with her husband, Gino Cassaniti, and that they had together invested the funds in the business to set up the practice. (The plaintiffs note that Gino Cassaniti did not seek to cross-examine Ivana Cassaniti as to her evidence regarding his joint shareholding in Banq. The plaintiffs submit that an inference can be drawn that Gino Cassaniti was content not to contest Ivana Cassaniti’s evidence about that issue; and that he was in effect a principal of Banq.)

6. [889]

   Frank Criniti’s evidence (at T 462) was that each of Gino Cassaniti, Peter Abboud and Fred Khalil had his own office at both the Former Banq Address and the Banq Address (and he recalled that when he went to the offices of Banq he also saw Ivana Cassaniti from time to time). Frank Criniti’s evidence (at T 463.43) was that he signed things for Gino Cassaniti and never knew what he was signing (as he would be provided with a stack of papers and he just signed them).

7. [890]

   The plaintiffs say that, in circumstances where Gino Cassaniti was married to Ivana Cassaniti (in effect, the major shareholder of Banq), who had provided 60% of the funds to acquire the firm’s premises (referring to Ivana Cassaniti’s affidavit sworn 28 June 2019 at [9]), it is not plausible that Gino Cassaniti was unaware of what was going on in Banq generally and specifically in relation to the Insolvent Companies. (The plaintiffs make a similar submission as to Ivana Cassaniti.) Further, they say that, while it may well be that Ivana Cassaniti came to have less knowledge of the day to day operations of Banq due to her domestic duties, it cannot be the case that, knowing this, Gino Cassaniti took as little interest in Banq as his affidavit evidence would suggest.

8. [891]

   The plaintiffs say that it should not be accepted that Gino Cassaniti did not know what was happening at Banq. The plaintiffs contend that Gino Cassaniti well understood the purpose of large amounts of money “washing through” Banq and the Insolvent Companies; pointing to the absence of any explanation by Gino Cassaniti as to what Gino Cassaniti might have thought the payments were for (or that he even noticed the payments at all). It is said that an honest person would have at least enquired about the sources of the money.

9. [892]

   Fred Khalil was a director and shareholder of Banq Accountants and, on the incorporation of Banq, the sole director and secretary and a 30% shareholder of Banq. In his affidavit sworn 25 March 2019 (at [15]), Fred Khalil confirmed that he was the tax agent, and a director, of Banq; that he acted as a senior accountant; and that he worked full-time at Banq after its incorporation. Fred Khalil’s evidence is that he was appointed a director because he was the tax agent ([15]).

10. [893]

    In Fred Khalil’s affidavit sworn 25 March 2019 he deposed that: he understood that Gino Cassaniti and Ivana Cassaniti primarily funded the fit out and provided start-up capital for the new Banq offices (at [14]); Gino Cassaniti was the managing or senior partner (at [15]); Gino Cassaniti and Ivana Cassaniti had the “final say” regarding all of the business operations of Banq (at [24]); Gino Cassaniti was the first point of contact for major clients, would chair meetings and would delegate and supervise accounting work to him (Fred Khalil) and Peter Abboud (at [28]); Gino Cassaniti would make top level administrative decisions without reference to him (Fred Khalil) (at [29]); Gino Cassaniti and he (Fred Khalil) approved client tax returns and he (Fred Khalil) lodged the tax returns and financials of Banq and clients (at [24]); Ivana Cassaniti authorised and made payments from Banq’s bank account, had primary responsibility for management of accounts payable and receivable, and oversaw all bank account transactions (at [26]); Gino Cassaniti and Ivana Cassaniti would check the bank account transactions on a regular basis, and each transaction out of the ordinary would have to be approved by Gino Cassaniti and Ivana Cassaniti. At [30], Fred Khalil deposed that after Gino’s bankruptcy “the arrangements…remained the same”.

11. [894]

    In effect, Fred Khalil’s evidence is that, while he also handled many of the day to day activities (including drawing necessary cheques on Banq general account as required), principally his role was to provide accounting services to clients of Banq (see Fred Khalil’s affidavit sworn 25 March 2019 at [15]).

12. [895]

    As to the significance of Fred Khalil being the supervising tax agent at Banq, the plaintiffs point out that the role of a tax agent is governed by the Tax Agent Services Act 2009 (Cth) (Tax Agent Services Act), referring in particular to s 20.5(3), which provides that a company may be eligible for registration as a registered tax agent if, inter alia, each director of the company is a fit and proper person and the company has not been convicted of a serious taxation offence or an offence involving fraud or dishonesty during the previous five years; and s 30.10, which sets out a code of professional conduct which includes, inter alia, that the tax agent must act lawfully in the best interests of its client and must not knowingly obstruct the proper administration of the taxation laws.

13. [896]

    The plaintiffs point out that Fred Khalil was the person at Banq responsible for ensuring that the tax agent services provided by Banq were provided in accordance with the Tax Agent Services Act (something that Fred Khalil does not, as I understand it, dispute). It is also said that, as the supervising tax agent for Banq, Fred Khalil was responsible for all lodgements with the ATO for all of the clients of Banq and for ensuring (which Fred Khalil does take issue with) that any information in the documents lodged was true and correct (referring to the Tax Agent Services Act, ss 20.5, 30.10, 50.30; and the Taxation Administration Act, Sch 1, ss 388-60, 388-80).

14. [897]

    According to Gino Cassaniti in his affidavit sworn 28 June 2019, Fred Khalil (together with Peter Abboud) ran the business of Banq ([10], [15]) and staff meetings were always organised and managed by Fred Khalil ([25(c)]).

15. [898]

    Ivana Cassaniti’s evidence (in her second affidavit sworn 28 June 2019) is that Fred Khalil was a partner who undertook all the tax returns, bookkeeping, preparing financial statements, managing client requests and general accounting tasks ([6]); that Fred Khalil contributed to the funding for the acquisition of the firm’s premises ([9]); that Fred Khalil handled all of the firm’s day to day activities ([12] and [13]); that Fred Khalil made all the decisions and bank transfers ([17]); and that, after 2010, Fred Khalil and Peter Abboud did all of the bank transactions ([24]).

16. [899]

    Peter Abboud’s evidence (in relation to Fred Khalil’s role at Banq), in his affidavit sworn 22 March 2019 is that: he (Peter Abboud) was an authorised signatory of multiple bank accounts of Banq entities and completed transfers as directed by and on the instructions of Gino Cassaniti or Fred Khalil or Ivana Cassaniti and would follow up clients for payments of bills or invoices when requested by Gino Cassaniti or Fred Khalil or Ivana Cassaniti ([28]); all of the work he performed for clients of Banq entities was at the direction and instruction of Gino Cassaniti or Fred Khalil, who supervised him; and that he only did work that they instructed him to do and he cross-checked every instruction from a client with Gino Cassaniti or Fred Khalil or Ivana Cassaniti before taking any action ([29]); any important or significant decisions were made by Gino Cassaniti or Fred Khalil either of whom from time to time conducted staff meetings ([32]); he (Peter Abboud) was regularly appointed as a director, and as a signatory to bank accounts of newly incorporated companies ([33]); bank transfers were usually done by Fred Khalil or Gino Cassaniti or Ivana Cassaniti, but if he did process a transfer it was only ever at the direction of Fred Khalil, Gino Cassaniti or Ivana Cassaniti ([34]).

17. [900]

    It is noted by the plaintiffs that none of Fred Khalil, Gino Cassaniti or Ivana Cassaniti sought to cross-examine Peter Abboud about these matters. In this regard, there is to my mind a distinction between one or more of the defendants not challenging in cross-examination evidence given by a deponent, such as Ivana Cassaniti, who made himself or herself available for cross-examination and the position where (as was the case with other witnesses) a decision to challenge a deponent who did not make himself available for cross-examination would have required the defendant to subpoena that witness (and then, absent leave, be confined to adducing evidence in chief); particularly having regard to the regime that was agreed to be adopted in relation to the evidence of witnesses such as Fred Khalil and Peter Abboud.

18. [901]

    The plaintiffs say that, at all material times, with reference to all five Proceedings, Fred Khalil was a director of Banq, which provided financial, accounting and tax advice to participants in the Scheme, the supervising tax agent of Banq and held proxies on behalf of creditors other than the ATO in the windings up of each of the Insolvent Companies. They say that it can properly be inferred that Fred Khalil permitted Gino Cassaniti and Peter Abboud to act as shadow directors of Banq and held them out as such by allowing them to act in that capacity.

19. [902]

    The plaintiffs further say that Fred Khalil’s undertaking at the meeting of creditors of Earth Civil on 9 July 2013 (as with other such creditors’ meetings in respect of the other Insolvent Companies) to deliver books and records “in his possession” must have been in his capacity as a principal of Banq, because he was not an officer or shareholder of Earth Civil and would not otherwise have known whether any books or records existed. They point out that although Gino Cassaniti (in his affidavit sworn 28 June 2019 at [20], read as an assertion), denies Fred Khalil’s assertion (in his affidavit sworn 25 March 2019) that Gino asked him to meet the liquidator and assist in completing the liquidation forms, Gino Cassaniti did not require Fred Khalil for cross-examination.

20. [903]

    It is submitted by the plaintiffs that Fred Khalil knew more about the affairs of Earth Civil than a mere proxy holder for the proofs of debt, otherwise he would not have provided such an undertaking as he gave in relation to the provision of books and records of the company and that, either Fred Khalil shirked his undertaking and did nothing at all or he must have spoken with Gino Cassaniti (who as a director of Earth Civil and principal of Banq it is said would be the person reasonably expected to know where Banq was keeping such records or who at Banq was in charge of such records). It is submitted by the plaintiffs that it is clear from this that Gino Cassaniti knew what Fred Khalil was doing; and that to that extent Gino Cassaniti was further implicated in controlling and using Earth Civil’s liquidation for his own ends.

21. [904]

    The plaintiffs point out that Fred Khalil was a signatory to a number of accounts, usually in conjunction with Peter Abboud and Ivana Cassaniti (Ex K at 10773-10776); and that many of the companies in respect of whose accounts Fred Khalil, Peter Abboud and/or Ivana Cassaniti were signatory were clients of Banq, but that no explanation has been proffered by any of the Primary Conspirators as to the necessity for them to be signatories to all of those accounts.

22. [905]

    The only direct evidence of George Khalil’s role at Banq (which the Khalil defendants emphasise in their submissions) is that he was a signatory to various bank accounts of Banq clients and that he occupied various administration roles in certain of the companies.

23. [906]

    On the ASIC record, George Khalil was a director of RCG CBD for one day on 16 May 2012 (the day of incorporation). However, the plaintiffs contend that George Khalil’s directorship was from 16 May 2012 until 28 May 2013 when the Form 484 was lodged notifying ASIC of the change in directorship (Ex K at 31691-31693).

24. [907]

    The plaintiffs also note that George Khalil was a director of a number of other companies associated with Banq, including: Workforce Unlimited, RPS Security, RC Group Aust, Little Johnny, Involved Recruitment, Investmint, Genuine Constructions, EM and EN Investments and Compbiz, Bright Star Hire.

25. [908]

    Peter Abboud’s evidence is that he was a 10% shareholder of Banq Accountants from its inception in July 2009; and Ivana Cassaniti confirmed in cross-examination that she regarded Peter Abboud as a 10% owner of the business of Banq (at T 1120.48-49).

26. [909]

    Peter Abboud is an accountant. He says that he was a junior employee of Banq from July 2011, when it commenced trading, until December 2011. Peter Abboud says that, from January 2012 to June 2014, he was employed and worked for Banq when employed through the following companies: Workforce Unlimited from January 2012 to June 2012; RCG CBD from July 2012 to June 2013; and RC Group Aust from July 2013 to June 2014. His evidence is that, in July 2014, he was again employed directly by Banq and remained employed by that company until his resignation in March 2017.

27. [910]

    Peter Abboud says that, throughout the early period of his employment with Banq, he was trained by, reported to and managed by Gino Cassaniti; but that, through the later period of his employment with Banq, he reported to Gino Cassaniti and Fred Khalil. His evidence is that his tasks at Banq included data entry for accounts, accounts reconciliation, preparation of BAS and income tax returns of Banq’s clients.

28. [911]

    Copies of documents obtained by the ATO pursuant to the issue of s 353-10 Notices to NAB, show that Peter Abboud is (or was), amongst others, the signatory for bank accounts held by LFC Holdings as trustee for LFC Holdings Trust, Banq, Discobell as trustee for the Discobell Unit Trust, Kamikaze Teppanyaki (DH) Pty Ltd, Bluemine, Banq Accountants, Consolidated Wealth, GFP Holdings, and Reliance Cleaning (see Table E of the plaintiffs’ closing submissions for all of the NAB bank accounts on which Peter Abboud was a signatory.)

29. [912]

    Peter Abboud maintains that at no point was he a director, nor did he act as a director, of Banq; that he was not consulted about, nor involved in, any of the day to day management decisions of Banq; and that he considered his appointments as director of companies incorporated by Banq (and being a signatory to the bank accounts of those companies) as being “part of his job” of working at Banq. (That assertion is itself telling in that it does not bespeak an appreciation of his duty as a director and might be said to be consistent with the practice of appointing “straw” or “jump-on” directors.)

30. [913]

    Peter Abboud says that, on “rare” occasions when he processed or caused bank transactions for companies for whom he was a bank account signatory, that was done at the direction of one of Fred Khalil, Gino Cassaniti or Ivana Cassaniti (and see Peter Abboud’s affidavit affirmed 22 March 2019 at [29] where he described Ivana Cassaniti as in charge of the “administration of the office”).

31. [914]

    Ultimately, Peter Abboud contends that he was never a director or acted as a director of any of the Insolvent Companies, that he was not in any position in relation to the Insolvent Companies so as to owe them fiduciary duties; and that his involvement in any of the transactions pleaded with respect to the Insolvent Companies arose out of him fulfilling his day to day employment duties and occurred under the direction of Gino Cassaniti or Fred Khalil. To the contrary, the plaintiffs contend that Peter Abboud was a de facto or shadow director of Banq, pointing to the evidence in Ivana Cassaniti’s affidavit sworn 28 June 2019 at [18] to the effect that Peter Abboud was a partner in Banq who managed, hired and fired staff. It is noted that Ivana Cassaniti, who had provided 60% of the funds for the acquisition of the firm’s premises, trusted Peter Abboud as to his conduct of the business ([14]). Similarly, it is noted that Gino Cassaniti deposed, in his affidavit sworn 28 June 2019 at [24](d), that Peter Abboud was “….in fact an Equity Partner. Peter managed as a Partner would and was remunerated as a Partner”.

32. [915]

    The plaintiffs note that Peter Abboud’s proportionate shareholding in GFP Holdings (which acquired the Banq premises) is the same as his and Fred Khalil and Ivana Cassaniti’s proportionate shareholdings in Banq. It is said that GFP Holdings and Banq are entities through which Ivana Cassaniti, Fred Khalil and Peter Abboud conducted their affairs pursuant to a professional partnership as accountants (but also as property owners). The plaintiffs say that Ivana Cassaniti, Fred Khalil and Peter Abboud had a close business relationship and that it is unrealistic for them now to contend that their roles, and their knowledge of the affairs of the business (including all of the transactions that are the subject of these Proceedings), were independent of each other.

33. [916]

    As to the evidence of other defendants in respect of Peter Abboud’s role, Fred Khalil deposed, in his affidavit sworn 25 March 2019, that Peter Abboud started working at Banq in about mid 2008 and that he (Fred) and Peter Abboud “each managed the senior, intermediate and junior accountants” (at [7], [28]).

34. [917]

    Elias Nassar’s evidence was (at T 800.40-801.8) that “Peter [Abboud] was doing a lot of the bookkeeping, more the running around. He would – I think he was still studying at the time. I’m not sure. I was told he was still studying, and – back then, and then anything that he would do, and that would be overseen by Gino Cassaniti”. See also his evidence in cross-examination (at T 814.24-27, T 816.14-18, T 817.30-33 and T 827.45-47) that Gino Cassaniti oversaw anything Peter Abboud did and anything that was done for any of the Nassar companies. (The plaintiffs say that this evidence corroborates Peter Abboud’s evidence, in Peter Abboud’s affidavit sworn 22 March 2019 at [43], [55], [65] and [78], to the effect that if he did cause any of the impugned payments to be made, he did so at the direction of Gino Cassaniti, Fred Khalil or Ivana Cassaniti.)

35. [918]

    Frank Criniti’s evidence (at T 491.8-21), consistently with that of Elias Nassar was that Peter Abboud did “more of the labour work” and that:

36. [919]

    Mario Sande’s evidence (at T 786.15-25) was that Peter Abboud’s role in Banq was to do with the preparation of the BAS returns and the MYOB (and that he dealt with Fred Khalil and Gino Cassaniti more in relation to “structures” or “more technical” matters). Andre Abou-Antoun’s evidence (at T 761.50-762.17) was that Gino Cassaniti told him that he was a director of, and owned, Banq.

37. [920]

    I have referred above to Ivana Cassaniti’s (varying) affidavit evidence as to her role in the formation of Banq and to the administrative work that she carried out with Banq. The plaintiffs say that her evidence in her affidavits as to becoming a silent partner with no involvement in running the business is self-serving and disingenuous (and should not be accepted).

38. [921]

    In relation to Ivana Cassaniti’s presence at the Banq offices in York Street in 2009, Frank Criniti observed her presence “from time to time” (T 461.5); and that, unlike Gino Cassaniti, Peter Abboud and Fred Khalil, who each had a private office, Frank Criniti observed Ivana Cassaniti sitting “more with the girls” (T 462.20-24) at a “more hot desk sort of things” against a wall (T 461.31-34). Although George Said gave inconsistent evidence (to the effect that Ivana Cassaniti had an enclosed office at Banq), it is noted for Ivana Cassaniti that it was not suggested that George Said actually saw Ivana Cassaniti within the office. It is said by Ivana Cassaniti that George Said’s evidence should be discounted having regard to: Frank Criniti’s recollection that Ivana Cassaniti sat at a desk in the public space of the Banq offices and George Said’s prior statement in his ATO transcript to the effect that he did not know the name of Gino Cassaniti’s wife.

39. [922]

    Pausing here, as to the latter, it seems clear from the ATO transcript that George Said was clearly seeking to distance himself from Gino Cassaniti (in that in that interview he did not name Gino Cassaniti, and see his explanation of this in cross-examination). George Said’s professed lack of knowledge of Gino Cassaniti’s wife’s name would not be inconsistent with that.

40. [923]

    Fred Khalil’s evidence as to Ivana Cassaniti’s role in his affidavit sworn 25 March 2019 included that: Gino Cassaniti and Ivana Cassaniti were the major shareholders and the principals of Banq; and that Ivana Cassaniti controlled and was responsible for administration and the administration team (at [15]); that he (Fred), Gino Cassaniti and Ivana Cassaniti “all managed and supervised” Banq’s staff; and Gino Cassaniti and Ivana Cassaniti had the “final say” regarding all of the business operations of Banq (at [24); that he “sometimes assisted Ivana in managing administration, including accounts receivable and payable” (at [25]); that Ivana Cassaniti was a principal, organised payments from Banq’s bank account, oversaw all bank account transactions, managed and reconciled Banq’s trust accounts; and that Ivana and Gino Cassaniti would “check the bank account transactions on a regular basis and spot check transactions” (at [26]-[27]).

41. [924]

    Similarly, in his affidavit sworn 22 March 2019, Peter Abboud said that he was the authorised signatory of multiple bank accounts of Banq entities, together with Fred Khalil, Gino Cassaniti and Ivana Cassaniti; that he would occasionally complete bank transfers of these entities’ bank accounts on the instructions of Gino Cassaniti or Fred Khalil or Ivana Cassaniti (at [28]); and that Ivana Cassaniti was “in charge of the administration of the office” and he “would do work for her as instructed” (at [29]).

42. [925]

    With respect to the transactions pleaded in the RCG CBD third further amended statement of claim and the Bluemine third further amended statement of claim, including the Discobell transactions, Peter Abboud said (at [55], [65]) that he did not have a specific recollection of any of the transactions; it was possible that he was involved in one or more of the transactions either by the making of an electronic transfer or making entries into accounting ledgers; but that if he did do this for any of those transactions, it would have been on the instructions of Gino Cassaniti , Fred Khalil or Ivana Cassaniti.

43. [926]

    The plaintiffs contend that Ivana Cassaniti’s evidence as to the necessity for her, Fred Khalil or Peter Abboud to be signatories to the bank accounts of clients’ of Banq because they were shareholders in the business of Banq should not be accepted; though she then said she was not sure what that had to do with the necessity to be a signatory to the bank accounts (see at T 1122.32-1123.39).

44. [927]

    The plaintiffs contend that Ivana Cassaniti was well aware of why she, Fred Khalil and Peter Abboud were the signatory to those bank accounts; and that they were signatories because the Primary Conspirators (namely, Gino Cassaniti, Fred Khalil, Peter Abboud and George Khalil) controlled those companies, used them in the implementation of the Scheme and the Primary Conspiracy and needed access to those bank accounts to make transfers of funds between them to give the appearance that legitimate commercial activities were occurring.

Evidence as to advice given to Scheme Participants

1. [928]

   The plaintiffs characterise the advice given (by one or more of Gino Cassaniti, Fred Khalil and Peter Abboud) to the various Scheme Participants as broadly involving two steps: structural advice (i.e., advice as to the corporate structure to be adopted) and invoicing advice (i.e., as to the creation of false invoices to channel moneys or “funnel cash” into the respective corporate entities).

2. [929]

   The plaintiffs say that the structural and invoicing advice given to the various clients was essentially the same advice, pointing to the advice given: by Fred Khalil to Tanya and Michael Borg in relation to the payments into RCG CBD; by Fred Khalil and Peter Abboud to Andre Abou-Antoun and the AKA Parties in relation to the payments into Bluemine; by Gino Cassaniti to Elias Nassar in relation to the payments by the Wenman Group into RCG CBD; by Gino Cassaniti in relation to the payments into and out of the Criniti companies; and by one of Gino Cassaniti, Fred Khalil or Peter Abboud to Mario Sande in relation to payments into and out of the Statewide entities. The plaintiffs submit that the same advice given by different people (all of whom were principals of Banq) to different clients of Banq could not, and would not have occurred, in the absence of the Scheme.

3. [930]

   Specifically, at T 466.40-467.6, T 499.5-34, Frank Criniti’s evidence was that what Gino Cassaniti told him was that:

4. [931]

   Andre Abou-Antoun’s evidence was that, in about June 2010, either Peter Abboud or Fred Khalil advised the AKA Parties to set up a new company to deal with clients (T 626.37-45), as a consequence of which Banq arranged incorporation of AKA Civil in June 2010 (Ex K at 10975).

5. [932]

   As to the subsequent change of the AKA group structure in mid 2011, Andre Abou-Antoun’s evidence was to the effect (at T 622.3-623.23) that Fred Khalil told him and his brother Michael Abou-Antoun to incorporate another company (Earth Civil); that Peter Abboud said that they should restructure their corporate group such that AKA Civil would receive invoices from subcontractors and another company would invoice the clients (T 626); that Peter Abboud said that, as AKA Civil already existed, they should open another company (called AKA NSW) and then another company (LAM Haulage) to carry all the assets of the businesses such as trucks and machines and, in addition, that Earth Civil should be incorporated for wages, paying all the employees of the business (at T 624.8-16). Andre Abou-Antoun gave the following evidence (at T 623-624):

6. [933]

   Andre Abou-Antoun’s evidence (at T 627.20-25) was that he acted on that advice and that the companies that were incorporated at that time were AKA NSW and Earth Civil. Andre-Abou-Antoun says that Peter Abboud said to him that the wage-paying entity should be separated from the rest of the group (T 627.5-9). Andre Abou-Antoun also gave evidence to the effect that Fred Khalil told him that he had a company (Bluemine) that could issue invoices (T 642).

7. [934]

   As to the involvement of Bluemine, in his ATO interview, Andre Abou-Antoun had said:

8. [935]

   Andre Abou-Antoun then accepted that the tax benefit that was explained to him was the ability to claim a deduction on the income of the AKA entities for those amounts being paid to Bluemine (T 655.42-47). He also accepted in the ATO interview that he was told that Bluemine had an ability to issue inflated or exaggerated invoices.

9. [936]

   At T 631.1-18, questioned about this, Andre Abou-Antoun confirmed this but attributed it to a conversation in which he was told by Michael Abou-Antoun that:

10. [937]

    At T 642.6-37, Andre Abou-Antoun confirmed that in his ATO interview on 31 May 2018 he had given evidence that:

11. [938]

    The plaintiffs submit that, although Andre Abou-Antoun later attempted to resile from the truth of the statement made in the ATO interview (see at T 642.15-.35), Andre Abou-Antoun’s evidence in May 2018 was an admission against interest and was the truth. The plaintiffs emphasise this as being one of the most significant pieces of evidence in the Proceedings in that they say that: it directly involves Peter Abboud and Fred Khalil as proposing this arrangement, it directly involves Gino Cassaniti as the director of Bluemine and Earth Civil (an AKA company) and it directly involves George Khalil because the 2.5% fee was paid to RCG CBD by Bluemine and George Khalil was the controller of the RCG CBD bank account.

12. [939]

    At T 647.49-648.16, Andre Abou-Antoun confirmed that Peter Abboud and Fred Khalil had advised him “that they could provide a valuable opportunity to the AKA entities…” and that that valuable opportunity was “saving tax, the primary tax and – and the GST” (T 671.27-39). Andre Abou-Antoun’s evidence (at T 649.14-26) regarding the issue of inflated or exaggerated invoices issued by Bluemine was that his answers to the ATO (at 459-460) were true.

13. [940]

    The plaintiffs say that the use of false and fictitious invoices for the provision of alleged services is a common theme throughout the evidence. It is said that, like the invoices from Ignite Promotions to Blackrock Media for consulting, from RCG CBD to Ignite Promotions for labour hire, and from RCG CBD to State Wide Design for management fees, Bluemine issued false invoices to AKA Civil and AKA NSW for purported management/supervision charges (Ex K at 56339-56343).

14. [941]

    The plaintiffs say that the conversations attested to by Andre Abou-Antoun with Fred Khalil and Peter Abboud identify that the intention of setting up Bluemine was to facilitate the Scheme with the issuing of false and inflated invoices for the purpose of obtaining the tax savings that Andre Abou-Antoun was told by them would be obtained by the AKA Companies. It is said that this was the Scheme as explained and implemented (the plaintiffs refer to this as “the primary conspiracy in action”).

15. [942]

    Tanya Borg (at [24] of her affidavit sworn on 4 December 2018) deposes that during the course of an initial meeting with Fred Khalil in about mid 2012, shortly after she and her husband were referred to Banq, Fred Khalil advised her (and Michael Borg) to the effect that:

16. [943]

    During the course of her cross-examination, Tanya Borg gave the following (consistent) evidence regarding that meeting (at T 1383.19-40):

17. [944]

    Tanya Borg attests to further advice provided by Fred Khalil, namely that (her affidavit sworn 4 December 2018): “your accountant has recorded the equipment as being owned by the Company (Excavation) not Michael. I will work out the best way to transfer the property to the new company” (at [32]); “before it is transferred, you need a valuation. I will organise that for you but it will cost around ten thousand” ([33]); and that “I can structure those payments, I have a company called RCG, I can use that to make the payments to the old company” (at [34]).

18. [945]

    Pausing here, the plaintiffs emphasise that RCG CBD was not Fred Khalil’s company and they rely on this as indicating Gino Cassaniti’s involvement in the Scheme.

19. [946]

    In its verified amended defence filed in the RCG CBD Proceeding (at [8]), Statewide Printing has admitted that Gino Cassaniti, Fred Khalil and/or Peter Abboud of Banq Accountants was or were the accountant(s) and taxation adviser(s) of Statewide Printing and State Wide Design; and that, in 2012, Gino Cassaniti, Fred Khalil and/or Peter Abboud advised and recommended to the Statewide Parties that if they entered into a number of carousel payments between, Statewide Printing and State Wide Design, then Statewide Printing and State Wide Design could legitimately minimise the amount of tax which would otherwise be payable by them (see [144.7]-[144.7.3.3] of the RCG CBD third further amended statement of claim).

20. [947]

    At T 771.45-772.5, after having read through the transactions pleaded at [144.7]-[144.7.3.3] of the RCG CBD third further amended statement of claim, Mario Sande’s evidence was that he received advice from Banq about the implementation of those transactions (T 775.35-48); and that he could not recall which individual at Banq but he said that it would have been one of Gino Cassaniti, Fred Khalil or Peter Abboud (T 775.50-776.2); and that the advice he was given was “[j]ust to channel – legitimately channel my money from company A to company B” (at T 776.4-6).

21. [948]

    The plaintiffs say that, in relation to the Statewide Parties, it is to be inferred that Gino Cassaniti was involved in the Scheme Recommendation and implementation. It is said that, although Mario Sande could not always specifically recall which of three people at Banq (Gino Cassaniti, Fred Khalil or Peter Abboud) he dealt with for what aspect of the Scheme (T 775.35-776.2), that means that all did something in relation to Scheme as it applied to the Statewide Parties. It is said that, as each part of the Scheme was interrelated, any conversation with one of them about the Scheme must have implicitly involved the others in the Scheme; and that all must have known what the others were doing, since otherwise none of them would have known what particular thing it was that he had to do.

22. [949]

    Wenman Brimak in its defence (verified by Elias Nassar) in the RCG CBD Proceeding admitted that in about late 2012 or early 2013, Gino Cassaniti advised and recommended to the Nassar clients that if they entered into a number of carousel payments (between Blackrock Media, Ignite Promotions, RCG CBD and Wenman Brimak) then Blackrock Media, Ignite Promotions and Wenman Brimak could legitimately minimise the amount of tax which would otherwise be payable by them (at 7(d)).

23. [950]

    Elias Nassar’s evidence in relation to Bluemine was to the effect that Gino Cassaniti broadly explained a process for minimising tax and that, as Elias Nassar saw Gino Cassaniti as an expert, he “just went along with what he told me was the best thing to do” (T 802.1-20). Elias Nassar could not recall the exact conversation but said that it was along the lines of “having – issuing invoices for consulting services that he was doing and that Elias Nassar thought it would be legal at the time (T 802.30-38); Elias Nassar said that Gino Cassaniti said that “there was a company that he had that would issue the invoices”. His recollection was that Gino Cassaniti’s advice was that this would minimise the tax of Blackrock Media, Ignite Promotions and Wenman Brimak (T 802.26-804.30); that Gino Cassaniti told him that Banq was going to take a fee for the involvement of RCG CBD in the Scheme which would be the GST amount from the invoice (T 804.1-806.30).

Expert evidence

1. [951]

   In support of Gino Cassaniti’s assertion as to forged signatures he led expert evidence, which was ultimately subsumed by a joint expert report dated 5 March 2020 (Ex T). The plaintiffs say that the joint expert report does not support Gino Cassaniti’s contention that the signatures were forgeries. The joint conclusion of the experts (Ex T at 9) was that:

2. [952]

   The joint experts further concluded that (Ex T at 10):

Relevant legal principles – breach of fiduciary duty

1. [953]

   Firstly, I note that an ASIC record, pursuant to s 1274B of the Corporations Act, constitutes proof of, inter alia, the appointment of directors in the absence of evidence to the contrary (see Lewis Securities v Carter per Emmett AJA at [161]).

2. [954]

   Section 9 of the Corporations Act defines a director as follows:

3. [955]

   The relevant factors for consideration as to whether a person is a de facto director, having regard to the duties performed by that person in the context of the particular company, were outlined in Deputy Commissioner of Taxation v Austin (1998) 28 ACSR 565 (Commissioner of Austin) per Madgwick J and Chameleon Mining NL v Murchison Metals Ltd [2010] FCA 1129 per Jacobson J. They include: the size of the company and the allocation of the responsibilities; the internal practices or structure of the company; whether those outside the company considered the person to be a director; the duties that would be expected to be performed by a director in the relevant company (namely, top-level management functions); the duties actually performed by the person; whether others in the company considered the person a director; whether the company held out the person as a director; and whether the person held themselves out as a director. A person may still be a de facto director even if the company has a properly constituted and functioning board; and the title of the person (for example, as “consultant” or “manager”) is not determinative of the issue.

4. [956]

   The plaintiffs have referred to the observations by White J, as his Honour then was, as to the definition of “shadow director” in Buzzle Operations Pty Ltd (in liq) v Apple Computer Australia Pty Ltd (2010) 238 FLR 384; [2010] NSWSC 233 (Buzzle Operations), namely, that: in some circumstances, it is possible for a person to be both a shadow director and a de facto director (at [233]-[236]); it is not necessary that the instructions or wishes of the shadow director be given over the whole areas of corporate activity for which the directors are responsible (at [241]); the directors must be accustomed to act as directors of the company (and not in some other capacity) in accordance with the shadow director’s instructions or wishes regarding how the directors should so act (which means that a person is not a shadow director merely because they impose conditions on their commercial dealings with the company with which the directors feel obliged to comply) (at [242]-[243]); there must be a causal connection between the instruction or the wish of the shadow director and the directors acting on it; it is not sufficient if the act that was specified in the instruction is something that the directors would do irrespective of the instruction (at [244]-[247]); for the directors to be “accustomed to act” in accordance with the instructions or wishes requires “habitual compliance over a period of time” (at [248]); the directors collectively must be accustomed to act on the shadow director’s instructions or wishes and it is sufficient if a “governing majority” of the board is so accustomed to act.

5. [957]

   In Buzzle Operations, his Honour noted that it is not sufficient if executives who are not directors are accustomed to act on a person’s instructions or wishes (although such a person might be a de facto director) or if the instructions or wishes are given to a director in their capacity as an executive and not in his or her capacity as a director (at [250]); and that the instruction or wish need not be communicated directly by the shadow director to all or a governing majority of the directors (at [307]).

6. [958]

   As the plaintiffs note, the term “shadow director” colloquially refers to a person who, though not validly appointed as a director, is nonetheless a person in accordance with whose instructions or wishes the directors of the company are accustomed to act (and who is thus considered to be a director – see Standard Chartered Bank of Australia Ltd v Antico (1995) 38 NSWLR 290 per Hodgson J, as his Honour then was, where it was recognised that a body corporate may be a director). In their opening submissions, the plaintiffs contended that, in each case, Banq was a de facto or shadow director of the Insolvent Companies (citing Ho v Akai Pty Ltd (in liq) (2006) 247 FCR 205; [2006] FCAFC 159 (Ho v Akai) at [21] per Finn, Weinberg and Rares JJ); though it is not clear that any relief is sought consequent upon any such finding and this was not raised in closing submissions.

7. [959]

   Under the Corporations Act, the plaintiffs claim breaches of the duty to act with care and diligence, the duty to act in good faith and for a proper purpose and the duty not to misuse one’s position (Corporations Act, ss 180, 181(1) and 182(1)). The relevant provisions are as follows:

8. [960]

   As to the content of those duties, there seems to be no real dispute between the parties.

9. [961]

   As to the content of the duty of care and diligence imposed by s 180(1) of the Corporations Act, the plaintiffs refer to what was said in Australian Securities and Investments Commission v Cassimatis (No 8) (2016) 336 ALR 209; [2016] FCA 102 (Cassimatis (No 8)), where Edelman J (then sitting in the Federal Court) referred (at [450]-[495]) to Vrisakis v Australian Securities Commission (1993) 9 WAR 395 per Ipp J, as his Honour then was, and to Shafron v Australian Securities and Investments Commission (2012) 247 CLR 465; [2012] HCA 18 at [18] per French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ.

10. [962]

    The plaintiffs identify the principles arising from Cassimatis (No 8) as being that: the duty under s 180(1) requires a director or officer to balance the foreseeable risk of harm to the corporation (the magnitude of the risk and the likelihood of its occurrence) by a certain course of action or inaction, along with the burden (expense, difficulty and/or inconvenience) of taking alleviating action; “harm” refers to harm to any of the interests of the corporation; s 180(1) does not require proof of actual or prospective loss (or financial harm) to the corporation; the standard of care required to discharge the duty will depend upon the corporation’s circumstances, the director’s or officer’s position and whatever responsibilities the director or officer has; where the directors are the shareholders, that can impact considerably on the content of the duties owed to the corporation; however, the corporation is a separate legal entity and the shareholders cannot release directors/officers from their duty to the corporation under s 180(1), which has a public aspect; and that a director or officer who assumes vast responsibilities and exercises a very high degree of control within a corporation, as opposed to devolving functions and responsibilities to suitably experienced and qualified staff and allowing others to take an active role in participating in making decisions, will necessarily increase his or her level of exposure to a potential breach of s 180(1). The plaintiffs note that in Cassimatis (No 8) (at [487], [495]), the question posed was whether a reasonable person in the directors’ position would have seen that the conduct involved risk of injury to the company (see also ASIC v Rich at [7205]-[7206]).

11. [963]

    As to the duty to act in good faith in the best interests of the corporation and for a proper purpose (s 181(1)(a)-(b)), it is noted that while it “may be difficult to separate considerations that go to each of them they remain, conceptually, separate duties” (Bell Group Ltd (in liq) v Westpac Banking Corp (No 9) (2008) 39 WAR 1; [2008] WASC 239 at [4456] per Owen J).

12. [964]

    Whether the duty to act in the best interests of the company is determined objectively or subjectively remains unsettled. Black J summarised the current position as follows in In the matter of Colorado Products Pty Ltd (in prov liq) (2014) 101 ACSR 233; [2014] NSWSC 789 (Re Colorado Products) (at [420]):

13. [965]

    As in Re Colorado Products, it is not necessary here to explore the differences in approach in this regard.

14. [966]

    The plaintiffs note that, in determining what is in the best interests of the company, in certain circumstances (such as where the company is insolvent or approaching insolvency), the directors are required to take into account not only the interests of its shareholders (as a whole), but also the interests of its creditors (Spies v R (2000) 201 CLR 603; [2000] HCA 43 (Spies v R); Australian Securities and Investments Commission (ASIC) v Somerville (2009) 77 NSWLR 110 at [94]; [2009] NSWSC 934 (Somerville) at [37] per Windeyer AJ).

15. [967]

    As to the director’s duty to act for a proper purpose, the bulk of authority indicates that this is to be determined objectively, and it was not here in dispute (see, for example, Re Colorado Products at [421]; Re HIH Insurance Ltd and HIH Casualty and General Insurance Ltd; Australian Securities and Investments Commission (ASIC) v Adler (2002) 168 FLR 253; [2002] NSWSC 171 (ASIC v Adler) at [738]-[740] per Santow J; Somerville at [38]). The relevant principles to consider were distilled by Ipp J, as his Honour then was, (with whom Seaman J and Malcolm CJ agreed) in Permanent Building Society (in liq) v Wheeler (1994) 14 ACSR 109 at 137 as follows:

16. [968]

    Edelman J, then sitting in the Federal Court, expressed doubt in Australian Securities and Investments Commission v Drake (No 2) (2016) 340 ALR 75; [2016] FCA 1552 at [498] as to whether the “but for” test applies at the stage of determining a breach of the duty not to act for an improper purpose but did not determine the issue as “all parties assumed that it did and the case was conducted in that way”, (as is similarly the case here).

17. [969]

    As to the duty not to use one’s position improperly to gain an advantage for oneself or another or to cause detriment to the corporation, this is to be assessed objectively (Re Colorado at [432]-[433]; Taxa Australia Pty Ltd v G Wang (2018) 130 ACSR 531; [2018] NSWSC 1412 at [33] per Black J). Impropriety is established by “a breach of the standards of conduct that would be expected of a person in the position of the alleged offender by reasonable persons with knowledge of the duties, powers and authority of the position and the circumstances of the case” (R v Towey (1996) 21 ACSR 46 at 57 per Gleeson CJ (with whom Allen and James JJ agreed)). It is not necessary for the relevant advantage or detriment sought to be achieved to establish a breach of s 182(1) (Re Colorado at [432]).

18. [970]

    As to the content of directors’ duties, reference is also made by the plaintiffs to the following authorities: Re One.Tel Ltd (in liq); Australian Securities and Investments Commission v Rich (2003) 44 ACSR 682; [2003] NSWSC 186 (Re One.Tel) per Bryson J, as his Honour then was; Re City Equitable Fire Insurance Co Ltd (1924) 19 LI L Rep 93; Re Property Force Consultants Pty Ltd (1995) 13 ACLC 1051; [1997] 1 Qd R 300 per Derrington J.

19. [971]

    At common law and in equity, “directors owe duties of a fiduciary nature to act as best to promote the interests of the corporation whose affairs they are conducting” (Allco Funds Management Limited (recs and mgrs apptd) (in liq) v Trust Company (Re Services) Ltd (in its capacity as responsible entity and trustee of the Australian Wholesale Property Fund) [2014] NSWSC 1251 at [114] per Hammerschlag J; BCI Finances v Binetter at [258]-[259]). In particular, the plaintiffs note that, as a general proposition, the interests of a company include carrying on business in a manner which does not expose the company to liabilities to pay penalties and interest charges under income tax legislation, or to incur tax debts which will render it insolvent (citing Gleeson J in BCI Finances v Binetter at [264]).

20. [972]

    As to the duty of care owed by directors, the plaintiffs submit, by reference to Deputy Commissioner of Taxation v Clark (2003) 57 NSWLR 113; [2003] NSWCA 91 (Clark) at [108]-[109] per Spigelman CJ (with whom Handley and Hodgson JJA agreed), that while the standards of skill and diligence may vary depending on the circumstances, there is a core, irreducible requirement of skill and of diligence that “involves an objective test”. The requirement of diligence demands the director to take reasonable steps to place themselves in a “position to guide and monitor the management of the company” (see also Daniels v Anderson (1995) 37 NSWLR 438 (Daniels v Anderson) at 501, 503 per Clarke and Sheller JJA).

21. [973]

    Further, equity also imposes on directors, as fiduciaries, “proscriptive obligations – not to obtain any unauthorised benefit from the relationship and not to be in a position of conflict” (Breen v Williams at 113; see also Mills v Mills (1938) 60 CLR 150; [1938] HCA 4 at 185 per Dixon J, as his Honour then was; and Pilmer v Duke Group at [74], [78] per McHugh, Gummow, Hayne and Callinan JJ; Richard Brady Franks Ltd v Price (1937) 58 CLR 112; [1937] HCA 42 at 142 per Dixon J, as his Honour then was). If these obligations are breached, the fiduciary must account for any profits and make good any losses arising from the breach.

22. [974]

    There is no dispute as to the above principles.

23. [975]

    As to the question of to whom such duties are owed by directors (as to which, again, there was here no real dispute), the plaintiffs point to Kinsela v Russell Kinsela Pty Ltd (in liq) (1986) 4 NSWLR 722 at 730 per Street CJ (with whom Hope and McHugh JJA agreed) for the proposition that interests of creditors intrude where a company is insolvent. However, it was made clear by the High Court in Spies v R (at [93]-[95]) that directors do not owe an independent duty to, and enforceable by, creditors (by reason of their position as directors) (see also Bilta (UK) Ltd (in liq) v Nazir [2015] UKSC 23; [2015] 2 WLR 1168 (Bilta) at [125]-[126] per Toulson and Hodge LLJ).

24. [976]

    The plaintiffs accept that the extent to which directors are required to take into account the interests of creditors in their management of the company is contentious but say that, as a general proposition, the best interests of the company will depend on various factors including solvency (citing Angas Law Services Pty Ltd (in liq) v Carabelas (2005) 226 CLR 507; [2005] HCA 23 at [67] per Gummow and Hayne JJ).

25. [977]

    As to the import of acquiescence or consent by shareholders to a course of conduct, the plaintiffs note that the general principle (that any act that falls within the corporate capacity of a company will bind it if it is done with the unanimous consent of all shareholders) does not enable the shareholders to bind the company itself to a transaction which constitutes a fraud on its creditors (citing Re Halt Garage (1964) Ltd [1982] 3 All ER 1016 at 1037 per Oliver J; Rolled Steel Products (Holdings) Ltd v British Steel Corporation [1986] Ch 246; Kinsela at 730) nor can shareholders authorise a breach of the directors’ duty to the company that affects the interests of creditors (citing Kinsela at 732). Reference is made by the plaintiffs to Macleod v R (2003) 214 CLR 230; [2003] HCA 24 at [30], where Gleeson CJ, Gummow and Hayne JJ said that the “[t]he self-interested ‘consent’ of the shareholder, given in furtherance of a crime committed against the company, cannot be said to represent the consent of the company” (and at [74] per McHugh J and [131] per Callinan J). Further, the plaintiffs cite Lord Mance in Bilta at [38] where he stated that “[a]ll the shareholders of a solvent company acting unanimously may in certain circumstances…be able to authorise what might otherwise be misconduct towards the company. But even the shareholders of a company which is insolvent or facing insolvency cannot do this to the prejudice of its creditors, and the company’s officers owe a particular duty to safeguard the interest of such creditors”.

26. [978]

    Finally, the plaintiffs refer to Edelman J’s conclusion (in Cassimatis (No 8) at [523]) that where the shareholders acquiesce to a course of conduct then that acquiescence might affect the practical content of the duty but that such acquiescence “does not eliminate or relieve the duty where there are other relevant interests of the corporation apart from the interests of the shareholders”.

27. [979]

    The plaintiffs further point to authority for the proposition that moneys held to the credit of a company’s bank account represent moneys under the control of the company’s directors held on trust for the company’s purposes; and that for the directors to apply those moneys otherwise is a breach of trust and hence, that directors have been considered and treated as trustees of moneys which come into their hands or under their control (see Selangor United Rubber Estates Ltd v Craddock (No 3) [1968] 1 WLR 1555 (Selangor) at 1577 per Ungoed-Thomas J; Re Lands Allotment Company [1894] 1 Ch 616 at 631 per Lindley LJ, at 637-639 per Kay LJ); and the application of that proposition by Brightman J in Karak Rubber Co Ltd v Burden (No 2) [1972] 1 WLR 602 at 633. Reference is also made in this context to Dal Pont and Chalmers, Equity and Trusts in Australia (4th ed, 2007, Lawbook Co) at 38.45-50. As to the application of Selangor in Australia, reference is made to Consul Development Pty Ltd v DPC Estates Pty Ltd (1975) 132 CLR 373 (Consul Development v DPC Estates) at 398 per Gibbs J; and at 411 per Stephen J, as their Honours then were.

28. [980]

    Section 79 of the Corporations Act provides that:

29. [981]

    Section 79 is a definitional provision, the purpose of which is to give content to the expression “involved in a contravention” where it appears in the Corporations Act (Australian Securities and Investments Commission (ASIC) v ActiveSuper Pty Ltd (in liq) (2015) 235 FCR 181; [2015] FCA 342 (ASIC v ActiveSuper) at [422] per White J). I note for present purposes that ss 181 and 182 of the Corporations Act include that phrase, whereas s 180 does not.

30. [982]

    Accessorial liability under s 79 demands actual knowledge of the essential facts constituting the contravention (ASIC v ActiveSuper at [433]; Lifeplan Australia Friendly Society Ltd v Ancient Order of Foresters in Victoria Friendly Society Ltd (2017) 250 FCR 1; [2017] FCAFC 74 (Lifeplan) at [104]; ASIC v Somerville at [40]); however, knowledge can be inferred from “the fact that the person is exposed to the obvious, but that is not to say that constructive knowledge of any of the essential facts is sufficient” (ASIC v Australian Investor Forum Pty Ltd & Ors (No 2) [2005] NSWSC 267 at [112]).

31. [983]

    There is a clear similarity between s 79(c) and the second limb of Barnes v Addy, which I discuss in greater detail below (Lifeplan at [94], [107]).

32. [984]

    There is again no dispute as to the principles applicable where there are claims for accessorial liability or liability as knowing assistant to a breach of fiduciary duty (within the second limb of Barnes v Addy). A person who assists a fiduciary to breach his or her fiduciary duties, with knowledge of a dishonest and fraudulent design on the part of the fiduciary, is liable as though that person were the fiduciary (see Farah Constructions at [160]; Hasler v Singtel Optus at [75]; [109]; [123]; [129]-[139] per Leeming JA; Harstedt Pty Ltd v Tomanek (2018) 55 VR 158; [2018] VSCA 84 (Harstedt v Tomanek) at [80]; Lewis v Nortex Pty Ltd (In Liq); Lamru Pty Ltd v Kation Pty Ltd [2005] NSWSC 482 (Lewis v Nortex) at [33] per Hamilton J), including the liability to disgorge property transferred by another person in breach of that person’s fiduciary duty, as well as in personam liability (see Sheahan v Thompson (No 2) [2015] NSWSC 871 (Sheahan v Thompson) at [141]-[146] per Rein J).

33. [985]

    The elements of the second limb of Barnes v Addy may be itemised as follows (see Farah Constructions at [160]; Lewis Securities v Carter at [185]-[187]; Harstedt v Tomanek at [70]): (a) the existence of a fiduciary duty owed by the fiduciary; (b) a dishonest and fraudulent design on the part of the fiduciary; (c) assistance by the third party in that design; and (d) knowledge on the part of the third party of the circumstances constituting that design.

34. [986]

    There will be assistance where, but for the action or inaction of the third party, the breach of fiduciary duty would not have occurred; and there may also be assistance where the third party has facilitated a breach of fiduciary duty that would have occurred in any event (see Harstedt v Tomanek at [116]-[118]; and see JD Heydon and MJ Leeming, Jacobs’ Law of Trusts in Australia (7th ed, 2006) at [1339] in this regard) but neither assistance nor knowledge, alone, is enough (see in particular Harstedt v Tomanek at [120]-[121]). (The Khalil defendants submit that, although not free from doubt, acquiescence by a third party with knowledge, in the breach of fiduciary duty would not constitute knowing assistance (referring to the discussion in Harstedt v Tomenak at [119]). I note that in Harstedt v Tomenak (at [119]) Santamaria, McLeish and Niall JJA did not determine “whether, or when, an omission or acquiescence may amount to assistance in a dishonest and fraudulent design under the second limb of Barnes v Addy” as the case had not been pleaded as such, as is similarly the case here.

35. [987]

    It is well recognised that the knowledge that a defendant must have, in order to be liable under the second limb of Barnes v Addy, is that which falls within one of the first four categories of knowledge in Baden Delvaux (Farah Constructions at [174]-[178]; Lewis Securities v Carter at [186]), namely: (i) actual knowledge, (ii) wilfully shutting one’s eyes to the obvious; (iii) wilfully and recklessly failing to make such enquiries as an honest and reasonable person would make; or (iv) knowledge of circumstances that would indicate the facts to an honest and reasonable person.

36. [988]

    The state of mind of a director who is acting within the scope of his or her authority will generally be attributed to the company where there is a duty on the part of the director to communicate that knowledge to the company (as there will be if a director knows information which is important to the affairs of the company) (see Beach Petroleum at 569, 574 per von Doussa J; Belmont Finance Corporation v Williams Furniture Ltd (No 2) [1980] 1 All ER 392 (Belmont Finance v Williams Furniture) at 404; see also Commissioner of Taxation v Macquarie Health Corp Ltd (1998) 88 FCR 451 at 500 per Emmett J, sitting in the Federal Court as his Honour then was; Tim Barr Pty Ltd v Narui Gold Coast Pty Ltd [2008] NSWSC 1070 (Tim Barr v Narui Gold Coast) at [104] per Barrett J, as his Honour then was).

37. [989]

    However, where a corporation is the victim of fraud or other wrongdoing such as breach of fiduciary duty, the ordinary rule of attribution does not apply (Beach Petroleum at 571-572; Bilta at [7] per Lord Neuberger P; Permanent Trustee Co Ltd v O’Donnell (2009) 15 BR 28,1010; [2009] NSWSC 902 at [369]-[371] per Price J). The authors of Halsbury’ Laws of Australia distil the relevant principles as follows:

Plaintiffs’ submissions

1. [990]

   In closing submissions, the primary conspiracy is contended to be an agreement between the conspirators whereby they would engage in conduct: to utilise the Insolvent Companies to create tax benefits or other benefits not known to the plaintiffs, for clients of Banq and/or for other natural persons or companies associated with the conspirators and/or for themselves; to organise and arrange to be carried out payments (into the companies by corporations and natural persons who had no lawful obligation to make payments in; and out of the companies to corporations and natural persons who had no legal entitlement to receive payments out; sometimes to enable payees to claim tax deductions, or other tax benefits not known to the plaintiffs; and to enable payees to receive and hold money for their benefit, some tax-free or with minimised tax obligations; and/or to create other benefits to payers and payees not known to the plaintiffs) to the effect that no transaction would be of any benefit to any of the Insolvent Companies; to denude the Insolvent Companies of all assets whilst knowing that the company was highly likely to incur tax liabilities; to wind up the Insolvent Companies (having left them insolvent with no ability to pay taxation obligations and not caring that the companies would be exposed to tax obligations including assessments by default, penalties and interest). The plaintiffs contend for a finding that the agreement was dishonest and fraudulent.

2. [991]

   The plaintiffs contend in the statements of claim in each of the Proceedings that various representations were made to the Scheme Participants. It is said that parts of those representations included structural and “invoicing” advice as part of the arrangement, including the incorporation of “invoicing” companies. The plaintiffs say that “invoicing” is no genuine business activity per se, and that in these Proceedings, the conduct of “invoicing” was a euphemism for devious conduct.

3. [992]

   The plaintiffs contend that the Scheme is to be inferred from the whole of the evidence in these Proceedings, in combination. They say that the co-incidence of significant events within the respective corporate lives of the Insolvent Companies is not an accident and is the primary conspiracy in operation, referring to: the common dates of windings up; the changes and “backdatings” of directorships; the purported (false) claims as purported creditors by one or more of the conspirators; and the lodgement of BAS immediately prior to windings up.

4. [993]

   The plaintiffs say that the coincidences in each of the cases of the volume, overall size and modus operandi of these transactions, within a 24 month period, were such that they could not have occurred without the recommendation of Banq and its principals, noting that in each case Banq was the tax agent for the Paying Participant and the Receiving Participant and invariably their registered office; in each case Banq was the tax agent and registered office of the Insolvent Company; and, additionally, Banq controlled the bank accounts of the Insolvent Companies.

5. [994]

   Similarly, the plaintiffs say that the coincidences of volume, size and benefits of these transactions to the Scheme Participants, predicated on false invoices were such that the transactions could not have occurred without their knowledge and approval. It is said that it is inherently implausible that the Scheme Participants did not either know, or closed their eyes or maintain reckless indifference to the veracity of transactions in which they paid money for nothing in return or received money without providing anything in return.

6. [995]

   As to Bluemine, it is noted that the AKA Civil and AKA NSW transactions began in November 2011. The plaintiffs say that those transactions were orchestrated by Peter Abboud and Fred Khalil who told Andre Abou-Antoun that they would utilise Bluemine for the AKA transactions. It is noted that at T 642.6-37, Andre Abou-Antoun confirmed his statement in his record of interview with the ATO as follows:

7. [996]

   As to Earth Civil, the director of which was Gino Cassaniti, the plaintiffs say that Earth Civil was involved with the Scheme that was set up by Peter Abboud and Fred Khalil for AKA Civil and AKA NSW. Cash payments totalling $965,000 were withdrawn from Earth Civil’s bank account by Michael and Andre Abou-Antoun. At T 706.10, Andre Abou-Antoun said that “[w]e got advice to withdraw the money out of the account of Earth Civil”.

8. [997]

   The plaintiffs say that at T 678.36-679.34, although Andre Abou-Antoun attempted to resile from his evidence in the ATO transcript, it is clear that his evidence had been that the money was taken out because “you were being asked to do what Mr Cassaniti said to you”. It is noted that, just prior to that, in the ATO interview Andre Abou-Antoun is recorded as saying that Mr Cassaniti said to him “[w]ell, he basically said “Just transfer the money and, then take the money out of the account after it was transferred”. At T 678.1-9, when asked why AKA Civil was making payments to Earth Civil, Andre Abou-Antoun said “[i]t was – it was a device that Gino Cassaniti and Fred Khalil”.

9. [998]

   As to Diamondwish and Rackforce, the plaintiffs say that there was a complete absence of any genuine business records regarding the transactions for Diamondwish and Rackforce.

10. [999]

    The plaintiffs’ submissions analyse the complicity of each of the Primary Conspirators in the alleged Scheme by reference to the evidence as to the following matters: the relevant client relationship(s) and recommendations made to the clients by the Primary Conspirators (see above); the Primary Conspirator’s use and control of the corporations; the use of their accounting and systems; the payments in and out of the Insolvent Companies; the benefits to the Scheme Participants; the benefits to the Primary Conspirators and/or associated entities; and the Primary Conspirators’ control of directorships and creditors’ voluntary winding ups.

11. [1000]

    I propose to summarise the submissions made by the plaintiffs and the response by each of the active defendants to those submissions and the plaintiffs’ reply submissions specifically referable to that defendant before addressing the plaintiffs’ submissions as to the more minor players and the defences that were common as between the respective defendants (relevantly, the joint release defences and causation defences).

Submissions and Findings – Gino Cassaniti

1. [1001]

   I have already referred to Gino Cassaniti’s relationship with the respective Scheme Participants and the recommendations or advice it is said that he gave to them.

2. [1002]

   As to the AKA Parties (relevant to the claims in the Earth Civil and Bluemine Proceedings), the plaintiffs rely on the following as evidence of Gino Cassaniti’s involvement in the recommendation to use Earth Civil in the Scheme: first, Gino’s principal role at Banq; second, what they describe as Gino Cassaniti’s “all-pervasive” presence in the affairs of Earth Civil, as its director; and, third, the evidence from Andre Abou-Antoun that Gino Cassaniti told him and his brother, Michael Abou-Antoun, to withdraw cash from Earth Civil after either AKA Civil or AKA NSW had deposited the money.

3. [1003]

   It is said that Andre Abou-Antoun’s evidence (that Gino Cassaniti advised him and his brother, Michael Abou-Antoun, to make payments to Earth Civil) would not be plausible unless Andre Abou-Antoun regarded Gino Cassaniti as being as much involved in the establishment and use of Earth Civil as Fred Khalil; and that, had he not believed that, Andre Abou-Antoun would not have first obtained advice from Gino Cassaniti about the payments and then acted on Gino Cassaniti’s advice to transfer money in and then take it out of Earth Civil.

4. [1004]

   As to the recommendation for the use of Bluemine for the Scheme, the plaintiffs point to Andre Abou-Antoun’s evidence to the effect that such advice was from Fred Khalil and Peter Abboud. Referring to Andre Abou-Antoun’s evidence that Fred Khalil told him that he had a company (Bluemine) that could issue invoices (something that it is said Fred Khalil could only have suggested if he had been working “hand in glove” with Gino Cassaniti, since the plaintiffs say that Gino Cassaniti was in fact the controller of Bluemine), the plaintiffs say that, in these circumstances, it is to be inferred that Fred Khalil’s recommendation of the Scheme utilising Bluemine did not occur without the concurrence and adoption of Gino Cassaniti (and that such concurrence and adoption directly involved Gino Cassaniti in the making of the recommendation).

5. [1005]

   The plaintiffs say that it is proper to infer Gino Cassaniti’s conspiratorial participation in the recommendation involving the use of Bluemine in the Scheme because at the same time: Gino Cassaniti was a principal of Banq; Banq was the accountant and tax agent of the AKA Parties, Earth Civil and Bluemine; between December 2012 and May 2013 Bluemine received $3.85 million from the AKA Parties; and at all times Gino Cassaniti was a director (including as a shadow or de facto director) of Bluemine (including the period that money was paid to the AKA Parties less an amount of $61,860 paid to RCG CBD, at a time when Gino Cassaniti was a director of RCG CBD).

6. [1006]

   As to RCG CBD, the plaintiffs accept that there is no evidence of Gino Cassaniti directly representing the Scheme to Tanya Borg (or Michael Borg). However, they say that Gino Cassaniti’s role in recommending the Scheme to the Borg Parties arises: first, by reason of his directorship of RCG CBD (and that Fred Khalil must have spoken to him about the proposed Borg transactions); and, second, by his indirect relationship (through being a principal of Banq and his participation as a conspirator), as a result of which it is said that Gino Cassaniti is as culpable as if he had made the recommendation himself.

7. [1007]

   In this regard, the plaintiffs refer to Tanya Borg’s evidence as to the structuring advice given to her by Fred Khalil (that he had a company called “RCG” that could be used). It is said that Gino Cassaniti’s involvement in that advice can be inferred because Fred Khalil did not “have” a company called RCG CBD (rather, Gino Cassaniti was the director and shareholder of RCG CBD) and, therefore, for Fred Khalil to “use” RCG CBD to “make payments to the old company” would have required Gino Cassaniti’s complicity (see Tanya Borg’s affidavit sworn 4 December 2018 at [34]). Hence, it is said that there can be no suggestion that the amounts of money paid through RCG CBD for the Borg Parties (in accordance with the advice/recommendation) occurred without Gino Cassaniti’s knowledge and approval. Second, in relation to Borg Family (which purchased the equipment from Excavation), the plaintiffs point to the fact that it was the trustee of the Borg Family Trust and that Gino Cassaniti settled the Borg Family Trust (witnessed by Fred Khalil) on 21 May 2012 (the same day that Borg Family was incorporated).

8. [1008]

   The plaintiffs say that there was no genuine commercial documentation in support of any of the impugned transactions recorded in Table 5.1 of the plaintiffs’ closing submissions (the payment by Borg Civil to Bluemine of $25,000 on 28 June 2013; and payment within one week by Bluemine of $20,000 to Banq and of $5,000 to RCG CBD) and that recorded in Table 5.5 (the payment by Borg Family of $15,000 to Bluemine on 30 July 2013 and payment by Banq of that amount to Monica Abboud (the former 7th defendant and sister-in-law of Peter Abboud) one week later. It is noted that those transactions occurred while Gino Cassaniti was: the director of Bluemine; a principal of Banq; the person who, together with Fred Khalil, approved clients’ accounts and tax returns; the director of Bluemine, who commenced its liquidation within three weeks after the last transaction on 30 July 2013; and a director of RCG CBD.

9. [1009]

   The plaintiffs thus contend that Gino Cassaniti was involved in recommending and implementing the Scheme for the Borg Parties’ transactions with Bluemine. They maintain that it was impossible for the Scheme to be implemented without the Primary Conspirators’ combined conduct. In those circumstances, it is submitted that Gino Cassaniti certainly knew of and approved the recommendation and implementation of the Scheme in relation to the Borg Parties.

10. [1010]

    As to Diamondwish and Rackforce, the plaintiffs point to Frank Criniti’s evidence of his introduction to Gino Cassaniti (and Banq). The plaintiffs say that although Gino Cassaniti was not a director or shareholder of Diamondwish or Rackforce, it is clear from Frank Criniti’s evidence that the corporate structure of the Criniti companies (which included Diamondwish and Rackforce) was set up on Gino’s advice and that, when Frank Criniti authorised the impugned payments as a director of those companies, Frank Criniti was acting on Gino Cassaniti’s advice (reference here being made to Frank Criniti’s evidence at T 508.27-509.9).

11. [1011]

    The plaintiffs submit that Gino Cassaniti’s role and complicity in recommending the Scheme to and implementing the Scheme for the Wenman Parties is to be inferred from Elias Nassar’s evidence to the effect that, when he received an invoice from RCG CBD, he thought it was the consulting company that Gino Cassaniti had been talking about (T 808.48, referring to the email correspondence and invoices at Ex K at 36321-36324). Additionally, it is noted that benefits from the Wenman transactions flowed to Banq, of which Gino Cassaniti was a principal. The plaintiffs have identified in Table 5.1 of their submissions that, on 25 June 2013, Ignite Promotions paid $385,880 to Bluemine. On 26 June 2013, Bluemine paid Wenman Brimak the sum of $350,835 and, on 27 June 2013, Bluemine paid Banq the sum of $35,045 (one-eleventh of $385,880). The plaintiffs note that the payments as set out in Table 3.3 of their submissions demonstrate that the fee retained by RCG CBD was $71,087 (which was eleven-tenths of the $781,955 paid by the Wenman Parties to RCG CBD). The plaintiffs point out that all of the impugned Wenman Parties payments were made between 30 January 2013 and 6 March 2013 while Gino Cassaniti was a director of RCG CBD.

12. [1012]

    As to the AKA Parties, the plaintiffs point to Aris Zafiriou’s evidence (see his affidavit sworn 9 March 2017 at [53]-[58]) to the effect that the ATO’s investigations revealed that the AKA Parties engaged different labour hire companies to perform services periodically but for no longer than 12 months at a time; and it is said that two of those companies, Demolition and Earth Civil, are directly linked to Gino Cassaniti through his directorship of those companies.

13. [1013]

    Relevantly, the plaintiffs say that Gino Cassaniti’s involvement in the deployment of Earth Civil for the purposes of the Scheme is evidenced by: his directorship of Earth Civil; his relationship with the AKA Parties; his principal role and interest in Banq (noting that the Banq Address was the registered office for Earth Civil); his joint role with Fred Khalil in approving the accounts and tax returns of clients; and his direct role in orchestrating Earth Civil’s change of director and shareholder to himself. Reference is made to the evidence of Andre Abou-Antoun (see above) that Gino Cassaniti instructed him to withdraw $200,000 from Earth Civil’s bank account when, the plaintiffs say, that Gino Cassaniti must have been aware of a debt owing to the ATO.

14. [1014]

    As to Gino Cassaniti’s alleged involvement in the use of Bluemine for the AKA Parties, the plaintiffs say that the impression that Andrew Barsa sought to create in the witness box (of a businessperson who was at home, being a director, and running Bluemine efficiently) is not to be believed. The plaintiffs say that in fact what occurred was a complete abdication by Andrew Barsa of the responsibility of a director. It is submitted that it is clear from Andrew Barsa’s evidence that he had little idea what was going on in Bluemine; the plaintiffs noting that Andrew Barsa did not know the activities in which Bluemine was engaged; whether the company was up to date with its tax compliance obligations or how much money it had in its bank account, despite being a signatory to the bank account. (I agree.)

15. [1015]

    The plaintiffs emphasise that the one time that Andrew Barsa did refer to dealing directly with Gino Cassaniti was when he wanted to resign his directorship of Bluemine (T 914.41-915.2). It is further noted that Gino Cassaniti’s Counsel did not challenge Andrew Barsa’s evidence that Andrew Barsa asked Gino Cassaniti if he could resign his directorship of Bluemine; and that Gino Cassaniti does not contest the circumstances leading to the liquidation of Bluemine (though he denies any involvement in them). The plaintiffs say that, for the reasons set out below in relation to Gino Cassaniti’s involvement in the liquidation of Bluemine, that denial is not to be believed.

16. [1016]

    As to RCG CBD, it is said that (apart from deploying the voluntary winding up provisions of the Corporations Act as a means of evading liabilities but keeping the benefit of assets by transfers to related entities without bona fide consideration for RCG CBD and the other Insolvent Companies), the evidence is that the assets for which Borg Family purportedly made the payments to RCG CBD (Table 3.5), came from Excavation and Excavation was then wound up by creditor’s voluntary winding up on 27 February 2013 without having been paid by RCG CBD for the assets which it transferred to Borg Family.

17. [1017]

    The plaintiffs say that the extent of Gino Cassaniti’s control over and administration of the Criniti companies (which included Diamondwish and Rackforce) is to be inferred from correspondence between persons at the Criniti companies and the Primary Conspirators, after the relationship between Frank Criniti and Gino Cassaniti had “disintegrated”. In this regard, the plaintiffs again point to the email chain of 30 September 2011 in which Gino Cassaniti’s email signature identified his position as “Accountant” (Peter Abboud’s affidavit sworn on 22 March 2019, Annexure A; Ex K at 14566; see above at [275]). The plaintiffs argue that, had Gino Cassaniti not controlled and influenced the Criniti companies to the extent that they allege, there would have been nothing for Gino Cassaniti to resist relinquishing after the relationship with Frank Criniti had collapsed.

18. [1018]

    The plaintiffs say that Involved Recruitment’s participation in the Scheme was different from other Scheme Participants in that: first, it was an instrument of Gino Cassaniti (rather than a client of Banq); and, second, George Said, as its director, was a “figurehead” of the company acting on Gino Cassaniti’s bidding (though it is said that George Said bears no less culpability for wrongdoing executed under Gino Cassaniti’s instructions). The plaintiffs say that George Said’s evidence (see above) is directly relevant to the issue of Gino Cassaniti’s use of corporate entities for his own purposes.

19. [1019]

    In particular, the plaintiffs say that the effect of George Said’s evidence (at T 872.35-47) is that, in his capacity as a director of Involved Recruitment, George Said operated entirely on instructions from Gino Cassaniti alone. The plaintiffs say that, when cross-examined about this by Counsel for Gino Cassaniti (at T 889.6-12; and see T 890-891.30; T894.10-14; T 894.31-39 and T 897.45-50) George Said’s evidence was undiminished. (I agree.)

20. [1020]

    The plaintiffs say that it is clear from George Said’s evidence that Gino Cassaniti was the “real controller” of Involved Recruitment. Reference is made in this regard to George Said’s evidence (at T 869.40-870.48) that: he was paid for his work as a director of Involved Recruitment; Gino Cassaniti told him the amount to take from the bank in payment for his services; alternatively, sometimes Gino Cassaniti would give him cash; that cash payment was to pay for the work that he had been doing; Gino Cassaniti would tell him to take $800 or $1,200 or $1,500; on occasions, George Said would withdraw large sums of cash and if he withdrew a sum in the order of $200,000 cash, generally that money would go to Gino Cassaniti at Banq’s premises. George Said’s evidence (at T 843.44-844.1) was to the effect that he paid whoever Gino Cassaniti asked him to via email. George Said’s evidence was that he would get an email like a time sheet, then invoice it over, then he would get a payment and he would pay “whoever needed it to be directed to” (T 843.50). The plaintiffs say that it is clear that all payments from Involved Recruitment were made at Gino Cassaniti’s behest. Reference is also made to George Said’s evidence as to the receipt of documents from Banq and the sending out of invoices and the like (see above).

21. [1021]

    The plaintiffs say that no evidence of genuine commercial documents has been adduced by any of the defendants. From this, together with the evidence of George Said, the plaintiffs say that it is to be inferred that there were no genuine commercial documents to support the payments in and out of Involved Recruitment which, on the evidence from George Said, were made under the ultimate control and direction of Gino Cassaniti.

22. [1022]

    From this, the plaintiffs say that it is to be inferred that Gino Cassaniti’s involvement with Involved Recruitment was such that he was a shadow director of it before he was recorded as a director with ASIC; and that he caused $934,399 to be paid to RCG CBD between 7 September 2012 and 30 May 2013 (Table 3.13), during which period Gino Cassaniti was the director of RCG CBD (and, it is said, a principal of Banq).

23. [1023]

    The plaintiffs say that Gino Cassaniti obtained a significant benefit from Involved Recruitment in that he received hundreds of thousands of dollars in cash delivered to him at Banq. George Said’s evidence on this aspect of his instructions from Gino Cassaniti (as recorded in his ATO transcript of 3 June 2019 – see Ex U) was to the effect that: on occasion he was instructed to deliver amounts of cash to a car park; on other occasions he delivered (what the liquidator notes were large) amounts of cash to the office; he delivered amounts of cash to a person at Banq; whenever he delivered amounts of cash to Banq it was always to the same person; that person was not Fred Khalil or Peter Abboud but, out of fear for his own safety, George Said would not say who that person was. When cross-examined in the present Proceedings, George Said’s evidence (at T 858.44-859.5, T 870 and T 871.30) was that the (unnamed) person to whom he had referred (as recorded in the ATO record of interview) was Gino Cassaniti.

24. [1024]

    The plaintiffs point out that Gino Cassaniti had notice, before the hearing commenced on 3 February 2013, that the plaintiffs had subpoenaed George Said to give evidence at the hearing and that the plaintiffs intended to rely on various representations contained in his ATO record of interview, including those representations about delivery of cash. The plaintiffs emphasise that Gino Cassaniti did not respond to this evidence by denying that large amounts of cash were paid to him; rather, that the only way Gino Cassaniti dealt with this evidence was through his counsel in cross-examination, when it was put to George Said that his evidence on this subject was not true. It is submitted that, against evidence of such a serious nature with attendant ramifications, Gino Cassaniti’s conduct was not what would ordinarily be expected from an honest person. The plaintiffs draw from the fact that the veracity of George Said was not challenged on this issue (noting Counsel’s obligation not to cross-examine the veracity of George Said without instructions) that Gino Cassaniti’s denial of such an allegation was false to his knowledge.

25. [1025]

    The plaintiffs say that Involved Recruitment was utilised at Gino Cassaniti’s behest. It is noted that Involved Recruitment was liquidated on the same day as RCG CBD and that Gino Cassaniti was the director of Involved Recruitment at the time, having taken over that role from George Said one month before on 16 May 2012.

26. [1026]

    As to Gino Cassaniti’s role in the accounting systems necessary to implement the Scheme, the plaintiffs says that this is to be inferred from the centrality of Banq in all of the impugned transactions and from the evidence of various Scheme Participants.

27. [1027]

    The plaintiffs accept that there was no direct evidence from Andre Abou-Antoun about Gino Cassaniti’s involvement in the accounting systems required to implement the Scheme in relation to Earth Civil. However, it is submitted that the extent of Gino Cassaniti’s involvement in the accounting (and consequential tax agent work) for the implementation of the Scheme for the AKA Parties regarding Earth Civil is evidenced by the following: the direct evidence from Fred Khalil and Peter Abboud about Gino Cassaniti’s principal role at Banq generally, together with the fact that Ivana Cassaniti invested all of the funds in the business and had a 60% interest in the business; that Banq was a registered tax agent and Fred Khalil was its supervising tax agent (see Aris Zafiriou’s affidavit sworn 9 March 2017 at [27]); that Banq was the accountant and tax agent for Earth Civil and the AKA Parties (Ex K at 10885, 12682-12688); that Gino Cassaniti was the sole director and shareholder of Earth Civil; that Banq had access to the AKA Parties’ MYOB and ledgers for the purposes of doing their accounts and tax (noting Andre Abou-Antoun’s evidence as to Banq’s access to the AKA group companies’ MYOB file – see above); and that Gino Cassaniti and Fred Khalil together approved client tax returns and that Fred Khalil lodged them (Fred Khalil’s affidavit sworn 25 March 2019 at [24]).

28. [1028]

    Further evidence of Gino Cassaniti’s knowledge of, and involvement in, the accounts for Earth Civil is said to be found in the ATO running balance account for Earth Civil exhibited to the liquidator’s affidavit sworn 7 June 2018 (at [41]; see Ex K at 11700-11715), which records that Earth Civil did not lodge its BAS until 29 May 2013, well after the impugned payments in and out of Earth Civil.

29. [1029]

    The plaintiffs say that it is clear from the above, combined with the fact that the Form 484 recording Gino Cassaniti as the sole director and shareholder of Earth Civil (signed by Gino Cassaniti on 1 January 2013) was not lodged until 28 May 2013, that Gino Cassaniti was aware of the absence of accounting and tax returns for Earth Civil when he was in control of the fundamental administrative affairs of the company as set out in the Form 484 (see Table A; Ex K at 10241).

30. [1030]

    As to Gino Cassaniti’s alleged involvement in the accounting systems of the AKA Parties in relation to Bluemine, it is again noted that Andre Abou-Antoun’s evidence was to the effect that he acted on the advice of Banq (of which firm the plaintiffs say Gino Cassaniti was a principal); and that Banq had access to the AKA Parties’ MYOB files and ledgers for the purposes of doing their accounts and tax (as already referred to above). The plaintiffs rely on the same matters as relied on (and set out above) in relation to Earth Civil for their contention as to the extent of Gino Cassaniti’s involvement in the accounting (and consequential tax agent work) for implementation of the Scheme as it related to Bluemine for the AKA Parties (noting, among other things, that Gino Cassaniti was the director of Bluemine).

31. [1031]

    As to Gino Cassaniti’s alleged involvement in the Borg Parties’ accounting systems, the plaintiffs point to Tanya Borg’s evidence to the effect that Banq had complete access to the Borg Parties’ MYOB accounting system and used it to prepare the BAS and tax returns for the Borg Parties (see above). The plaintiffs say that the “misconduct” exposed by the cross-examination of Tanya Borg (referred to above) in relation to the ledgers and taxation returns (see Ex W) reflects adversely on Gino Cassaniti’s truthfulness because he in effect “oversaw” all of it (noting again that, in addition to doing the accounts for the Borg Parties, Banq was the tax agent for Borg Civil and Borg Family).

32. [1032]

    It is said that Fred Khalil knew that the BAS for Borg Family recorded that Borg Family claimed input tax credits for the equipment payments to RCG CBD; and that a sum equivalent to the payments to RCG CBD from Borg Family was paid to Borg Family (less the sum of $5,000) because he was the one who completed the BAS and who arranged the RCG CBD payments to Borg Family (together with George Khalil as the controller of RCG CBD’s bank account). The plaintiffs say that Gino Cassaniti’s knowledge of this is to be inferred from all of his conduct referred to in these Proceedings; particularly, his sole directorship of RCG CBD together with his principal role at Banq.

33. [1033]

    The plaintiffs point to the 2013 tax return lodged for Borg Family by Banq in which depreciation was claimed on the equipment purchased as a deductible expense; and that the depreciable amounts claimed were in accordance with the payments as recorded in the Borg Family ledger. Again, it is said that Fred Khalil (who completed the tax return) knew this because he was the one who arranged the RCG CBD payments to Borg Family (together with George Khalil as the controller of RCG CBD’s bank account); and that Gino Cassaniti’s knowledge is to be inferred upon the same basis as referred to above.

34. [1034]

    The plaintiffs say that further evidence of Gino Cassaniti’s involvement or knowledge of the Borg Parties’ BAS and tax returns is to be found in the uncontested evidence of Fred Khalil in his affidavit sworn 25 March 2019 at [24] to the effect that Gino Cassaniti approved all of Banq’s clients’ accounts and tax returns. The plaintiffs note that Gino Cassaniti did not require Fred Khalil for cross-examination, nor did he subpoena Fred Khalil to give evidence. It is said that, combined with Gino Cassaniti’s failure to make himself available for cross-examination (as opposed to mere assertion as to his role at Banq), it can confidently be inferred that Gino Cassaniti was knowingly involved in the Borg Parties’ accounting for the transactions comprised in the Scheme as it applied to them.

35. [1035]

    As to the Criniti companies, the plaintiffs point to Frank Criniti’s evidence and that of Tarun Shah (see above) as to Gino Cassaniti’s involvement in the accounting processes of the companies.

36. [1036]

    As to Gino Cassaniti’s alleged involvement in the payments in and out of AKA Parties’ accounts (relevant to the Earth Civil Proceeding), in relation to the $965,000 paid into Earth Civil by AKA NSW and AKA Civil, which was then paid out in cash to Michael Abou-Antoun and Andre Abou-Antoun (Tables 1.2 and 1.3), reliance is placed by the plaintiffs on the evidence of Andre Abou-Antoun in his ATO interview to the effect that Gino Cassaniti said to transfer the money in and then take the money out of the account after it was transferred (Ex O at 195); and his evidence in the present Proceedings that those payments were made to Earth Civil because Gino Cassaniti advised them to do so (at T 679-680). The plaintiffs contend that Andre Abou-Antoun’s attempt to resile from this later in cross-examination should not be accepted (at T 679.12-680.45). (I did not understand Andre Abou-Antoun to be attempting to “resile” from his evidence that Gino Cassaniti had given the advice; rather, what he seemed to be attempting to clarify was that the advice was not given to him directly by Gino Cassaniti.)

37. [1037]

    The plaintiffs say that further evidence of Gino Cassaniti’s knowledge is to be inferred from the fact that he was the sole director and shareholder of Earth Civil during the whole of the period that deposits and withdrawals were occurring. It is submitted that it is unlikely in the extreme that such an amount of money (nearly $1 million) could pass through Earth Civil and yet its sole director not know about it (and that this is particularly so when the same director, Gino Cassaniti, shortly thereafter instigated the company’s creditors’ voluntary winding up). (A similar submission is made in relation to Gino Cassaniti’s knowledge of moneys passing through each of the Insolvent Companies with which he was involved.)

38. [1038]

    As to Gino Cassaniti’s alleged involvement in payments in and out for the AKA Parties in relation to Bluemine, the plaintiffs say that cash payments and those identified as going to unknown recipients (less fees to Primary Conspirators as identified in Table 5.2) can be assumed to be for the benefit of the AKA Parties because Andre Abou-Antoun’s evidence was to the effect that an equivalent amount of all the money that the AKA Parties paid to Bluemine came back to one of their entities, less a fee (and they say that that evidence was not challenged).

39. [1039]

    The plaintiffs note that Gino Cassaniti does not contest the fact of these payments but simply denies any knowledge of them. The plaintiffs say that that denial should not be believed; rather, they say that Gino Cassaniti’s knowledge is to be inferred from the whole of his conduct referred to in these Proceedings and, in particular, the fact that (as they contend was the case) he was a director (or deemed or shadow director) of Bluemine during the whole of the period that the impugned AKA transactions were occurring. Again, it is submitted that it is unlikely in the extreme that that amount of money could pass through Bluemine and yet its director not know about it (the plaintiffs again pointing to the fact that Gino Cassaniti shortly thereafter instigated the company’s creditors’ voluntary winding up).

40. [1040]

    The plaintiffs say that, from this, it is further to be inferred that Gino Cassaniti was aware of and complicit in the issue of false invoices to justify the payments into Bluemine because Andre Abou-Antoun’s evidence is to the effect that, of all the payments made by AKA Civil and AKA NSW on receipt of invoices from Bluemine, only one (“very, very, very small”) payment was for a genuine invoice. The plaintiffs contend that as a matter of the ordinary course of human experience it is not plausible that, during Bluemine’s existence, Gino Cassaniti was unaware that it had received in excess of $3.8 million (or, knowing the receipt of those amounts, did not enquire as to what the payments were for).

41. [1041]

    As to Gino Cassaniti’s alleged involvement in the Borg Parties’ payments in and out in relation to RCG CBD, the plaintiffs contend that Gino Cassaniti’s role in the Scheme as used by the Borg Parties was indispensable, noting that he was the sole shareholder and director of RCG CBD, which received payments from Borg Civil and Borg Family, and that RCG CBD was the company that subsequently made payments to Borg Civil and Borg Family. It is again submitted that any assertion that Gino Cassaniti was unaware of transactions involving these amounts of money is not credible.

42. [1042]

    The plaintiffs also point to Gino Cassaniti’s involvement in substantively similar equipment transfer transactions involving RCG CBD. It is said that these transactions were documented by false invoices and that Borg Family, which received the equipment, did not pay for that equipment. The plaintiffs say that this transaction was similar to the Bluemine truck purchase transactions where the purported transfer of trucks was documented by false invoices and the trucks were transferred by Bluemine for no consideration.

43. [1043]

    It is submitted that the similarity of each of those transactions, and the fact that Gino Cassaniti, Fred Khalil and Peter Abboud as principals of Banq played various roles in each of those transactions, enables the inference that the similarity of the transactions was not an innocent coincidence and that Gino Cassaniti’s role as the common denominator was also not an innocent coincidence. It is noted that Fred Khalil advised Borg Family to enter into the RCG CBD transaction when Gino Cassaniti was a director of RCG CBD which he caused to be wound up shortly after the Borg Family had obtained the benefits of the RCG CBD transaction.

44. [1044]

    Further, it is said that Peter Abboud arranged for the incorporation of Bluemine to acquire trucks for $590,000 which were subsequently transferred to Multipower Tipper Pty Ltd (Multipower Tipper) and Jola Holdings. It is said that Bluemine did not obtain consideration for the transfers (which it is said were supported by false documents showing consideration of $590,000). The plaintiffs again say that that this happened when Gino Cassaniti was a director of Bluemine and that he caused it to be wound up shortly thereafter.

45. [1045]

    The plaintiffs say that: (i) the purported purchases of equipment from RCG CBD and Bluemine obtained GST credits for their acquisitions and that RCG CBD and Bluemine incurred countervailing GST liabilities; (ii) there was no genuine supporting documentation for the transactions; (iii) Gino Cassaniti was the director of RCG CBD and Bluemine and he instigated the creditors’ voluntary liquidations of those companies; and (iv) RCG CBD and Bluemine were left unable to pay their taxation liabilities to the ATO which was their only legitimate creditor.

46. [1046]

    As to the impugned Diamondwish and Rackforce transactions (referred to above), the plaintiffs again say that there was no genuine or legitimate documentation for these transactions, as no services were provided for the Diamondwish payments; and that those payments were in accordance with Gino Cassaniti’s advice. The plaintiffs say that Gino Cassaniti’s involvement in payments in and out of Diamondwish is exemplified by the payment of $250,000 to Elle Barikhan. This is such as, the plaintiffs say that the $250,000 was transferred from RCG CBD to Diamondwish on 21 December 2012 and then from Diamondwish to Elle Barikhan on 24 December 2012, while Gino Cassaniti was a director of RCG CBD.

47. [1047]

    The plaintiffs say that, from this, it should be inferred that Gino Cassaniti was involved in the payments for which there was no legitimate purpose and no genuine documentation.

48. [1048]

    As to Gino Cassaniti’s alleged involvement in benefits to the AKA Parties (in the Earth Civil Proceeding), the plaintiffs note that the payments in and out of Earth Civil are not in dispute. The plaintiffs say that there was no credible evidence of a legitimate business purpose to support the cash payments of $965,000 to Michael and Andre Abou-Antoun (Tables 1.1 to 1.3 of the plaintiffs’ submissions) and that, in cross-examination, Andre Abou-Antoun was unable sensibly to explain what he had done with that cash withdrawn from Earth Civil’s bank account (see at T 681.5-683.25). The plaintiffs say that Andre-Antoun’s evidence of having used the money for payment of wages (to people whom he could not recall other than “Richard – operator – Julie Tag”), for unspecified business expenses and labor hire is not credible.

49. [1049]

    It is submitted by the plaintiffs that, where evidence Michael Abou-Antoun received part of the cash benefits (as set out in Tables 1.1 to 1.3) is not disputed, and where Michael Abou-Antoun (who they say would be regarded as being in the AKA Parties’ “camp” to the extent that he is not a party) chose not to give evidence, it should be inferred that his evidence would not have assisted the AKA Parties (and that inferences can be drawn against the AKA Parties, that might otherwise have been answered had Michael Abou-Antoun given evidence) (see at [567] as to the Jones v Dunkel issue).

50. [1050]

    The plaintiffs contend that, since use of the cash was left unexplained, it can be inferred that the AKA Parties utilised the Earth Civil transactions for themselves, tax free, and for other benefits or purposes not known to the plaintiffs.

51. [1051]

    It is said that in these circumstances, where Gino Cassaniti’s Counsel did not obtain a concession from Andre Abou-Antoun to exculpate Gino Cassaniti in relation to the advice about taking the money out of Earth Civil, and Gino Cassaniti did not seek to bring Michael Abou-Antoun before the court, it may comfortably be inferred that the payments were in accordance with Gino Cassaniti’s advice and/or recommendation.

52. [1052]

    As to Gino Cassaniti’s alleged involvement in benefits to the AKA Parties by reference to the impugned Bluemine transactions, the plaintiffs again point to Andre Abou-Antoun’s sworn testimony to the ATO on 31 May 2018 and 31 July 2018 that the AKA Parties would save 30% on tax (referred to above)

53. [1053]

    Again, it is said that the extent of Gino Cassaniti’s knowledge of and involvement in the benefits from the implementation of the Scheme as it related to Bluemine for the AKA Parties is to be inferred from the matters addressed above concerning his complicity in the: relationship with the client; recommendation of the Scheme as it related to Bluemine; use of Bluemine as a corporate vehicle for the Scheme; and accounting work done for the client.

54. [1054]

    The plaintiffs reiterate that the benefits explained to Elias Nassar (of the Wenman Parties) by Gino Cassaniti would be tax benefits.

55. [1055]

    As to Diamondwish and Rackforce, the plaintiffs point to Frank Criniti’s evidence to the effect that payments in and out of Diamondwish and Rackforce were to obtain the cash generated by his businesses to him and others tax free (at T 536.4-24). As to direct cash benefits, the liquidator deposes that Frank Criniti (and his wife, Rima Criniti) received payments of $2,499,000 from Diamondwish (see his affidavit sworn 8 February 2017 at [56]).

56. [1056]

    The plaintiffs say that Frank Criniti’s evidence about benefits and use of companies for dishonest purposes was not confined to Diamondwish and Rackforce in the Criniti companies, noting Frank Criniti’s evidence (at T 520-521.02) to the effect that Gino Cassaniti said to him that the operations and set up of Auswide were to save money on the luxury car tax and stamp duty.

57. [1057]

    The plaintiffs says that the benefits to the Criniti Scheme Participants, like the benefits to the Primary Conspirators and associated entities, were funded by Frank Criniti’s breach of fiduciary duty to Diamondwish and Rackforce in participating in the Scheme by allowing the payments in and out of Diamondwish and Rackforce (as set out at Tables 7 and 9).

58. [1058]

    The plaintiffs point to Frank Criniti’s evidence that, in undertaking the actions that were in breach of his duties, he was doing what Gino Cassaniti advised him to do; his evidence being that Gino Cassaniti advised him what to do and then put in place the corporate entities necessary to do it. It is said that Banq put in place the companies and accounting systems to facilitate payments which Frank Criniti authorised on Gino Cassaniti’s advice.

59. [1059]

    As to the benefits allegedly flowing from the AKA Parties to Gino Cassaniti and associated entities from moneys flowing through Earth Civil, the plaintiffs say that these were obtained from the AKA Parties’ transactions with Bluemine.

60. [1060]

    It is said that Gino Cassaniti’s knowing participation in the benefits of the Scheme can be inferred from Andre Abou-Antoun’s evidence to the effect that, before he entered into the impugned transactions, he understood that Banq would be paid a fee, together with the ASIC records proving Gino Cassaniti’s directorships of companies which received money from the transactions, and the oral evidence by various witnesses of Gino Cassaniti’s principal role at Banq. It is submitted that Gino Cassaniti was a principal of Banq and that it is inherently implausible that he was so disinterested in the business that he was unaware of the sources of the money that it received.

61. [1061]

    As to the alleged benefits flowing from AKA Parties to Gino Cassaniti and associated entities in relation to the Bluemine transactions, the plaintiffs contend that Gino Cassaniti knew and expected that benefits would flow from the AKA Parties to companies of which he was a director (such as the $61,860 that RCG CBD received while Gino Cassaniti was the sole director and shareholder – see Table 5.2; Table A) in light of: Andre Abou-Antoun’s evidence to the effect that, before he entered into the transactions comprising the Scheme, he understood that Banq would be paid a fee; the evidence of Gino Cassaniti’s participation in the recommendation and implementation of the Scheme relating to Bluemine for the AKA Parties, (see above); and the coincidence of similar payments of fees from other Scheme Participants. The plaintiffs refer, by way of example, to the evidence from the Wenman and Statewide Parties to the effect that Gino Cassaniti was the person at Banq who provided an effectively identical recommendation from which the Wenman Parties knew that Banq would be taking a fee.

62. [1062]

    Reference is again made to Ivana Cassaniti’s evidence from her affidavit sworn 3 March 2020 at [9] that “Gino formed Banq Accountants and Advisors Pty Ltd with Fred and Peter”. Again, it is submitted that it is inherently implausible that Gino Cassaniti was so disinterested in the business that he was unaware of the source of the money that it received.

63. [1063]

    As to the benefits to Gino Cassaniti and associated entities of the impugned RCG CBD transactions, the plaintiffs point both to benefits directly linked to particular clients and indirect benefits.

64. [1064]

    As to the former, the plaintiffs note that (see Table 3.5) Borg Family and Borg Civil paid $618,000 to RCG CBD between September 2012 and May 2013 and, of that money, RCG CBD then paid $580,000 to Borg Civil. It is noted that, on the face of the transactions, RCG CBD retained $38,000 (when Gino Cassaniti was the sole director, secretary and shareholder). In these circumstances the plaintiffs say that it is to be properly inferred that Gino Cassaniti and Fred Khalil were working “hand in glove”.

65. [1065]

    As to the latter, it is said that, in addition to fees for provision of the Scheme as applicable to particular clients, the Primary Conspirators and associated entities received large sums of money at various times. The plaintiffs say that, due to the amounts of money involved, it was not possible that Gino Cassaniti knew nothing of the transactions where the money passed through RCG CBD and Bluemine, of which companies he was either the sole director or, they contend, the de facto director.

66. [1066]

    Payments totalling $920,415 were made by RCG CBD to Banq in the period 10 September 2012 to 30 May 2013 (see Table 3.2). The plaintiffs say that no explanation has been provided by any of the Primary Conspirators as to the basis for those payments. The payments to Banq from RCG CBD and Bluemine total $1,514,060 in the 2013 financial year, in which time Banq had substantial clients including the Criniti companies, the Borg Parties, the AKA Parties, the Wenman Parties and the Statewide Parties. The plaintiffs say that at least a significant part of those payments from Bluemine and RCG CBD were not disclosed as income in Banq’s 2013 profit and loss statement (considering $1,575,371 was disclosed) (Ex K at 34233).

67. [1067]

    As to Diamondwish and Rackforce, the plaintiffs say that Gino Cassaniti’s knowing involvement in Frank Criniti’s breaches of fiduciary duty can be inferred from evidence of his direct and indirect benefits from those breaches (those indirect benefits including benefits to associated entities); referring to the following payments: first, the payment of $250,000 from Diamondwish to Elle Barikhan for no consideration at Gino’s direction (see Table 7.4), said to be to the benefit of Gino Cassaniti by reference to the fact that he (the sole shareholder), together with George Khalil, was a director of RCG CBD, which paid the sum of $250,000 to Diamondwish three days before Diamondwish made the payment to Elle Barikhan; second, the payment on 28 December 2011 from Diamondwish to Banq of $110,000 (Diamondwish second further amended statement of claim at [123(b)]; Table 7.3); third, the payment by Rackforce of $88,000 to Banq on 26 July 2013 (Rackforce third further amended statement of claim at [77(d)]; Table 9.2).

68. [1068]

    It is said that, in light of Frank Criniti’s evidence about the nature and extent of his relationship with Gino Cassaniti, it is to be properly inferred that Gino Cassaniti was directly involved in obtaining the benefit of the payments for Banq of which he was a principal.

69. [1069]

    The plaintiffs say that further evidence of Gino Cassaniti’s centrality to the conspiracy should be inferred from the common way in which directors of Banq’s clients were routinely changed and the way in which Banq’s corporate clients were wound up, while Gino Cassaniti was a principal of Banq. I have referred above to the modus operandi said to have been employed in that regard. It is submitted that the modus operandi in respect of the winding up of each of the Insolvent Companies and the absence of information provided to the liquidator in each case is so similar as to be beyond innocent coincidence.

70. [1070]

    Reference is also made to the non-compliance by Insolvent Companies with BAS reporting obligations until just before the companies’ winding up (see for example, Diamondwish and Rackforce), during the period that Banq had been the accountant and tax agent for the companies (see liquidator’s affidavit sworn 8 February 2017 (filed in the Diamondwish Proceeding) at [71]); and that, in response to requests for documents from the Insolvent Companies, very little documentation was produced (see as already noted above and see the liquidator’s affidavit sworn 8 February 2017 (filed in the Diamondwish Proceeding) at [38]-[47] and [80]).

71. [1071]

    Gino Cassaniti’s administrative control is said to be evident from the fact that he was the person who signed the relevant Form 484s shortly before the Insolvent Companies went into liquidation and that he was the director who placed the companies into liquidation.

72. [1072]

    As to the proofs of debt lodged in the liquidation of each of the Insolvent Companies, it is said that all of the putative debts are for alleged unpaid invoices or outstanding loans; and that, in a number of the proofs of debt (in Earth Civil, four of those five proofs of debt), Gino Cassaniti is either the claimant or a director of each of the claimants (see for Earth Civil Table D.2 of the plaintiffs’ closing submissions). As already noted, the liquidator rejected all of these proofs of debt for lack of documentation. The plaintiffs contend that the proofs of debt highlights the use of false claims based on non-existent invoices to support or justify spurious transactions due to the fact that all of the rejected proofs of debt: are for rounded amounts; relate to undocumented debts; and are not supported by any documentation.

73. [1073]

    The plaintiffs point, in particular, to the fact that Banq’s own claims for unpaid fees for Earth Civil (of $65,000) were rejected for lack of documentation, arguing that it is not credible for an accounting firm not to have records of the amounts invoiced for unpaid fees. It is said that if there was a proper basis for making the claim, it is inconceivable that Banq would have lost those records between the time of making the claim and when called upon by the liquidator to verify the claim (and hence, that it can confidently be inferred that there were never any records because no services were provided). Thus, it is submitted that the lodgement of the claim was a dishonest misrepresentation.

74. [1074]

    As to Earth Civil, the liquidator’s evidence (see the liquidator’s affidavit affirmed 8 February 2017 (filed in the Earth Civil Proceeding)) is to the effect that: (at [36]-[38]) in response to his request of Gino Cassaniti on 4 July 2013 for financial records he was provided with BAS for the periods 1 July 2011 to 31 March 2013 together with a Payroll Activity Summary for financial year ending 30 June 2013 and Employee PAYG summaries for the same period; (at [38]) on 8 August 2013, he sought confirmation from Gino Cassaniti and Banq that there were no other Earth Civil books and records in their possession, and he did not receive any response; (at [52]-[53]) that the majority of Earth Civil’s BAS were lodged approximately one month prior to his appointment (8 June 2013 which was also about the time that the Form 484 recording Gino Cassaniti as the sole shareholder and director was lodged); (at [60]-[63]) that Earth Civil failed to keep financial records that correctly recorded and explained the company’s transactions, financial position and performance which would have enabled true and fair financial statements to have been prepared and audited. The liquidator’s evidence was that Earth Civil did not keep all of the financial records that he would have expected for a company with sales disclosed in its BAS of $1,211,212 or sales as disclosed in its bank statements of $1,598,215. (It is noted that Gino Cassaniti’s Counsel did not challenge the liquidator in respect of this evidence.)

75. [1075]

    The plaintiffs say that it is to be concluded from this evidence of the liquidator: first, that Gino Cassaniti was aware of the request for information because he did provide, or caused to be provided, the BAS in lieu of primary and supporting financial records, and, second, that Gino Cassaniti orchestrated the timing of the change of directorship and the filing of Earth Civil’s BAS one month prior to instigating the creditor’s voluntary winding up.

76. [1076]

    As to Gino Cassaniti’s involvement in the winding up of Bluemine, the plaintiffs submit that, irrespective of Andrew Barsa’s earlier evidence to the effect that he conversed with Peter Abboud or Fred Khalil regarding Bluemine, Andrew Barsa evidence to the effect that, when he wanted to cease his directorship, he needed to ask Gino Cassaniti. The plaintiffs say that from this it can be inferred that, irrespective of day to day operational control, Gino Cassaniti maintained overall control of Bluemine as the decision-maker who determined Bluemine’s director.

77. [1077]

    It is noted that on 26 August 2013, Gino Cassaniti signed the minutes of members meeting appointing a liquidator and that, for the duration of Bluemine’s corporate life, Banq was its registered office and tax agent.

78. [1078]

    Again, as to the proofs of debt lodged in the liquidation of Bluemine (see Table D.2) it is noted that all of the claimed debts are for alleged unpaid invoices or outstanding loans; and that, in two of the three proofs of debt, Gino Cassaniti is either the claimant or the principal of each of the claimants (Banq). All of these proofs of debt were rejected by the liquidator for lack of documentation (see liquidator’s affidavit sworn 7 June 2018 at [23]). Again, the plaintiffs point to the features referred to in relation to the Earth Civil claims which are mirrored in relation to Bluemine (surprisingly rounded amounts, undocumented debts, and lack of documentation) as well as the fact that Banq’s own claim of $20,000 for unpaid fees was rejected for lack of documentation (again, the lodgement of such a claim is said to have been a dishonest misrepresentation).

79. [1079]

    The minutes of the meeting of creditors of Bluemine of 12 September 2013 (Ex K at 11571-11573) note that Gino Cassaniti and Banq had appointed Fred Khalil their proxy and that he attended the meeting by telephone; and that, after some discussion about whether or not the books and records of the company had been received, the liquidator said that Fred Khalil was in the process of collating the records of the company and they would be delivered in due course. The plaintiffs submit, again, that Fred Khalil’s undertaking to collate records must have been in his capacity as a principal at Banq, because he was not an officer or shareholder of Bluemine and would not otherwise have known whether any books or records existed. The minutes also record a query as to whether there had been “phoenixing activity”, of which Fred Khalil disavowed any knowledge.

80. [1080]

    Again, it is noted that Fred Khalil asserts in his affidavit sworn 25 March 2019 that Gino asked him to meet the liquidator and assist in completing the liquidation forms and that Gino Cassaniti denied this yet he did not require Fred for cross-examination (see Gino Cassaniti’s affidavit sworn 28 June 2019 at [20], read as an assertion). It is said that, as there had been “some discussion” about the status of the books and records of the company in the meeting at which the ATO was present, it is clear that Fred Khalil knew more about the affairs of Bluemine than a mere proxy holder for the proofs of debt (otherwise he would not have provided such an undertaking) and that Fred Khalil either shirked his undertaking (and did nothing at all) or he must have spoken with Gino Cassaniti (who, being a director of Bluemine and principal of Banq at the same time would be the person reasonably anticipated to know where Banq were keeping such records, or who at Banq was in charge of such records). It is submitted that Gino Cassaniti knew what Fred Khalil was doing; and, to that extent at the very least, Gino Cassaniti was further implicated in controlling and using Bluemine’s liquidation for his own ends.

81. [1081]

    The plaintiffs that further evidence of Gino Cassaniti’s “connivance” in Bluemine’s liquidation is to be found in the liquidator’s affidavit sworn 7 June 2018. The liquidator’s evidence is to the effect that: (at [25]) it was apparent from the ATO running balance account re GST that Bluemine lodged its BAS on 5 July 2012 and 30 July 2013; (at [28]) the liquidator sent letters to Gino Cassaniti, Andrew Barsa and Banq requesting they deliver books and records, in response to which Alison Hanna of Banq on 30 October 2013 said “[w]e don’t actually know who would have books and records” (Ex K at 11617); (at [29]) in response to his requests the only documents received from Bluemine and/or Banq were copies of BAS for the 2013 financial year and a Form 509 Summary of Affairs of a Company completed by Gino Cassaniti dated 1 August 2013 (Ex K at 11642); and (at [31] and [32]), in his experience the books and records with which he was provided were “deficient and unreliable”. (It is noted that Gino Cassaniti’s Counsel did not challenge the liquidator in respect of this evidence.)

82. [1082]

    The plaintiffs say that, from this evidence, it is to be concluded that Gino Cassaniti was aware of the request for information (because he did provide, or cause to be provided, the Summary of the Company’s Affairs in lieu of primary and supporting financial records) and that he orchestrated the timing of the change of directorship and the filing of Bluemine’s BAS shortly prior to instigating the creditor’s voluntary winding up. It is also submitted that Fred Khalil must have reported back to Banq and Gino Cassaniti about the ATO’s concerns that this liquidation indicated “phoenixing” activity. The plaintiffs point to the disconformity between the statement made at the creditors’ meeting (in Fred Khalil’s presence) that Fred Khalil was collating the records of the company and that they would be delivered in due course and the statement made by Banq (through Alison Hanna) on 30 October 2013 to the effect that Banq did not “actually know who would have the books and records”.

83. [1083]

    The plaintiffs say that RCG CBD’s creditors’ voluntary liquidation exhibited the common features of the other Insolvent Companies’ liquidation (i.e., Banq was the registered office for RCG CBD; Banq was the accountant and tax agent for RCG CBD; Banq took care of corporate administrative tasks such as lodging Form 484s; and Banq or an associated entity lodged a proof of debt). It is noted that Gino Cassaniti was the director who placed RCG CBD into liquidation. The plaintiffs say that Gino Cassaniti’s signature as a director on the resolution appointing Mitchell Ball as the liquidator of RCG CBD constitutes an admission by Gino Cassaniti that he was a director of RCG CBD (Ex K at 55825). The plaintiffs say that this, coupled with the filing of the Form 484, either by Gino Cassaniti or with his consent or knowledge (see his affidavit sworn 11 April 2019 at [13]) constitutes an admission that he was a director of RCG CBD from 16 May 2012; and that this evidence supports the ASIC records’ prima facie position.

84. [1084]

    As to the proofs of debt lodged in the liquidation of RCG CBD (see Table D.1 of the plaintiffs’ submissions), it is noted that (again) all of the putative debts are for unpaid invoices or outstanding loans; that Gino Cassaniti is recorded as either the claimant or a director or principal of each of the claimants; that each was rejected by the liquidator for lack of documentation and that they exhibit the same features as those in the other liquidations (rounded amounts, undocumented debts and no invoices).

85. [1085]

    Reference is made to the minutes of the meeting of creditors of RCG CBD of 9 July 2013 in which it is noted that Gino Cassaniti and Banq had appointed Fred Khalil their proxy and that he attended the meeting by telephone (Ex K at 72987). Again, the minutes detail that there was some discussion about the commencement and cessation of the trading dates; and that, in response to discussion about the status of the books and records of the company, Fred Khalil said that he would deliver all of the books and records of the company in his possession to the liquidator in short order. The plaintiffs emphasise that Fred Khalil was acting at the meeting on Gino Cassaniti’s proxy.

86. [1086]

    The plaintiffs say that further evidence of Gino Cassaniti’s “connivance” in RCG CBD’s liquidation is to be found in the liquidator’s affidavit sworn 7 June 2018. The liquidator deposed to the effect that: (at [9]) RCG CBD lodged its BAS on 29 May 2013; (at [11]-[13]) in response to his request of Gino Cassaniti on 4 July 2013 and Banq on 8 August 2013 for financial records, the liquidator was provided with MYOB reports, employee PAYG summaries for financial year ending 30 June 2013 and a Form 507 Report as to affairs of RCG CBD signed by Gino Cassaniti on 27 June 2013 (Ex K at 73183); (at [14]-[15]) RCG CBD failed to keep financial records that correctly recorded and explained the company’s transactions, financial position and performance which would have enabled true and fair financial statements to have been prepared and audited; and that RCG CBD did not keep all of the financial records that he would have expected for a company with sales disclosed in it BAS of $3,922,660 or credits as disclosed in its bank statements of $8,511,593. (Again, it is noted that Gino Cassaniti’s Counsel did not challenge the liquidator in respect of this evidence.)

87. [1087]

    It is said that, from the above evidence, it is to be concluded that Gino Cassaniti was aware of the request for information and orchestrated the timing of the change of directorship and the filing of RCG CBD’s BAS shortly prior to instigating the creditor’s voluntary winding up.

88. [1088]

    It is said that the absence of information provided to RCG CBD’s liquidator did not occur by chance and that the similarity of the circumstances in the liquidations of Earth Civil, RCG CBD, Bluemine and Involved Recruitment in relation to the absence of documents, when Gino Cassaniti was the director who instigated the liquidation, makes it clear that these otherwise unrelated and separate events were not an innocent coincidence.

89. [1089]

    As to Diamondwish and Rackforce, the plaintiffs say that the only distinguishing feature of the liquidations of Diamondwish and Rackforce from those of the other Insolvent Companies is that Gino Cassaniti instigated those liquidations even though he was not a director of those companies (the plaintiffs submitting that this is a real measure of his influence). Reference is made to Frank Criniti’s evidence (at T 535.5-17) to the effect that he left the winding up and liquidation of Diamondwish and Rackforce to Banq. The plaintiffs submit that, from the nature and extent of Frank Criniti’s relationship with Gino Cassaniti, as a principal of Banq, it is unimaginable that Gino Cassaniti was not directly involved in the creditors’ winding up of each of Diamondwish and Rackforce. It is submitted that it is clear that Gino Cassaniti was involved in the liquidation of Diamondwish and Rackforce due to the factors in relation to the creditors’ voluntary winding up of each (and the coincidence of the modus operandi with the creditors’ voluntary winding up of the other Insolvent Companies).

90. [1090]

    The plaintiffs say that Gino Cassaniti’s assertions (in his affidavit sworn 11 April 2019 in relation to each of Earth Civil, Bluemine and RCG CBD) denying that: he consented to be a director; he in any way managed the company’s affairs; he resolved to place the company in liquidation; he was not owed any money by the company; he signed a proof of debt or appointed Fred Khalil his proxy for creditors’ meetings; he prepared a report as to the affairs of the company, are untruthful. Emphasis is placed in this regard on the email chain of 28 June 2013 (see above at [408]) as to Gino Cassaniti’s signature for the documents to commence the winding up of Earth Civil.

91. [1091]

    The plaintiffs submit that it can confidently be inferred that Gino Cassaniti conspired with the other Primary Conspirators to recommend the Scheme to the Scheme Participants as it related to each of Earth Civil, Bluemine and RCG CBD, with the intention that the relevant company ultimately be wound up without the ability to meet its liabilities. It is submitted that, the happening of these otherwise unrelated events was not an innocent coincidence having regard to the above matters and the unchallenged evidence about the impugned transactions (as to their volume by number and amount; time frame; and lack of genuine supporting documentation).

92. [1092]

    As to Diamondwish and Rackforce, the plaintiffs say that primary responsibility for the payments in breach of fiduciary duty in relation to these two Insolvent Companies rests with Frank Criniti (noting that he confirmed that he had “visual” over those companies’ accounts, and that Vanessa Scuteri (in payroll) and Tarun Shah (in accounts) logged into internet banking using Frank Criniti’s login details, which he provided to them – see at T 509.10-26). The plaintiffs point to Frank Criniti’s acceptance (at T 509.31-38) that he had ultimate control over who could log into the bank accounts of those companies; and his acceptance that Diamondwish and Rackforce provided nothing in return for money received and received nothing for money paid; and that this was not honest conduct (T 536.10-48).

93. [1093]

    The plaintiffs say that Gino Cassaniti’s accessorial liability for assisting Frank Criniti in those breaches of fiduciary duty arises from his assistance and knowledge that Frank Criniti’s actions were dishonest and wrong. As to Gino’s knowledge of that dishonesty, reference is made to the matters referred to above in relation to: his involvement in recommending and implementing the Scheme; his direct involvement in payments in and out of the companies; the benefits obtained by the Criniti companies; Gino Cassaniti’s direct and indirect receipt of benefits from the Scheme; and Gino Cassaniti’s involvement in winding up the companies.

94. [1094]

    It is noted that the evidence from Frank Criniti is that he effected or authorised the impugned transactions on Gino Cassaniti’s advice. The plaintiffs say that that evidence was not diminished in any way in cross-examination by Gino Cassaniti’s Counsel, pointing to Frank Criniti’s evidence that he had acted on Gino Cassaniti’s advice (see at T 556.31-36; T 562.18-33; T 564.25-42). It is submitted that if, as he admitted (at T 536.10-48), Frank Criniti knew that the impugned payments were dishonest, then it is inconceivable that Gino Cassaniti, on whose advice Frank Criniti relied, did not also know those actions were dishonest. (Pausing there, I have some difficulty with this aspect of the reasoning – it does not seem to me that a belief by Frank Criniti as to the dishonesty of particular transactions necessarily leads to a conclusion that Gino Cassaniti, even assuming for present purposes in favour of the plaintiffs that he recommended and assisted in the implementation of them, knew or understood the transactions to be dishonest. More relevant, in this regard, seems to me to be that an accountant in the position of Gino Cassaniti must have been aware that the impugned transactions would likely result in tax liabilities that the companies would be unable to meet and, hence, should have appreciated the dishonesty of the Scheme.)

95. [1095]

    The plaintiffs contend that, in the absence of any evidence in support of the bare denials by Gino Cassaniti in his defence, there should be a finding that Gino Cassaniti knew that the alleged breaches of fiduciary duty were dishonest. (The plaintiffs also say that Frank Criniti’s conduct was in furtherance of the alleged conspiracy.)

96. [1096]

    The plaintiffs emphasise the inherent unlikelihood of an innocent explanation for the similarity of the evidence regarding Gino Cassaniti’s involvement with the Insolvent Companies and the Scheme Participants considered as a whole.

97. [1097]

    As noted above, the plaintiffs contend that an important feature of the Scheme was that the Insolvent Companies only existed or traded for a short period of time; and they point also to the fact that a common feature was that new directors were appointed just prior to liquidation (and that, in relation to Earth Civil, Bluemine and RCG CBD, the Form 484s recording the changes in directorship were backdated). It is noted that Gino Cassaniti was recorded as a director of Earth Civil, Bluemine and RCG CBD pursuant to those Form 484s. Further, it is said that Gino Cassaniti’s signature as a director on the resolutions appointing Mitchell Ball as the liquidator of Earth Civil, Bluemine and RCG CBD constitutes admissions by Gino Cassaniti that he was a director of those companies.

98. [1098]

    The plaintiffs say that, on Gino Cassaniti’s own evidence, Gino Cassaniti’s role at Banq was to provide advice to clients about their corporate structure. It is said that it is apparent from the evidence of Frank Criniti, Elias Nassar, Mario Sande, Andre Abou-Antoun and Tanya Borg, that their relationship with Banq invariably involved advice on restructuring their companies (in addition to issuing false invoices) and that, almost without exception, Gino Cassaniti’s involvement with most Scheme Participants commenced with the liquidation of an insolvent company.

99. [1099]

    Aris Zafiriou’s affidavit sworn 9 March 2017 at [11] annexes a table of 123 companies which were associated with Banq that were placed into a creditors’ voluntary liquidation (see Ex K at 31414-31416). Those where Gino Cassaniti’s relationship with clients through Banq commenced with a company being wound up are identified as: within the Criniti companies, Zagoonda (formerly Criniti’s Pty Ltd) – liquidated on 1 May 2010; within the AKA Group, Tip and Fill Pty Ltd (Tip and Fill) – liquidated on 28 September 2010, ACN 121913488 Pty Ltd (formerly AKA Civil Contracting Pty Ltd) – liquidated on 29 September 2010 and Jian Holdings – liquidated on 26 October 2012 (the assets of Jian Holdings being transferred to Bluemine); within the Borg Group, Excavation – liquidated on 27 February 2013 (its assets being transferred to Borg Family); and in relation to the Wenman Parties, Blackrock Media Worx Pty Ltd (Blackrock Media Worx) – liquidated on 26 September 2011. It is noted that each of those companies at the time of winding up had its registered office at Banq.

100. [1100]

     The common features of the creditor’s voluntary liquidations for companies other than the Insolvent Companies are identified as being that: Banq were the companies’ accountant and tax agent; Banq took and lodged Form 484s appointing “jump on” directors; directors were appointed shortly before the creditors’ voluntary winding up were often directors of otherwise unrelated companies whose only common link was Banq. The “jump on” directors are identified at Annexure B to Aris Zafiriou’s affidavit sworn 21 March 2017.

101. [1101]

     The plaintiffs say that this modus operandi is entirely consistent and corroborative of Frank Criniti’s evidence to the effect that Gino Cassaniti advised him that the way to extinguish liabilities and protect assets was to appoint a new director for a fee of $5,000 and then wind the company up. It is said that the similarity of this modus operandi and the way that Gino Cassaniti liquidated the Insolvent Companies is too striking to be innocent and enables the inference more readily to be drawn that Gino Cassaniti used liquidation as a tool in providing corporate structuring advice for his own ends and in recommending and implementing the Scheme.

102. [1102]

     As to the proofs of debt of the Insolvent Companies (Tables D.1 and D.5), the plaintiffs say that in each case the common factors are that: all of the putative debts are for unpaid invoices or outstanding loans; in the preponderance of those proofs of debt Gino Cassaniti is recorded as either the claimant or a director of each of the claimants; and all of the proofs of debt were rejected by the liquidator for lack of documentation; all of the claims are for “surprisingly” rounded amounts (and it is submitted that it is therefore improbable in the extreme that they were genuine); and all relate to undocumented debts. It is said that the non-existence of the putative invoices is readily inferred from the inherent unlikelihood of separate legal personalities all being unable to provide any documentation at all in support of bona fide claims. Further, it is said that the non-existence or falsity of the invoices is underlined by the fact that Banq’s own claims for unpaid fees were also rejected for lack of documentation.

103. [1103]

     The plaintiffs submit that, for an accounting firm (of which Gino Cassaniti was a principal and in which his wife, Ivana Cassaniti, had a 60% interest through Givana) not to have records of the amounts invoiced for unpaid fees is not credible. It is said that if there was a proper basis for making the claim in the first place, it is inconceivable that Banq would have lost those records between the time of making the claim and when called upon by the liquidator to verify the claim. That being so, it is submitted that it can confidently be inferred that there never were any records or that unpaid accounting fees were unsupported by genuine documentation; and that the lodgement of the claim was a dishonest misrepresentation. It is said that this provides further evidence from which to infer the falsity of all invoices for the impugned transactions as alleged by the Insolvent Companies.

104. [1104]

     The plaintiffs emphasise that in the minutes of each of the meetings of creditors for the Insolvent Companies it was noted that Gino Cassaniti and Banq had appointed Fred Khalil their proxy and that Fred Khalil attended the meeting by telephone; and the minutes further recorded that after some discussion about the status of the books and records of the company, Fred Khalil undertook to deliver books and records of the company in his possession to the liquidator’s office in short order.

105. [1105]

     The plaintiffs say that: first, Fred Khalil’s undertaking to deliver books and records in “his” possession must have been in his capacity as a principal at Banq, because he was not an officer or shareholder of Earth Civil, Bluemine or RCG CBD and would not otherwise have known whether any books or records existed; second, insofar as Fred Khalil asserts in his affidavit sworn 25 March 2019 that Gino Cassaniti asked him to meet the liquidator and assist in completing the liquidation forms and Gino Cassaniti denied this in his affidavit sworn 28 June 2019 at [20], it is relevant that Gino did not require Fred Khalil for cross-examination; third, as there had at each creditors’ meeting been “some discussion” about the status of the books and records of the company in the meeting at which a representative of the ATO was present, it is clear that Fred Khalil knew more about the affairs of Earth Civil, Bluemine and RCG CBD than a mere proxy holder for the proofs of debt, otherwise he would not have provided such an undertaking. Fourth, it is said that Fred Khalil either shirked his undertaking and did nothing at all, or he must have spoken with Gino Cassaniti (who, being a director of Earth Civil, Bluemine and RCG CBD and a principal of Banq at the same time, would be the person reasonably anticipated to know where Banq were keeping such records, or who at Banq was in charge of such records). It is submitted that it is clear that Gino Cassaniti knew what Fred Khalil was doing; and to that extent (at the very least) Gino Cassaniti was further implicated in controlling and using Earth Civil’s, Bluemine’s and RCG CBD’s liquidations for his own ends.

106. [1106]

     The plaintiffs also say that further evidence of Gino Cassaniti’s “connivance” in these liquidations is to be found in the liquidator’s evidence as to the deficiency of the books and records provided in each of the Insolvent Companies’ creditors’ voluntary liquidations. It is noted that Gino Cassaniti’s Counsel did not challenge the liquidator in respect of his evidence of the failure to provide books and records in relation to Earth Civil, RCG CBD and Bluemine. It is said that the absence of information provided to Earth Civil’s liquidator is beyond innocent coincidence; and that the similarity of the circumstances in the liquidations of Earth Civil, Bluemine and RCG CBD in relation to the absence of documents, when Gino Cassaniti was the director who instigated the liquidation, makes it clear that these otherwise unrelated and separate events were not innocent coincidences.

107. [1107]

     The plaintiffs also in this context emphasise the 28 June 2013 email chain (see above) in relation to the signing of the appointment documents for the Earth Civil liquidation.

108. [1108]

     Again, it is said that the similarity in the modus operandi and involvement of Gino Cassaniti and entities associated with him in the absence of books and records for the plaintiff companies is too striking to be an innocent coincidence, and that it should be inferred that Gino Cassaniti had direct involvement in the liquidations of the Insolvent Companies.

109. [1109]

     The plaintiffs say that Gino Cassaniti’s assertions in his affidavit sworn 11 April 2019, in relation to his directorship or management of Earth Civil, RCG CBD and Bluemine are untruthful. Further, it is said that Gino Cassaniti, through his Counsel, was prepared to assert to witnesses that they were giving false testimony or lying, when he himself did not come before the Court and give positive evidence and be cross-examined about those matters.

110. [1110]

     The plaintiffs say that Gino Cassaniti’s knowledge and intention of the tax benefits to be gained by participating in the Scheme is evident from the following four aspects of his orchestration of the Scheme.

111. [1111]

     First, the documentary and oral evidence as to Gino Cassaniti recommending the Scheme to Scheme Participants.

112. [1112]

     Although the affidavits of Gino Cassaniti in these Proceedings are subject to a s 136 order that they be read as assertion, the plaintiffs submit that those assertions are instructive when compared to the evidence of other Primary Conspirators and Scheme Participants on the same subject. It is noted that the tenor of Gino Cassaniti’s affidavit sworn 11 April 2019 was that he simply introduced clients to Banq (at [4]; [40]); and had nothing to do with the Scheme as set out in Aris Zafiriou’s affidavit sworn 9 March 2017; that he only knew a handful of defendants in the five Proceedings; that he had no connection or relationship with the majority of the defendants; and that he did not know and had not made contact with or engaged in any form with a large majority of the defendants ([39]).

113. [1113]

     The plaintiffs point out that in Gino Cassaniti’s affidavit sworn 28 June 2019 he deposes to the effect that, with the forerunner to Banq (Banq Accountants), he introduced clients and “intervened” in matters when specialist advice was required as to business structures and tax ([7(b)(iii)]); that, if specialist advice as to structure and tax matters were required, he would obtain advice from barristers and solicitors ([7(c)]); and that he never engaged in work or undertook any transactional work at Banq, nor did he ever administer any transactions (see at [7(d)]). It is noted that, as far as Banq was concerned, Gino Cassaniti deposed that he “simply referred and introduced clients to Banq Accounting” and that he “did give them advice on tax and business structure related matters, but … did not engage in or advise anyone to undertake the transactions relevant to the current proceedings” (at [16(a)]). The plaintiffs say that this asserted limited involvement should not be accepted.

114. [1114]

     It is noted that the only Scheme Participants relevant to these Proceedings that Gino Cassaniti acknowledged even knowing were Statewide Printing (whom he admitted introducing to Banq – see at [30(a)]) and Frank Criniti (with whom he acknowledged having had a relationship – see at [33(b)]); and, other than that, Gino Cassaniti relied on his general disavowal of knowing defendants and disavowal of having assisted anyone to take part in the Scheme (see his affidavit sworn 11 April 2019 at [36]).

115. [1115]

     The plaintiffs point to the evidence from Scheme Participants to the effect that Gino Cassaniti, Fred Khalil or Peter Abboud, gave them advice that the impugned transactions would minimise tax. It is noted that Gino Cassaniti was aware of this proposed evidence but did not deal with it substantively in his own affidavit evidence. (For example, it is noted that Gino Cassaniti had the affidavit evidence of Andre Abou-Antoun and the ATO transcript of Andre Abou-Antoun (Ex O), yet he did not deal with that in his affidavit evidence and chose not to go into oral evidence.)

116. [1116]

     The plaintiffs say that insofar as the Scheme Participants who gave evidence (except for Frank Criniti) claimed that they did not, at the time, realise that the advice and recommendation was illegal, this is not to the point. The plaintiffs maintain that the advice was not lawful. The plaintiffs say that the tax minimisation advice that Gino Cassaniti gave was part of the Scheme Recommendation. It is noted that Gino Cassaniti did not address that evidence at all; that he asserted that he had no relationship of any substance with clients of Banq but did not seek to give any evidence at all of what work he did at Banq and for whom he undertook such work.

117. [1117]

     It is submitted that, if Gino Cassaniti had not been a principal of Banq (as it is said his evidence sought to imply), ordinarily it would be a simple matter for him to adduce evidence from even the non-professional staff at Banq to this effect; and that not only did he not do this but that he gave no explanation of why he did not. It is noted that the only evidence in support of his asserted role at Banq was in the form of anecdotal evidence that Gino Cassaniti’s lack of knowledge of the staff employed at Banq was an office joke (see Gino Cassaniti’s affidavit sworn 28 June 2019 at [25(a)]). The plaintiffs say that against allegations of such a serious nature and in the absence of explanation, more than unsubstantiated assertions of denial would be expected. It is submitted that it is clear that any explanation that Gino Cassaniti could have given would not have assisted his defence.

118. [1118]

     Second, as noted above, that a fundamental feature of the Scheme was that the Insolvent Companies existed or traded only for a short period of time. It is noted that in each case Gino Cassaniti was involved in instigating the Insolvent Companies’ creditors’ voluntary liquidations and the proofs of debt filed with the liquidator. It is said that, without probative evidence explaining the similar short life span of each of the Insolvent Companies and Gino Cassaniti implementing each creditors’ voluntary winding up where the only legitimate creditor was the ATO, it can readily be inferred that Gino Cassaniti was knowingly involved in the tax benefits gained by winding up the Insolvent Companies. It is said that the necessity of the Insolvent Companies “short lived” existence arose from the fact that they paid out all the money that they received without retaining funds to satisfy their BAS, PAYG withholding and income tax liabilities which accrued from the money that they had received and then paid away.

119. [1119]

     Third, that in each case Gino Cassaniti was linked to the payments in and out of the Insolvent Companies. The plaintiffs note that the fact of the payments is not contested and that, before the commencement of the hearing, Gino Cassaniti was on notice of the evidence that would be, and was expected to be, led against him from various Scheme Participants such as Frank Criniti, Andre Abou-Antoun and George Said. It is said that, in those circumstances, it was incumbent on Gino Cassaniti to do more than respond with bare assertions to the effect that he was not involved in the Scheme and that he fell out with Frank Criniti in mid 2014 (see Gino Cassaniti’s affidavit sworn 11 April 2019 at [33]; [38]-[40]).

120. [1120]

     Similarly, the plaintiffs point to the evidence from Peter Abboud to the effect that, if he was involved in making the impugned payments in the RCG CBD, Bluemine and Rackforce matters, those payments were made at the direction of Gino Cassaniti, Fred Khalil or Ivana Cassaniti (see Peter Abboud’s affidavit sworn 22 March 2019 at [55], [65], [78]). The plaintiffs say that it was incumbent on Gino Cassaniti to do more than simply to assert (as he did in his affidavit sworn 28 June 2019, at [24]) that he did not direct Peter Abboud to complete any work and to deny ever directing Peter Abboud to complete any bank transfers; and at [30(d)], that he did not direct any transactions to be made. It is noted that, in relation to Peter Abboud’s allegations at [65] and [78] of his affidavit, Gino Cassaniti said nothing at all.

121. [1121]

     Fourth, that Banq was the tax agent for each of the Insolvent Companies. The plaintiffs point to the evidence from Aris Zafiriou and George Khouri of the ATO regarding: Banq’s tax agency for the Insolvent Companies (and Scheme Participants); Banq having lodged the relevant BAS; the dates on which those BAS were lodged; and the tax debts of the Insolvent Companies (which evidence was not contested). The plaintiffs say that in response to that evidence it was incumbent on Gino Cassaniti to do more than to assert that he did not approve tax returns while he was at Banq (see Gino Cassaniti’s affidavit sworn 28 June 2019 at [14(a)]); to assert that he did not sign documents evidencing his role in the Insolvent Companies’ creditor’s voluntary winding ups (unsubstantiated by his own expert) (see Gino Cassaniti’s affidavit sworn 11 April 2019 at [15]-[23]); and to provide anecdotal evidence as to his de minimis role at Banq (see Gino Cassaniti’s affidavit sworn 28 June 2019 at [25(a)]).

122. [1122]

     The plaintiffs contend that, in the face of uncontested documentary evidence as to the impugned transactions, the BAS and tax returns, and Gino Cassaniti’s role in instigating the creditors’ voluntary liquidations, together with oral evidence from Scheme Participants of his role in the Scheme, the evidentiary onus shifted to Gino Cassaniti to explain why that evidence against him (of those roles) was incorrect, and that he has failed to satisfy it.

123. [1123]

     The plaintiffs note that Gino Cassaniti’s defence comprised denials of fact and the legal consequences (and that his defence during the hearing was conducted on the basis of complete absence of involvement). It is submitted that the denials of fact should be disregarded for the following reasons.

124. [1124]

     The plaintiffs point to the nature and extent of Gino Cassaniti’s defences to the allegations made by each of the Insolvent Companies but, in particular, to his defences in the Earth Civil, Bluemine and RCG CBD Proceedings. It is said that those defences essentially comprise denials addressed to his: investment in Banq; role at Banq; relationship with clients; and recommendation of and involvement in the Scheme. The plaintiffs say that what evidence Gino Cassaniti did provide comprised self-serving unreliable assertions that were unable to be tested in cross-examination.

125. [1125]

     In addition to Gino Cassaniti’s relationship with the Primary Conspirators, relationship with and recommendations to the Scheme Participants, and role in implementing the Scheme, it is submitted that the final element manifesting his knowledge and intent was his central role in winding up the Insolvent Companies.

126. [1126]

     The plaintiffs point to the evidence that, at the time of the liquidations of Earth Civil, RCG CBD and Bluemine, Gino Cassaniti was a director of those companies. It is said that, in relation to each of those insolvencies, key documents instigating the liquidations regarding Earth Civil, RCG CBD and Bluemine bore Gino Cassaniti’s signature. The liquidator’s unchallenged evidence was to the effect that Gino Cassaniti, as director, did not respond to correspondence requiring provision of books and records and, when the liquidator asked for records of the Insolvent Companies, limited or no information was provided. The liquidator’s evidence regarding the absence of documentary evidence relating to the transfer of money as alleged for the Insolvent Companies was that Gino Cassaniti failed to provide: annual financial statements; bank statements from incorporation until the date of appointment (which, as noted, was a relatively short period); documents of prime entry; copies of employment agreements of any nature; superannuation statements for employees; GST reconciliations; monthly management accounts; invoices or receipts; any working papers.

127. [1127]

     The plaintiffs note that the only explanation from Gino Cassaniti regarding the absence of documents and records to verify the nature of those transactions (or transfers of money) is an assertion that he was not a director of the Insolvent Companies and that documents evidencing the contrary were forgeries (i.e., the resolutions in support of the creditors’ voluntary liquidations, proofs of debt, proxies for the proofs of debt and reports as to the affairs of the relevant companies – see Gino Cassaniti’s affidavit sworn 11 April 2019 at [15]-[28]). The plaintiffs say that it is to be inferred that the absence of documents was a very deliberately contrived element of the implementation of the Scheme.

128. [1128]

     The plaintiffs submit that Gino Cassaniti engaged an expert in the hope that at least an arguable position that the signatures were forgeries would arise. It is said that, when that did not eventuate following the joint expert report (Ex T), Gino Cassaniti abandoned any reliance upon his expert witness and he objected to the evidence of his own expert as incorporated in the joint expert report (see at T 1097-1098; Ex T). Thus, the plaintiffs say that there is no evidence in support of Gino Cassaniti’s bare denial of signing the documents. (At T 1097, the submission put by Counsel for Gino Cassaniti seemed to me to be that if Gino Cassaniti’s affidavit was withdrawn then the original report (which was referred to in the joint expert report) would not be in evidence and so this may undermine the basis of the joint expert report.)

129. [1129]

     The plaintiffs say that, other than denying his directorship and association with the Insolvent Companies, no explanation has been offered by Gino Cassaniti for the absence of genuine books and records relating to the imputed transactions provided to the liquidator for each of the Insolvent Companies; and no explanation has been provided in respect of the purported invoices (that are said to be false). It is said that, other than evidence from some Scheme Participants that there was no service provided as set out on the invoice, falsity would also be inferred from the content and format of the invoices from RCG CBD to Banq where the invoice numbers and the invoice dates are inversions of the same numbers (Ex K at 100290-100343).

130. [1130]

     The plaintiffs say that Gino Cassaniti’s defence case did not deal with any of these issues (other than to assert that he was not a principal of Banq, was not a director of the Insolvent Companies, and did not engage in any scheme to defraud the Commonwealth). They say that, insofar as Gino Cassaniti’s defence on the facts is primarily directed at the issue of his directorships (and shareholdings) of the Insolvent Companies, then if that denial falls away there is no contest in the defence as to the remaining factual issues dealing with the facts of Gino Cassaniti’s involvement in the recommendation and implementation of the Scheme (in circumstances where these matters were peculiarly within his knowledge). It is submitted that, in those circumstances, Gino Cassaniti’s generalised assertions (without basis or corroborative evidence) can be given no weight; and that in the absence of explanation for those matters, merely slight evidence of those matters is sufficient to prove them (but the liquidator says the evidence against him is far higher than that).

131. [1131]

     By way of introduction, Gino Cassaniti, in his closing submissions (which were filed last of the defendants’ submissions – and late) adopted much of the submissions made by the various other parties (including as to overarching nature of the alleged conspiracy; the perceived logical difficulties and confusion that are said to arise from the plaintiffs’ case theory; and the complaint as to circularity of the plaintiffs’ case). I address those general complaints and submissions elsewhere. In this section I summarise the particular submissions referable to the equitable/statutory duty claims against Gino Cassaniti.

132. [1132]

     In summary, it is contended by Gino Cassaniti that if the existence of the alleged overarching conspiracy is not established, then the plaintiffs have not proved the necessary elements of liability for breach of fiduciary duty, knowing assistance and/or breaches of the Corporations Act against Gino Cassaniti with respect to each of the Insolvent Companies and with respect to all of the losses claimed; but that, even if the existence of the alleged overarching conspiracy were found to have been proved, the plaintiffs have not established that all of the losses claimed in respect each of the Insolvent Companies were the result of the implementation of the conspiracy rather than the individual acts of the controllers of the companies for unrelated purposes or for legitimate commercial purposes. Insofar as the plaintiffs’ case theory proceeds from inferences sought to be drawn from the absence of explanation for transactions, Gino Cassaniti points to the difference between inferences drawn from circumstantial evidence and inferences sought to be drawn from the absence of evidence from the defendants (which the plaintiffs require to fill the gaps in their cases).

133. [1133]

     Insofar as the plaintiffs have asserted that there was a conspiracy, Gino Cassaniti says that there was no uniformity of purpose that transcended the separate activities that were undertaken with respect to each of the Insolvent Companies; and that, while the alleged Primary Conspirators may have been carrying out various acts in relation to the Insolvent Companies at different times, it is equally consistent to infer that their acts, or at least some of them, were separately inspired by a “simplistic concept as to tax avoidance”, or by “self interested motivations”, resulting in the separate losses claimed in respect of each of the plaintiffs.

134. [1134]

     Reference is made to the observations by Lewison J in Ultraframe (UK) Ltd v Fielding; Northstar Systems Ltd v Fielding [2005] All ER (D) 397 (Jul); [2005] EWHC 1638 (Ch) (Ultraframe) at [790] as to the elements of a successful conspiracy, tested against which it is submitted by Gino Cassaniti that, if there was an overarching conspiracy in the present case, then “it was not a very good, well thought out or successful one”. For Gino Cassaniti, it is said that a conspiracy is not established by the fact that the various participants in the Scheme may all have had the same purpose of avoiding or reducing their individual tax liabilities.

135. [1135]

     Pausing here, (and with no disrespect to the observations made by Lewison J as to what makes a successful conspiracy) to my mind, whether in the present case this was a “very good” or “well thought out” or “successful” conspiracy is not to the point. There are no doubt many incompetent conspirators in this world, as Lewison J goes on to say at [791], “it may be that if a conspiracy fails to meet these criteria that is due to the ineptitude of the conspirators”. The relevant question is whether the alleged conspiracy is established in the present case, not whether it was a particularly clever (or successful) one. That said, as I understand it, this and like submissions by other defendants goes to the submission as to the unlikelihood of there being such a conspiracy in the first place. However, insofar as that depends on an assessment as to the likelihood that the alleged Primary Conspirators would not have well thought through any such scheme, I am not well placed to form an assessment on this – since none of them made himself available for cross-examination. The plaintiffs’ case does not require the conspiracy to have been successful. Indeed, the fact that it was an unsuccessful conspiracy would not make the defendants any the less liable if the causes of action arising out of that conduct are made good.

136. [1136]

     For Gino Cassaniti, it is also said that the alleged conspiracy would yield no tangible financial benefit to him. It is submitted that the potential benefit from the prosperity of Banq is not a realistic motivation for “such a far ranging and all-encompassing” conspiracy. He maintains that this was essentially “a very unimaginative and basic form of tax avoidance”; and says that any of the alleged Primary Conspirators could have acted on this idea and put the necessary arrangements in place without the assistance or involvement of the others. It is said that the fact that, on the plaintiffs’ case, they all acted to do so does not establish a common purpose.

137. [1137]

     Pausing here, it goes almost without saying that the structural advice propounded by various of the accountants at Banq was indeed a form of tax avoidance – in that a number of clients were advised as to the purpose of the structure being for tax minimisation (albeit that emphasis was placed on it being a legitimate means of tax minimisation); and their attention was drawn to the potential for tax savings. However, to my mind the fact that this kind of structuring advice could have been given by many people in isolation of others fails to take into account that the advice in the present case was not simply to the effect that, say, there should be a separation between asset holding companies and operational companies; but, rather, the advice involved the invoicing of sums through entities associated with Banq for services that on any view of things were not provided (and, amongst other things, the proliferation of straw directors and the like). To suggest that this was simply an “unimaginative and basic form of tax avoidance” seriously downplays, to my mind, what was here put in place and implemented by more than one of the accountants at Banq. Further, the suggestion that each of Gino Cassaniti, Fred Khalil and Peter Abboud (each of whom is identified by one or more of the witnesses as having provided the structural and invoicing advice) separately came up with the identical idea (and implemented it separately without reference to the other but using Banq or associated entities in the same or much the same fashion) is inherently implausible. I return to this issue in due course.

138. [1138]

     Gino Cassaniti submits that the evidence does not support the inference that he (or, for that matter, Ivana Cassaniti) was a principal of Banq. Rather, it is said that, by the time of the alleged Scheme, both Gino Cassaniti and Ivana Cassaniti played little role in the management of Banq. Gino Cassaniti says that the self-exculpatory evidence given by Fred Khalil and Peter Abboud in relation to the management and organisational structure of Banq is at odds with the independent evidence, primarily being the books and records of Banq, as well as their own acknowledged roles in Banq. In particular, in terms of the determining the organisational structure of Banq, Gino Cassaniti places considerable weight on the organisational chart prepared by Fred Khalil at the time of the ATO interview (see Ex K at 57079), in which Fred Khalil is placed at the pinnacle of the organisational hierarchy and both Ivana Cassaniti and Gino Cassaniti are absent.

139. [1139]

     As to directorships, Gino Cassaniti says that the plaintiffs have failed to establish that Gino Cassaniti, relevantly and in the manner or to the extent, and for the durations alleged, was a director (whether actual, de facto or shadow) of any of the Insolvent Companies; that he owed (or breached) fiduciary or statutory duties to the Insolvent Companies; or that he was knowingly involved or concerned in the impugned transactions or the breaches of duties owed by others to the Insolvent Companies.

140. [1140]

     Further, it is said that any alleged breaches by Gino Cassaniti, if established, did not cause the Insolvent Companies to sustain any loss with respect to the funds and/or assets paid out by them, the Insolvent Companies not having acquired any beneficial right or entitlement to retain those funds and assets which it is said were held on constructive trust only.

141. [1141]

     Gino Cassaniti maintains that it is necessary for the plaintiffs to prove that the sum total of all of the impugned payments were made by the Scheme Participants upon acceptance of and acting pursuant to the Scheme Recommendations. So, for example, in relation to the Borg transactions, Gino Cassaniti says (among other things) that the transactions were not undertaken in the furtherance of the Scheme Recommendation but for a quite different commercial arrangement whereby the Borg Parties enlisted the benefits of incorporation to shield assets (noting, inter alia, the evidence of Tanya Borg that Gino Cassaniti first met her in 2014 after Borg Family had received a letter from one of the liquidators of Excavation; her denial that there were any arrangements with Gino Cassaniti as claimed by the plaintiffs; and the absence of any evidence to suggest that Tanya Borg or Michael Borg knew of any alleged involvement by Gino Cassaniti in any conspiracy or Scheme as claimed by the plaintiffs). It is said that there is no evidence that Gino Cassaniti was either directly or indirectly involved in making any representations, including the alleged Scheme Recommendation, to Tanya or Michael Borg or that there was any relevant relationship or dealings between Gino Cassaniti and either Tanya Borg or Michael Borg including the provision of any advice on the restructuring of the companies at any relevant time.

142. [1142]

     As to the connection sought to be made between Banq as an alleged Primary Conspirator, and each of Ivana and Gino Cassaniti, it is said that there is no evidence that any of the Primary Conspirators made a Scheme Recommendation to Ivana Cassaniti; nor to establish how Ivana Cassaniti, as a director of Discobell or an indirect shareholder in Banq acquired knowledge of the Scheme Recommendation. It is said that, absent any specificity as to how Gino Cassaniti is said to be a constructive trustee of Bluemine or of any funds received by Bluemine, it is impossible to know how Ivana Cassaniti is alleged to have had knowledge of the facts which are said to give rise to that constructive trust. It is said that there is no suggestion that Discobell or Givana Prestige filed false returns; nor was there any evidence that Ivana Cassaniti allowed Peter Abboud or Fred Khalil to file false returns. Complaint is made that the plaintiffs have not identified the conduct on the part of any Scheme Participant which is said to have provided knowing assistance to Gino Cassaniti in his breach of this statutory duty of care and diligence, or the facts said to constitute the breach of the duty of care, of which it is alleged the Scheme Participants had knowledge.

143. [1143]

     As to the impugned vehicle transactions with respect to Bluemine, Gino Cassaniti says that the evidence establishes that Bluemine was in fact utilised as a labour hire company and as a subcontractor; and that Reliance Cleaning did not make payments to RCG CBD otherwise than in the genuine pursuit of its business.

144. [1144]

     Finally, it is submitted that Gino Cassaniti has been released from liability by reason of the releases granted by the plaintiffs to various other parties and the abandonment of its claim against Andrew Barsa.

145. [1145]

     Turning then in more detail to Gino Cassaniti’s submissions, I note as follows.

146. [1146]

     Gino Cassaniti says that he was not a director or shareholder of Banq, nor was he employed by it; that Ivana Cassaniti was not in any relevant way in control of the activities of Banq; and that he, Gino Cassaniti, had a minimal involvement in the operation of Banq’s business after about 2011 (referring to Ivana Cassaniti’s evidence to that effect).

147. [1147]

     Gino Cassaniti says that it was not established that either he or Ivana Cassaniti was drawing 60% of the profits of Banq’s business or that Ivana Cassaniti was receiving anything more than a wage; and that there is no evidence of benefit to Gino Cassaniti (or Ivana Cassaniti) commensurate with the scale of benefit that logic suggests would be derived from participation in the alleged Scheme.

148. [1148]

     Gino Cassaniti characterises the affidavit evidence of Fred Khalil and Peter Abboud (read as assertion) as self-serving and “conveniently self-exculpatory”. He submits that their affidavit evidence does not sit comfortably with the information provided by them under oath in the course of their ATO interviews. It is submitted that Fred Kahlil had more control than he would admit to in his affidavits (referring to Fred Khalil’s evidence in the ATO interview on 16 January 2016, to the effect that he was the person responsible in relation to Banq and that he was the director, not Ivana Cassaniti, because that was how he wanted it to be and that anything in relation to tax was supervised by Fred Khalil – Ex 18 at 12, 14). Weight is placed on Fred Khalil’s evidence that Gino Cassaniti had a lot of “personal issues” at the time (Ex 18 at 15).

149. [1149]

     As to Peter Abboud’s affidavit evidence, it is said that his attempt to deflect responsibility for his activities at Banq to either or both of Gino Cassaniti and Ivana Cassaniti (or simply to deny recollection of being involved) was patently unreliable as demonstrated by Peter Abboud’s evidence in the course of his ATO interview held on 25 February 2016 (see above).

150. [1150]

     Gino Cassaniti argues that the ATO records of interview of both Fred Khalil and Peter Abboud demonstrate the inherent unreliability of the affidavit evidence relied on by the plaintiffs in their submissions against both Gino Cassaniti and Ivana Cassaniti; and that this applies whether or not the statements in the records of interview are admissible as to the truth of the assertions recorded in them (it is said that the mere fact that the statements were made at an earlier time underscores the risk involved in relying on the later affidavits of Fred Khalil and Peter Abboud, where they seek to implicate Gino Cassaniti and Ivana Cassaniti). Further, it is said that if Peter Abboud’s statements against Gino Cassaniti and Ivana Cassaniti are accepted (leading to the conclusion that he was not part of any overarching conspiracy as alleged), then the plaintiffs’ case based on the overarching conspiracy (which necessarily involves Peter Abboud) must fail as it is the means by which the plaintiffs seek to make Gino Cassaniti liable for all of the transactions, including those carried out or facilitated by Peter Abboud.

151. [1151]

     It is said that there can be no doubt that Fred Khalil regarded himself (and, to a lesser extent, Peter Abboud) as the “real controller” of Banq again (referring to the operational diagram prepared by Fred Khalil in the course of his ATO interview (which shows Fred Khalil at the apex of the “Banq Structure” above Peter Abboud) (Ex K at 57079) and to Fred Khalil’s evidence to the ATO in his un-redacted transcript record of interview as to his role (“I was the manager. I was the person responsible. I was the tax agent. Any really that’ pretty much it. It speaks for itself”) (Ex 18 at 12).

152. [1152]

     Gino Cassaniti places significance on the use of the NAB Banq Business Cash Maximiser account number ending #939 (Banq Maximiser Account). It is said that this account stood in stark contrast to the other two bank accounts opened for the purposes of Banq’s business (those ending #645 and #546), which were known to Ivana Cassaniti and on she was an authorised signatory together with Peter Abboud and Fred Khalil.

153. [1153]

     It is noted that the Banq Maximiser Account was opened on 18 November 2011 (Ex K at 51185). Gino Cassaniti says that although the document provided by NAB referred to Peter Abboud, Ivana Cassaniti and Fred Khalil as the signatories to the account, this was clearly incorrect since the authority card for this account (produced by NAB) contained only the signatures of Peter Abboud and Fred Khalil. It is said that the uncontroverted evidence from Ivana Cassaniti was that she did not sign the authority card at any time and that she had no knowledge of that account. Gino Cassaniti submits that it should be inferred from this that Peter Abboud and Fred Khalil arranged for the opening of the Banq Maximiser Account for purposes associated with their own benefit (and accordingly did not notify Ivana Cassaniti of its existence). Thus, it is said that Banq conducted its business and dealt with funds received by it to a significant extent by Peter Abboud and Fred Khalil operating a bank account of which only they were the signatories and about which Ivana Cassaniti was kept in the dark. It is said that this account is inconsistent with the existence of the over-arching conspiracy in respect of which all payments passing through the account are included in the global losses claimed against Gino Cassaniti.

154. [1154]

     It is said that Gino Cassaniti could not have directed the payment of funds by Bluemine or RCG CBD into a bank account which he did not know existed; and hence, serious doubts must arise as to the plaintiffs’ contention that Gino Cassaniti was a director of or in control of those companies. (Pausing here, that submission depends largely on acceptance of Gino Cassaniti’s assertion as to lack of knowledge of what was going on at Banq – the fact that neither he nor Ivana Cassaniti was not a signatory to the Banq Maximiser Account does not establish a lack of awareness on his part as to the operations of Banq; and he gave no direct evidence of his lack of awareness as opposed to untested assertion.)

155. [1155]

     Gino Cassaniti says that the claims in relation to Diamondwish and Rackforce do not fit into the paradigm model of the overarching conspiracy relied on by the plaintiffs, pointing to the role of Frank Criniti in those entities (including that he was a signatory to those companies’ bank accounts for their corporate life) and to the allegations pleaded against Frank Criniti in that regard, as a defendant in both the Diamondwish and Rackforce Proceedings (see the Diamondwish second further amended statement of claim at [8]; the Rackforce third further amended statement of claim at [11]) and the relief claimed against Frank Criniti in those proceedings before amendment to the pleadings (see at [36] and [11], respectively).

156. [1156]

     Gino Cassaniti says that Frank Criniti was a principal participant and beneficiary in the financial activities of Diamondwish and Rackforce, which could not have occurred but for his willing assistance and cooperation. He says that Frank Criniti was the controlling mind in the relevant period of each of: Diamondwish; Rackforce; Criniti’s Wood Fire Pizza; Auswide; and (from at least 18 January 2012) Givana Prestige; noting that Frank Criniti controlled the bank accounts for those companies during that period.

157. [1157]

     Gino Cassaniti says that, if there was a conspiracy and the conspiracy extended to the use of Diamondwish and Rackforce, then it is difficult to escape the conclusion that Frank Criniti was also a Primary Conspirator. He points out that the conspiracy relied on by the plaintiffs is one conspiracy that necessarily involved not only Diamondwish and Rackforce but also, on the plaintiffs’ case, Earth Civil, Bluemine and RCG CBD; and that it involved the complicity of all the alleged Primary Conspirators. Gino Cassaniti says that the evidence relied on by the plaintiffs fails to prove (either positively or inferentially) that the object of the alleged Scheme extended to all or any of the financial affairs and dealings of Diamondwish and Rackforce. Rather, it is said that Frank Criniti’s evidence was focused almost entirely on alleging that Gino Cassaniti was the mastermind of the Scheme established for his companies, noting that Frank Criniti also alleged that it was Gino Cassaniti who gave instructions for payments made out of both Diamondwish and Rackforce.

158. [1158]

     As adverted to above, Gino Cassaniti says that the general structuring advice that Frank Criniti said he was given Gino Cassaniti (see at T 466.50-467.6; T 499.5-18), to the effect the group be structured with an asset holding entity, a trading entity, and an employer entity, is unremarkable. It is said that quarantining the employment function from, first, the asset entity and, second, the operating entity is an ordinary commercial arrangement (by which issues and liabilities relating to workers compensation insurance, payroll tax, PAYG and superannuation can be quarantined away from the asset holding company). It is noted that Tarun Shah’s evidence confirmed that his own wages were paid by one of the Insolvent Companies, namely Rackforce.

159. [1159]

     Gino Cassaniti says that Frank Criniti’s approach was to attribute blame to Gino Cassaniti for every manner of occurrence or event, however remote, concerning Rackforce and Diamondwish (including, the appointment of David Rizk as a director, referring to Frank Criniti’s evidence at T 522.50-523.11).

160. [1160]

     As to the appointment of Christopher Cherry as a director of companies associated with Banq, Gino Cassaniti points out that (apart from the evidence that Christopher Cherry and Frank Criniti did not know each other) Christopher Cherry’s evidence (at T 902.18-19) was that he did not know Gino Cassaniti (and it is noted that it was not explored with him in his examination in chief whether there was anybody else from Banq that he might have known or with whom he might have had dealings).

161. [1161]

     Gino Cassaniti says that Frank Criniti made abundantly clear his ill will towards him (at T 555.48-556.10), when he said that “I made a stupid choice, to pick stupid people” and “I made a mistake and got manipulated by an idiot”.

162. [1162]

     Gino Cassaniti says that, ultimately, the cause of any loss in Diamondwish and Rackforce (and other Criniti entities) was simply Frank Criniti’s extravagant lifestyle and excessive spending (referring to Frank Criniti’s evidence at T 566.21-567.35); and Frank Criniti not paying his creditors (and in particular the ATO). It is said that Frank Criniti was counselled by Banq (possibly by Peter Abboud) to stop his extravagant spending and to stop taking cash out of the businesses; and that Frank Criniti falsely denied losing his temper at that reprimand and smashing his fist through a wall in response (see at T 574.4-30). (Pausing here, there was no evidence of any such incident; and no basis on which I could possibly form the view that Frank Criniti’s denial of the incident, as put to him in cross-examination, was false.)

163. [1163]

     As to the reference in the plaintiffs’ submissions (at [1026]) to a transfer to Elle Barikhan and Frank Criniti’s suggestion that it was a payment he made for Gino Cassaniti, it is said by Gino Cassaniti that the denial by Frank Criniti that Elle Barikhan was Frank Criniti’s long time friend and Frank Criniti’s evidence that Elle Barikhan or his brother was Frank Criniti’s finance broker was “too cute and clearly evasive” (see at T 564.49-565.2). Gino Cassaniti says that it is significant (given what he characterises as Frank Criniti’s predilection to blame “all manner of faults” on Gino Cassaniti) that Frank Criniti did not attempt to say that Elle Barikhan was, in fact, Gino Cassaniti’s finance broker. It is said that Frank Criniti jumped to deny that Elle Barikhan was a “long-term friend” but “has coyly avoided answering the question whether Elle Barikhan had in fact being doing finance for Frank Criniti for years”. Gino Cassaniti says that it is open to infer that Frank Criniti did not want to disclose that, in fact, Elle Barikhan was Frank Criniti’s own broker and that, accordingly, the impugned transfer was explicable as a transfer by Frank Criniti to his own finance broker for Frank Criniti’s own purposes, whatever those purposes might have been. (Again, pausing here, there is simply no evidence as to Mr Barikhan’s involvement in these events; the most that Frank Criniti indicated was that either Elle Barikhan or his brother was a finance broker. I cannot possibly draw the inference here invited to be drawn.)

164. [1164]

     As to the authorisation or directions for transfers to and from accounts of Rackforce and Diamondwish, Gino Cassaniti points out that Frank Criniti gave evidence that his accounting staff (Tarun Shah and others) had access to his online NAB accounts; and that, when cross-examined on certain specific transactions on his Rackforce and Diamondwish accounts, Frank Criniti on occasions had no recall of or denied either making the transactions himself or directing his staff to make the transactions (see, for example, at T 610-611; T 614.48-49). It is said that Frank Criniti sought to attribute responsibility for any transfers in or out of the accounts of Rackforce, Diamondwish and Givana Prestige to directions from Gino Cassaniti to Tarun Shah (referring to his evidence at T 608.32-48)

165. [1165]

     Gino Cassaniti says that Frank Criniti’s self-serving evidence that Frank Criniti never exercised control over or gave directions concerning transactions involving the bank accounts of Rackforce, Diamondwish and Givana Prestige, and that everything was done on instructions from Gino Cassaniti should not be accepted (see T 615.8-29). It is submitted that it is inherently difficult to accept Frank Criniti’s evidence, in light of Frank Criniti’s acceptance that he led an extravagant lifestyle purchasing houses and fast cars and that he was assessable by the ATO on undeclared moneys from his restaurant business in the amounts of $7 million in 2011, $12 million in 2012 and $4 million in 2013 (see T 601.40-46 and T 602.7-16).

166. [1166]

     Gino Cassaniti says that, more fundamentally, Frank Criniti’s evidence is directly contradicted by that of Tarun Shah, whose evidence is said to be disinterested and objective. It is noted that Tarun Shah was head of Frank Criniti’s accounting department, with two assistants and responsible for the accounts of 17 or 18 companies in the Criniti companies (see T 935.34); and that Tarun Shah said that he did take directions from Frank Criniti concerning, for example, the authorisation of payments (see at T 933.23-37). Gino Cassaniti contends that clearly a direction (even if not exactly the same words) was given by Frank Criniti concerning the transfer of available funds from Criniti’s Wood Fire Pizza to Rackforce; and that Frank Criniti simply cannot admit that any such direction was given because to do so would contradict his evidence that any transactions were attributable to directions from Gino Cassaniti.

167. [1167]

     Pausing here, I did not understand Tarun Shah’s evidence to amount to any kind of acknowledgement that Frank Criniti gave him a direction that whenever there were available funds in Criniti’s Wood Fire Pizza they should be transferred to Rackforce (nor was that put to him in terms) albeit that that Tarun Shah did give evidence that he received directions or instructions from time to time from Frank Criniti in relation to the transfer of moneys.

168. [1168]

     In cross-examination by Counsel for Gino Cassaniti, Tarun Shah said that within the Criniti’s group he reported to Frank Criniti; that in terms of “operations, the accounting entries, that kind of area”, Frank Criniti did not give him directions but that he would give directions “[l]ike normally the authorisation of payments was the time when me and him have a meeting, then we go through payments” (see at T 933). I read that as stating no more than that Frank Criniti had a role in approving or authorising payments (but was not involved in how payments or transactions were to be accounted for). In cross-examination by Peter Abboud’s solicitor, Tarun Shah said that Frank Criniti gave instructions in relation to the transfer of funds from one Criniti company to another Criniti company; and that he (Tarun Shah) had access to the bank accounts to transfer those funds and followed those instructions (at T 936). Tarun Shah said that he recalled being given instructions by Frank Criniti to transfer funds from a Criniti company to Rackforce; and as to the purpose of such a transfer he said that “[l]ook I knew that there were wages paid out of Rackforce so that would have been a wage payment” (T 936.20-27).

169. [1169]

     None of that goes so far in my opinion as to support the submission for Gino Cassaniti that there was some form of standing instruction in relation to the transfer of funds given by Frank Criniti; nor is it inconsistent with Gino Cassaniti being the one who had given instructions in general to Frank Criniti as to how payments were to be transferred between the companies. Furthermore, the suggestion that Frank Criniti led an extravagant lifestyle and understated his personal income in his tax returns does not lead to the conclusion that Frank Criniti (a concreter turned restaurateur) had the accounting knowledge or ability to implement on his own accord a tax minimisation (or avoidance) scheme of the kind here involved.

170. [1170]

     Gino Cassaniti says that Earth Civil also does not fit into the mold of the Scheme alleged by the plaintiffs. It is noted that Andre Abou-Antoun’s affidavit sworn 5 July 2019 (at [7]-[8]) makes clear that his introduction to Banq was not through Gino Cassaniti but was through either or both of George Khalil and Peter Abboud, who introduced Gino Cassaniti to him. It is said that it is also clear from Andre Abou-Antoun’s affidavit that the initial meeting at his family office in or about early 2010 was only in relation to a dispute concerning Yellow Pages. Gino Cassaniti says that the evidence is that any initial advice concerning the restructuring of the company group came from either Fred Khalil or Peter Abboud, and the incorporation of AKA Civil in June 2010 appears to have occurred after that “Yelllow Pages” advice.

171. [1171]

     It is said for Gino Cassaniti that the decision to move the AKA Parties’ accounting business to Banq was for legitimate purposes and that there is nothing in Andre Abou-Antoun’s evidence to suggest that Gino Cassaniti’s early involvement was for any purpose other than to network and attract a new client for Banq. It is said by Gino Cassaniti to be significant that, after those initial meetings, it is Andre Abou-Antoun’s evidence (see his affidavit sworn 5 July 2019 at [17]) that, he almost never dealt with Gino Cassaniti directly again (his dealings thereafter being with Peter Abboud and Fred Khalil).

172. [1172]

     Gino Cassaniti says that there is no evidence of any direct involvement by him in providing advice as to the corporate structure of the AKA Group; rather, such advice came from Peter Abboud and Fred Khalil (referring to Andre Abou-Antoun’s evidence); and that the restructuring advice provided by Peter Abboud was specific and involved the incorporation of a separate invoicing company and a separate company to employ personnel and resulted in the incorporation of AKA NSW and Earth Civil (which was the employer company). Further, Gino Cassaniti says that there is no evidence that the various companies in the AKA group were not formed for legitimate purposes, noting that, throughout the period until September 2012, both Andre Abou-Antoun and Michael Abou-Antoun exercised control of the companies, which were carrying out legitimate trading activities and which generated substantial revenue.

173. [1173]

     Gino Cassaniti says that the advice in question came from Fred Khalil (after receipt of the first payment from the Sekisui House job in or about September 2012) (referring to Andre Abou-Antoun’s evidence that Michael had “had a talk with Fred. He’s got an idea to save us tax” – see above) and that thereafter whatever directions were being provided by Banq as to payments involving the companies came from Peter Abboud and Fred Khalil (again referring to Andre Abou-Antoun’s evidence).

174. [1174]

     It is said that the impugned Earth Civil transactions (in and after September 2012) by either or both of Andre Abou-Antoun and Michael Abou-Antoun, who had actual control of its operations; and that Andre Abou-Antoun was clear in his cross-examination by the plaintiffs’ Senior Counsel that it was either Fred Khalil or Peter Abboud from Banq who told him to make the transfers. Similarly, Gino Cassaniti says that Andre Abou-Antoun’s evidence makes it clear that the instructions to make payments from AKA Civil or AKA NSW to Bluemine also came from Fred Khalil and Peter Abboud, as did all recommendations made as to the tax benefits of those payments. Gino Cassaniti says that there is no evidence of any direct involvement by him in, or knowledge by him of, these transactions and no evidence as to any involvement by him, referring to Andre Abou-Antoun’s evidence that, over the course of seven or eight years, preparation of the BAS returns started with Peter Abboud and then, between 2013 and 2015, it was more Devangh Shah who was involved.

175. [1175]

     Gino Cassaniti also says that any evidence as to advice that may have come from Gino Cassaniti was hearsay (based on something that Michael Abou-Antoun may have said); noting that Michael Abou-Antoun did not give evidence and that, in cross-examination by Senior Counsel for the plaintiffs, Andre Abou-Antoun gave evidence that it was not Gino Cassaniti who had instructed him to transfer money between the AKA entities and Earth Civil.

176. [1176]

     Insofar as the plaintiffs submit that Andre Abou-Antoun was seeking to resile from the answer he had previously given to the ATO on the issue as to who advised the AKA Parties to make the payments to Earth Civil (and that the answer he gave the ATO should be accepted as the truth), Gino Cassaniti says that this involves a selective adoption and/or rejection of earlier inconsistent statements made by witnesses or parties to suit the plaintiffs’ narrative (in the absence of any direct evidence linking Gino Cassaniti to any of the transactions involving the AKA entities and Earth Civil or to any advice given in relation to those transactions).

177. [1177]

     Gino Cassaniti submits that in the ATO interview Andre Abou-Antoun made clear that his reference to “us” was a reference to advice he believed had been furnished to Michael Abou-Antoun, referring to the following exchange (Ex O at 195):

178. [1178]

     It is said that this was entirely consistent with Andre Abou-Antoun’s explanation in the witness box (see T 680.9-13):

179. [1179]

     Gino Cassaniti says that if there is any doubt about the absence of any direct dealings between Gino Cassaniti and Andre Abou-Antoun, it is dispelled in the evidence (referred to above) Andre Abou-Antoun gave about the lack of contact with Gino Cassaniti following the initial meeting in relation to the “Yellow Pages” dispute. It is said that no explanation has been provided by the plaintiffs as to what motivation Andre Abou-Antoun had for lying about the matter and why his evidence should be rejected; noting that Andre Abou-Antoun was not a defendant and it is submitted that, had Gino Cassaniti provided the advice, it would not matter from Andre Abou-Antoun’s perspective whether it was given directly to his brother or directly to both of them.

180. [1180]

     Pausing here, the evidence that Andre Abou-Antoun gave as to the meaning he accorded to “us”, i.e., that it meant his brother, was in my opinion not unfairly described by the plaintiffs as long-winded and nonsensical (and to my mind remarkable when set in the context of his professed inability to recognise his own brother’s signature at a later point in his evidence in the witness box). Nevertheless, I consider that the answer “[w]ell, he didn’t tell me anything” (at least as it reads on paper) has the ring of truth and that it is not implausible in a scenario where Andre Abou-Antoun said that he did not really deal with Gino Cassaniti. The answer that he took money out as per Gino Cassaniti’s instructions would not be inconsistent if this were understood to be a reference to Andre Abou-Antoun’s understanding of those instructions albeit as conveyed to him by Michael Abou-Antoun. That said, what seems to me to be abundantly clear (not least from my observations of Andre Abou-Antoun in the witness box) is that he would not have been the one making decisions as to what money was to be transferred between the companies – and that he had no real understanding of the need for the round robin of payments to be made.

181. [1181]

     Gino Cassaniti submits that it is clear from the evidence that Earth Civil was incorporated by Michael Abou-Antoun for a legitimate commercial purpose, namely, to provide labour hire services to other companies within the group. He says that in the course of conducting Earth Civil’s business, a number of large transactions were effected by it, referring to the documentary evidence that Earth Civil had two accounts (the first, being account number ending #512 and the second being account number ending #420). It is noted that Michael Abou-Antoun was the authorised signatory of both accounts but that it appears that the accounts were accessed by both him and Andre Abou-Antoun. The transactions effected by Earth Civil included a significant number of cash withdrawals.

182. [1182]

     Gino Cassaniti says that it is apparent that the withdrawals were made by either Andre Abou-Antoun or Michael Abou-Antoun (or both). Reference is made by way of example to a withdrawal slip that records Andre Abou-Antoun as receiving the funds (Ex K at 10565); and cash withdrawal slips containing Andre Abou-Antoun’s signature (Ex K at 10561-10562); as well as a withdrawal slip recording Michael Abou-Antoun as receiving the funds (Ex K at 10568). It is said that where the withdrawal slip does not record the recipient it obviously would have been either of the two. The cash withdrawals occurred from 28 September 2012 to 28 May 2013. It is said that these cash transactions were all conducted by Michael Abou-Antoun as account holder or on his behalf by Andre Abou-Antoun, both of whom were the actual controllers and true directors; and that the transactions are not consistent with the alleged Scheme.

183. [1183]

     Gino Cassaniti says that the direct withdrawal of these cash funds was for purposes that were not properly explained by Andre Abou-Antoun. Pointing to the fact that there were no invoices purporting to be in respect of the provision of services by a third-party entity (as Gino Cassaniti says might be expected if there were payments out made by Earth Civil in accordance with the alleged overarching conspiracy), Gino Cassaniti submits that the clear inference is that the withdrawal of the funds was for their own personal purposes unrelated to any such conspiracy. In any event, Gino Cassaniti says that there is no evidence that he approved, let alone knew, of those withdrawals or the purpose to which they were being put.

184. [1184]

     It is noted that on 28 May 2013, being the day that the last cash withdrawal was made, Gino Cassaniti was appointed as the director; and that the ASIC Form 484, lodged 28 May 2013, amended the ASIC register and appointed Gino Cassaniti as a “backdated director”, recording his “backdated appointment date” (and the transfer of all shares of Earth Civil to Gino Cassaniti) as being 1 July 2012. Gino Cassaniti says that there is no evidence that he consented to or accepted the position of director for Earth Civil. It is said that the ASIC Form 484 is not signed and was capable of being lodged by anyone with access to the portal and the relevant details of Earth Civil; and that there is no evidence that he was the director of Earth Civil from the backdated appointment date of 1 July 2012.

185. [1185]

     Gino Cassaniti says that, at its highest, the nomination of him as a director in the ASIC Form 484 is consistent with his being utilised as a “jump on” director of Earth Civil, prior to its being placed in liquidation (placing significance in this context on the fact that the Form 484 was lodged on the same day the bank account was closed (on 28 May 2013) – Ex K at 10554-10555). Reference is here made to the liquidator’s acceptance of the proposition that the rationale for “jump-on” directors is that it is a device or mechanism to create protection for the “real” directors of the company, often achieved by backdating of the form lodged with ASIC (though I interpose to note that the liquidator’s acceptance was more nuanced that “it could be perceived that way”).

186. [1186]

     Gino Cassaniti points out that this was not a device the use of which was confined to Banq, it being the liquidator’s experience that “it seems to happen a lot”; and that the liquidator also accepted from his experience that the date of lodgement was more likely the true date the “jump on” director became director rather than the backdated appointment date.

187. [1187]

     It is said that the evidence given by the liquidator in relation to Gino Cassaniti’s appointment as a director of Bluemine (namely that it appeared to be the case that he was a “jump on” director) is equally apposite to Gino Cassaniti’s appointment with respect to Earth Civil.

188. [1188]

     Thus, it is submitted that: Gino Cassaniti’s only direct involvement with Andre Abou-Antoun and Michael Abou-Antoun was well before the incorporation of Earth Civil and was in the context of the Yellow Pages dispute and sorting out an outstanding payroll tax liability; Gino Cassaniti may have played a role in attracting them as clients of Banq but that, apart from the initial contact, all dealings between the Abou-Antoun group of companies and Banq were with either or both Peter Abboud and Fred Khalil; Gino Cassaniti did not provide any restructuring advice to Andre Abou-Antoun or Michael Abou-Antoun, nor does the evidence established that he provided any transactional advice to either of them; there is no evidence that Gino Cassaniti was in any way involved in formulating or approving the restructuring and transactional advice provided by either or both Peter Abboud and Fred Khalil; both Andre Abou-Antoun and Michael Abou-Antoun retained full control over the activities and transactions of the companies; both Andre Abou-Antoun and Michael Abou-Antoun retained full control over the bank accounts of the companies, particularly Earth Civil; there is no evidence that Gino Cassaniti exercised any functions as a director, whether de facto or shadow, of Earth Civil prior to it being placed into liquidation on 28 June 2013; there is no evidence that Gino Cassaniti either directly or indirectly in any way controlled or influenced Andre Abou-Antoun and/or Michael Abou-Antoun; Andre Abou-Antoun and Michael Abou-Antoun utilised the bank accounts of Earth Civil to withdraw cash for their own purposes and not for purposes which bear any relationship to the methodology of the alleged Scheme (i.e., payment out to another party upon receipt of a purported invoice); there is no evidence that Gino Cassaniti advised, instructed, directed or knew of the cash withdrawals or the purpose to which they were to be put; and, in the circumstances, the backdating of the ASIC Form 484 does not provide any evidence or evidence to which any weight should be given as to the date when Gino Cassaniti did in fact commence to exercise the functions of a director.

189. [1189]

     It is submitted that the overwhelming evidence is that both Andre Abou-Antoun and Michael Abou-Antoun were, at all relevant times until shortly prior to its liquidation, in firm control of Earth Civil and its financial dealings and transactions; and that all breaches of fiduciary duties owed to Earth Civil were their own. It is thus submitted that the evidence is strongly against Gino Cassaniti having exercised any control or influence over the directors or having acted as a de facto or shadow director; or having provided transactional or restructuring advice to them; or owing any fiduciary duties to Earth Civil or even being in a position where such duties could have arisen.

190. [1190]

     As to the claim in relation to Bluemine, Gino Cassaniti denies that he was a director (or shadow or de facto director) of Bluemine at any time. Insofar as the plaintiffs base their submission on an appointment date of 1 April 2013, in accordance with the Form 484 lodged with ASIC, Gino Cassaniti accepts that the ASIC documents prima facie record him as a director of Bluemine during the period 1 April 2013 to 18 March 2014. However, it is said that this is unlikely to present an accurate representation of Gino Cassaniti’s role, as the evidence indicates the likelihood of Gino Cassaniti having been appointed as a “jump on” director (pointing again to the acceptance by the liquidator of the general propositions put to him as to the practice of appointing “jump on” directors).

191. [1191]

     Pausing here, as adverted to above, what I understood the liquidator to accept were general propositions, as such, including that: part of the process of establishing a jump on director was that the change of director Form 484 “was usually lodged a lot later than the date of appointment”; the date of lodgement is “more likely to be the true date the jump on director became a director rather than the back-dated appointment date”; jump on directors “do not represent the real person or the real director behind the company”; a jump on director usually does not control the accounts of the companies to which they are appointed, and bank account authorisations generally remain “as is” notwithstanding the appointment of a jump on director; it is a reasonable premise that the director immediately preceding the appointment of the jump on director “is effectively the person who generally exercised control over the company”; the rationale for appointment of a jump on director was an “attempt to add a modicum of protection” for the real director; the appointment of jump on directors was a frequent occurrence; and there were instances where jump on directors were not aware of their appointment (see T 188-189).

192. [1192]

     I accept that the liquidator conceded that, when he became aware of Gino Cassaniti’s appointment as a director of Bluemine, “it appeared to be the case” that this was as a “jump on” director, and that it was possible that it crossed his mind that this was done to “protect” the true director, Andrew Barsa (T 190). However, that does not establish that this was in fact the case (and to my mind the evidence of Andrew Barsa as to his role as director does not lead me to conclude that Andrew Barsa was in any sense the “real” director in this scenario). Moreover, it was open to Gino Cassaniti to make himself available for cross-examination on this and other issues.

193. [1193]

     Gino Cassaniti points to the following matters as relevant in this context: that it is apparent that the backdated change of director Form 484 was processed on 26 July 2013; that on or about 18 June 2012, Andrew Barsa opened bank accounts with the NAB for Bluemine (ending #1718 and #2486); that subsequently further NAB accounts were opened by Andrew Barsa and Peter Abboud (both being signatories) in the period up to and including November 2012 (including account ending #3687); that, after the date of Gino Cassaniti’s apparent appointment as director, Peter Abboud signed various Withdrawal Debit Authorities (on 23 April 2013, for $8,500 on cheque account #3687; on 1 May 2013, for $10,700 on cheque account #3687; on 9 May 2013, for $8,300 on cheque account number #3687); that the authorised signatories to Bluemine’s bank account were not changed after the date of Gino Cassaniti’s apparent appointment as a director; that Bluemine’s BAS returns were lodged by Fred Khalil; and that Bluemine’s accounts were signed by Peter Abboud or Andrew Barsa. Again, Gino Cassaniti notes that the liquidator agreed, in his general experience that “jump on” directors do not represent “the real director behind the company” (see at T 188.45-48).

194. [1194]

     Gino Cassaniti points to the evidence of Andrew Barsa in his ATO interview to the effect that Andrew Barsa was the director of Bluemine up until 26 July 2013 and places weight on the fact that, when asked whether he was aware of any financial problems as at 26 July 2013, Andrew Barsa’s response was not that he ceased to be a director on 1 April 2013 but that “I was off, and then a month later [which Gino Cassaniti says means the month after 26 July 2013] the company went to … [presumably, intending to say, liquidation]”. Gino Cassaniti says that, in his ATO interview, Andrew Barsa was in effect accepting that he was a director on 26 July 2013. (Pausing there, it is by no means apparent that this is what Andrew Barsa was conveying in this passage of the transcript; and in any event it places much weight on the reliability of Andrew Barsa’s memory as to the time of the relevant events.)

195. [1195]

     As to Andrew Barsa’s evidence, Gino Cassaniti says that the plaintiffs, in effect, are here seeking to “approbate and reprobate” – i.e., that, on the one hand, they denigrate his evidence that he was appointed to Bluemine as an asset protection measure for the trucks and trucking business conducted by his cousin, George Abboud, and that he was an experienced business consultant providing consultancy services to other businesses and at all times either the sole or alternatively joint signatory with Peter Abboud on the Bluemine NAB account; whereas, on the other hand, in the plaintiffs’ written submissions (at [419]-[422]) they accept the correctness of Andrew Barsa’s evidence of the conversation with Gino Cassaniti some time in the period from December 2012 to April 2013 concerning Andrew Barsa being replaced as a director of Bluemine (see at T 914.39-45; T 915.21-22). Pausing here, there is no difficulty in accepting a part of a witness’ evidence as credible, having regard to the overall evidence in the case, and other parts as not plausible.

196. [1196]

     Gino Cassaniti says that the evidence relied on by the plaintiffs is directly inconsistent with statements made by Andrew Barsa in his ATO interview on 25 July 2016 (see above) to the effect that he did not even know who Gino Cassaniti was; did not recall why there was a need to change the directorship to Gino Cassaniti; and asked who it was that had replaced him as director.

197. [1197]

     Insofar as the plaintiffs, in their written submissions place significance on the fact that Gino Cassaniti’s Counsel did not challenge Andrew Barsa’s evidence that it was Gino Cassaniti who Andrew Barsa asked if he could resign his directorship of Bluemine, it is said by Gino Cassaniti that the plaintiffs were obliged to explain two pieces of inconsistent evidence that the plaintiffs had themselves adduced, namely, Andrew Barsa’s examination in chief and the ATO transcript of interview (Ex E); and that it was not a matter for the defendants to seek to clarify that inconsistency (as it was plainly known to the plaintiffs’ Counsel).

198. [1198]

     Gino Cassaniti submits that this leads to the conclusion that Andrew Barsa’s evidence is unreliable and that there is no good reason to prefer what he said in the witness box to that which he had said earlier under oath in the ATO record of interview. Further, it is said that it is more likely that what Andrew Barsa had said earlier, being closer in time to the events in question, is the accurate and reliable version. Gino Cassaniti asks, rhetorically, why Andrew Barsa did not implicate Gino Cassaniti in the ATO record of interview if Gino Cassaniti was so clearly involved (and why in those circumstances Andrew Barsa responded in a manner that suggested that the name “Gino Cassaniti” was unknown to him). (The danger in rhetorical questions, as always, is that it inspires speculation as to what other answer there might be – and in this case that might be found in the fact that at least one other witness, George Said, had demonstrated an unwillingness at the ATO interview to name Gino Cassaniti. I do not suggest that this is also the case in relation to Andrew Barsa – that would indeed be no more than impermissible speculation – but it does mean that I cannot draw any particular conclusion from the fact that Andrew Barsa did not name Gino Cassaniti in his ATO interview and that what I am left with is inconsistent evidence from Andrew Barsa in this regard.)

199. [1199]

     Gino Cassaniti’s submission is that Andrew Barsa’s evidence discloses that, contrary to the ASIC Form 484, he did not cease to be a director on 1 April 2013 (pursuant to a conversation with Gino Cassaniti and an agreement that Gino Cassaniti was taking over Bluemine); rather, that Andrew Barsa continued as a director until at least 26 July 2013. In any event, it is noted that, even after that date of 26 July 2013 it was Andrew Barsa who remained as a signatory on the bank account of Bluemine.

200. [1200]

     Gino Cassaniti says that the fact that Andrew Barsa played a substantive role in the affairs of Bluemine is confirmed by the statements made by Peter Abboud under oath in his ATO interview on 25 February 2016. It is said that the evidence given by Peter Abboud as to the trucks purchased and sold by Bluemine illustrates examples of dealings about which Gino Cassaniti could not have known anything and which were of no benefit to him directly or indirectly; noting that there is no mention of Gino Cassaniti or any allegation that he was in any way concerned with those (see as set out earlier).

201. [1201]

     Gino Cassaniti thus says that the plaintiffs’ contention (at [708]) that Andrew Barsa “was Gino’s puppet” is inherently without foundation.

202. [1202]

     As to Gino Cassaniti’s alleged breaches concerning Bluemine, Gino Cassaniti repeats and adopts the submissions made by Ivana Cassaniti and the AKA Parties (see in due course as summarised below).

203. [1203]

     Insofar as the plaintiffs’ case in the RCG CBD Proceeding (at [287(c)]) depends upon the premise that Gino Cassaniti was the sole director and shareholder of RCG CBD from 16 May 2012 to 28 June 2013, Gino Cassaniti points to the ASIC register that records that, at the time of RCG CBD’s incorporation on 16 May 2012, the secretary, sole director and shareholder of the company was George Khalil, and that the appointment of Gino Cassaniti as a director, secretary and shareholder is recorded with a purported appointment date of 16 May 2012 by a Form 484 that was lodged with (and received and processed by) ASIC on 28 May 2013, shortly before the winding up application in respect of RCG CBD was filed with ASIC on 1 July 2013 (Ex K at 30240).

204. [1204]

     Gino Cassaniti says that George Khalil was in fact the director and controlling hand of RGC CBD, placing emphasis on bank account details in documents produced to the ATO in response to a compulsory 353-10 notice from the Commonwealth Bank of Australia (CBA), which record that George Khalil was the sole signatory for the RCG CBD account for the period 21 May 2012 to 17 June 2013 (a period commencing some five days after the ASIC records show that George Khalil ceased to be a director, secretary and shareholder of RCG CBD).

205. [1205]

     Gino Cassaniti also refers to the following matters concerning the position of George Khalil as the director of RCG CBD in the period from 15 May 2012 to 17 June 2013: evidence under oath by Debbie Akkawi in her ATO interview (which does not appear to me actually to have been tendered – see T 68.20-69.48) as to George Khalil’s role (which in the circumstances I cannot take into account as it is not before me); evidence under oath by Fred Khalil in his unredacted ATO interview dated 22 January 2016 that the director of RCG CBD was George Khalil (Ex 18 at 32); and the contract dated 18 November 2012 entered into between RCG CBD and Phoenix Industrial Cleaning (at a time when, on the plaintiffs’ case, Gino Cassaniti is the director of RCG CBD) which bears George Khalil’s signature on the execution page and a notation with George Khalil’s name above the identification of RCG CBD and the words “Labour Hire Company or Subcontractor” (Ex K at 32063-32070). It is noted that Debbie Akkawi is referred to in the evidence in chief of Scott Crabbe (at T 944.32-36) in connection with the Reliance Cleaning Group.

206. [1206]

     Gino Cassaniti says (referring again to the liquidator’s evidence as to jump on directors) that it is likely that he was also a jump on director with respect to RCG CBD (a fortiori given that the sole signatory on the RCG CBD account was, at all times, George Khalil). Gino Cassaniti again adopts the submissions of other parties concerning his lack of involvement in the affairs of RCG CBD. Further, it is said that there are no relevant indicia of control by Gino Cassaniti (such as evidence that Gino Cassaniti made or caused to be made any payments to himself or members of his family by RCG CBD).

207. [1207]

     It is submitted on the basis of the above matters that at no time was Gino Cassaniti ever properly a director (whether actual, shadow or de facto), of RCG CBD; rather, that the director was George Khalil; and therefore, Gino Cassaniti owed no fiduciary duties in respect of RCG CBD.

208. [1208]

     At the outset, the plaintiffs cavil with the contention (at [21] of Gino Cassaniti’s submissions – and with similar submissions raised elsewhere by other defendants) that, in a claim of a global nature, the claim must fail if any of the assumptions on which the overall claim is based are not proved or facts or inferences that are inconsistent with those assumptions are not excluded.

209. [1209]

     The plaintiffs say that their claims against Gino Cassaniti in the Bluemine, Earth Civil and RCG CBD Proceedings are that he, either as a director or de facto director of the Insolvent Companies, breached his fiduciary duties to those companies. They say that the factual elements of the cause of action against Gino Cassaniti require proof: that he was a director of the relevant companies; that he breached his fiduciary duties to those companies; that such breaches were dishonest and fraudulent, and that those breaches caused the relevant companies’ loss.

210. [1210]

     The plaintiffs say that the accessorial claims against Gino Cassaniti in the Diamondwish and Rackforce Proceedings are that he knowingly assisted the director of those companies (Frank Criniti) to breach his fiduciary duty to those companies; and that the factual elements of those causes of action against Gino Cassaniti require proof: that a director of the relevant companies breached his fiduciary duties to those companies; that such breaches were dishonest and fraudulent; that Gino Cassaniti assisted the director; that Gino Cassaniti knew of the director’s breaches, and that knowledge will arise from the second limb of Barnes v Addy; and that those breaches caused the relevant companies’ loss.

211. [1211]

     It is submitted by the plaintiffs that their overarching conspiracy contention goes to their case that, from the evidence establishing factual elements of the overarching conspiracy and in the absence of direct evidence or credible evidence of a contrary explanation, it is be inferred that Gino Cassaniti dishonestly breached his directorial duties (or knowingly assisted another) as alleged by implementing the conspiracy. In other words, it is said that the overarching conspiracy goes to dishonest conduct in those breaches of fiduciary duties.

212. [1212]

     The plaintiffs say that the elements of the causes of action against Gino Cassaniti for which they claim relief (as, for example, set out at [228]-[260] of the Bluemine Statement of Claim) in turn reference the entirety of the Statement of Claim. They say that, on the pleadings and the conduct of the case, it is clear that their claim against Gino Cassaniti is that he owed fiduciary duties as a director which he dishonestly breached (or that he knowingly assisted others in the dishonest breach of their fiduciary duties) and, in consequence of those breaches, the plaintiffs suffered loss; and that the only question now is whether the evidence is sufficient to establish those elements of the causes of action against Gino Cassaniti.

213. [1213]

     The plaintiffs maintain that the evidence establishes dishonesty in Gino Cassaniti’s breaches of fiduciary duties and establishes Gino Cassaniti’s implementation and knowing participation in dishonest breaches of duty by Frank Criniti, as alleged regarding the transactions in respect of each of the Insolvent Companies for which relief is claimed. The plaintiffs point to the evidence of Gino Cassaniti’s role at Banq and the conspiratorial relationship between the Primary Conspirators (as referred to in their closing submissions at [284]-[304]).

214. [1214]

     Insofar as Gino Cassaniti suggests (at [41] of his submissions and see also at [225]) that the plaintiffs’ claim for compensation from him is for, or includes, the entirety of the amounts paid into the Insolvent Companies, the plaintiffs say that no such claims have been made.

215. [1215]

     Turning then to the particular submissions made by Gino Cassaniti, the plaintiffs respond as follows, emphasising again that Gino Cassaniti: was not prepared to come before the Court to be cross-examined on the issue; did not adduce any independent corroborative evidence of his lack of involvement; did not cross-examine Fred Khalil or Peter Abboud; and that his defence (in answer to claims based upon his alleged fraud and dishonesty) comprised bare denials and assertions in his affidavit evidence to the effect that he: did not own or control Banq; did not engage with Banq’s clients; and that documents bearing his signature evidencing his involvement in the conspiracy were forged.

216. [1216]

     The plaintiffs say that Gino Cassaniti’s evidence of his ownership and control of Banq was directly contradicted by evidence from each of Ivana Cassaniti, Fred Khalil and Peter Abboud (none of whom was cross-examined in respect of the evidence which contradicted his evidence; including that there was no cross-examination of Ivana Cassaniti regarding her oral evidence of his interest in Banq’s profits).

217. [1217]

     The plaintiffs say that Gino Cassaniti’s evidence that: (i) he did not engage with Banq’s clients was directly contradicted by evidence from former clients such as Elias Nassar and Mario Sande; and (ii) it was not his signature on the documents for the relevant companies’ creditors’ liquidations (which the plaintiffs say show his direct involvement) was not supported by his own expert’s evidence. The plaintiffs place emphasis on this as evidence that Gino Cassaniti lied about his role in the relevant companies’ creditors’ voluntary liquidations (see the plaintiffs’ closing submissions at [575]-[632]).

218. [1218]

     It is said that nowhere in Gino Cassaniti’s submissions does he satisfactorily deal with his role in the creditors’ voluntary liquidations; in particular, that he does not deal with signing the documents, the false proofs of debt and appointing Fred Khalil as a proxy (other than to say it was not his signature).

219. [1219]

     It is said that, in those circumstances there was sufficient evidence from which to draw adverse inferences and about which (being matters peculiarly within his knowledge) Gino Cassaniti could have provided direct evidence (but did not without explanation), and thus, Gino Cassaniti came under “an evidential burden, or an onus of adducing evidence” (citing Krstic v Brindley at [26]).

220. [1220]

     As to Diamondwish and Rackforce, the plaintiffs say that Gino Cassaniti’s submissions in reply are essentially directed at why he says reliance cannot be placed on Frank Criniti’s evidence. The plaintiffs submit that Frank Criniti (who is no longer a defendant in these Proceedings) has no axe to grind.

221. [1221]

     Pausing here, it was apparent from Frank Criniti’s evidence in the witness box that he blames Gino Cassaniti for what occurred in relation to the matters the subject of the claims that had been made against Frank Criniti in these Proceedings and the situation he has found himself in – his blunt (and disparaging) assessment being that he was manipulated by “an idiot” (at T 556). However, as I have explained above, while I exercise caution in accepting evidence that may well be influenced (subconsciously or otherwise) by his personal feelings towards Gino Cassaniti, I did not find Frank Criniti to be a dishonest witness; and his account of events (and in particular matters such as the advice given in relation to the so-called spider’s web of transactions, the backdating of records, and the winding up of companies) is consistent not only with what the objective records show to have occurred over the relevant period but also with advice given to other clients of Banq over the relevant period (even if not exactly mirroring that other advice). To my mind that dispels the suggestion that Frank Criniti’s evidence was motivated by some axe to grind against Gino Cassaniti.

222. [1222]

     I have already dealt with the submissions made for Gino Cassaniti as to matters such as the suggestion put to Frank Criniti in cross-examination as to an incident at a Christmas party at the offices of Banq (about which there was no evidence) and the inference sought to be raised by Gino Cassaniti in his submissions (at [117]) that the transfer to Elle Barikhan was for Frank Criniti’s own purposes (which suggestion the plaintiffs say was not put to Frank Criniti in cross-examination and is not open here to be made). The plaintiffs’ response to those is that there is not basis for any adverse inference to be drawn in respect to those matters (and they say that Gino Cassaniti’s response to the evidence from Frank Criniti of Gino Cassaniti’s involvement in the implementation of the Scheme as it applied to Diamondwish and Rackforce was insufficient).

223. [1223]

     As to Earth Civil, the plaintiffs say that Gino Cassaniti’s submissions focus on why the evidence as to his involvement in Earth Civil should not be accepted (noting that Gino Cassaniti’s evidence in relation to Earth Civil was that the documents bearing his signature were forgeries, but that he did not come before the Court to deny his involvement in Earth Civil).

224. [1224]

     As to the submission by Gino Cassaniti (at [149]), to the effect that Earth Civil was incorporated by Michael Abou-Antoun for a legitimate commercial purpose (namely, to provide labour hire services to other companies within the group), the plaintiffs point out that: (i) there is no evidence at all in these proceedings from Michael Abou-Antoun; (ii) Andre Abou-Antoun conceded that he took approximately $1 million in cash from Earth Civil purportedly for wages but (other than his evidence in Court at T 682.30-35 that there were a couple of people that he paid during the period – who when pressed he thought were named Richard and Julie) was unable to name particular employees that had been paid with that cash (see T 682 where Andre Abou-Antoun said that he could name couple but that “there was a lot more but just off the top of my head casting my memory back to that period there they are employees that were with us in that point of time. There was a lot more but yeah…”); and (iii) Andre Abou-Antoun’s evidence was that Gino Cassaniti told him to take the money out of Earth Civil (cf the submission by Gino Cassaniti at [154] to the effect that there is no evidence that he approved of, let alone knew, of the withdrawals or the purposes to which they were put). The plaintiffs say that it is not contended that there were invoices in respect of payments out by Earth Civil.

225. [1225]

     As to Bluemine, the plaintiffs say that Gino Cassaniti’s submissions focus on elevating the role of Andrew Barsa as the director of Bluemine, but do not deal with fact that Gino Cassaniti gave no evidence about his relationship with Andrew Barsa and was not prepared to be cross-examined on the subject.

226. [1226]

     As to RCG CBD, the plaintiffs say that Gino Cassaniti’s submissions are to the effect of adopting (as exculpatory) the practice of “jump on” directors while ignoring the evidence as to Gino Cassaniti’s complicity in the false proofs of debt and proxies for RCG CBD’s creditors’ voluntary winding up.

227. [1227]

     The plaintiffs submit that Gino Cassaniti’s bare denial of knowledge of the creditors’ voluntary liquidations is a lie and that this, in the absence of plausible evidence from him that would support an alternative inference (rather than mere unsubstantiated general assertions), enables it confidently to be concluded that Gino Cassaniti dishonestly and fraudulently breached his directorial duties to the Insolvent Companies.

228. [1228]

     The plaintiffs’ case is predicated on the position of Gino Cassaniti as director (be it de jure, de facto, deemed or shadow) of Earth Civil, RCG CBD and Bluemine (and, where relevant, also of Banq). As to Diamondwish and Rackforce, the plaintiffs contend that Gino Cassaniti is accessorially liable for Frank Criniti’s breaches of fiduciary duty as the director of those companies.

229. [1229]

     As to the fact of Gino Cassaniti’s directorship of the relevant companies, the plaintiffs rely not only on ASIC records (which, pursuant to s 1274B of the Corporations Act, constitute proof of, inter alia, the appointment of directors in the absence of evidence to the contrary) (see Lewis Securities v Carter per Emmett AJA at [161]); but also on the evidence that they say leads to the conclusion that he was acting as a director of the relevant companies, within the meaning of the definition of “director” in s 9 of the Corporations Act, including in the sense that he was the driving force behind their business dealings (see Mistmorn Pty Ltd (in liq) & Wily v Yasseen (1996) 21 ACSR 173 at 178 per Davies J). The plaintiffs note that where Gino Cassaniti denies the veracity of ASIC documents recording his directorships (contending, as he does, that documents are forgeries or were not authorised by him), the onus is on him to prove that the ASIC register recording his directorship of the relevant companies is wrong.

230. [1230]

     As to Gino Cassaniti’s role in relation to the various entities, I find as follows.

231. [1231]

     First, I find that Gino Cassaniti was indeed a principal of Banq. I accept Ivana Cassaniti’s evidence to the effect that the funds contributed to the establishment and or formation of Banq were jointly provided by the couple and that she regarded her shareholding in Givana (through which 60% of the shares in Banq were held) as jointly held or, perhaps more precisely, held by her on behalf of her and her husband jointly. It is not necessary, in order to reach that conclusion, to treat Ivana Cassaniti as a “front” for her husband; or to regard her role as that of some kind of marital lackey. Rather, it seems to me most likely that the shares in Givana were placed in Ivana Cassaniti’s name for some form of asset protection purpose (consistent with the kind of asset protection structuring advice given to numerous of Banq’s clients) but that Gino Cassaniti continued to have an interest and play a role in the operation of the business of Banq.

232. [1232]

     While I accept that the self-exculpatory evidence of alleged co-conspirators (Fred Khalil and Peter Abboud) needs to be treated with caution, it is clear from the evidence of others (such as Frank Criniti and Elias Nassar) that Gino Cassaniti played a pivotal role in attracting (and advising) clients to the firm; and Gino Cassaniti himself accepts that he provided specialist tax and accounting advice to clients of Banq. Any suggestion that Peter Abboud was responsible for formulating (as opposed to adopting, following or implementing) the structural advice given to clients at the relevant time is implausible given his junior role at the firm and the fact that he was still studying at the time. As to the role of Fred Khalil in advising clients in relation to such structural issues, that can only logically have been in consultation with Gino Cassaniti since in various instances the arrangements put in place involved the utilisation of companies with which Gino Cassaniti, not Fred Khalil, or for that matter Peter Abboud, had an ownership or directorial role.

233. [1233]

     The weight placed by Gino Cassaniti on the organisational chart prepared by Fred Khalil at the time of the ATO interview (which omits reference to Gino and Ivana Cassaniti and places Fred Khalil himself at the apex of the operations of Banq) is not in my opinion sufficient to displace the evidence of various of the witnesses (referred to earlier in these reasons) as to Gino Cassaniti’s involvement in Banq over the relevant period. I am comfortably persuaded of this, even accepting that Gino Cassaniti was said to have been suffering from a lot of personal problems and in the midst of litigation with his cousin at the time.

234. [1234]

     It is inherently implausible that someone in the position of Gino Cassaniti – a specialist tax adviser who had played a formative role in Banq Accountants and in its successor firm, Banq, and in whom numerous clients clearly reposed their trust (see, for example, Elias Nassar’s evidence that he would not have retained Banq had he been aware of Gino Cassaniti’s bankruptcy), who (through Ivana Cassaniti’s shareholding in Givana – that she gave evidence was held jointly with her husband) had a clear financial interest in the performance of the business, would have completely abdicated any oversight or role in the business. Further, this is inconsistent with the evidence as to Gino Cassaniti’s ongoing role including in matters such as the change from time to time in, holding by Gino Cassaniti of, directorships in various of the companies in question and the subsequent winding up of the companies.

235. [1235]

     It is further implausible that Gino Cassaniti had no interest or awareness over the relevant period in what was happening by others in the provision of accounting advice at Banq; and this is inconsistent with the evidence not only of Frank Criniti, Mario Sande and Elias Nassar but also with the evidence of: David Rizk as to how he became appointed and then removed as a director of Givana Prestige; Andrew Barsa as to the request he made to Gino Cassaniti when he wished to cease to be a director; and George Said as to the withdrawal of cash on Gino Cassaniti’s instructions. All of those matters make clear Gino Cassaniti’s ongoing involvement in and presence at Banq.

236. [1236]

     I should make it clear, if it has not already been made sufficiently clear, that I do not draw simply from the fact that Gino and Ivana Cassaniti are married that there should be imputed to him Ivana Cassaniti’s knowledge of the day to day affairs of Banq (assuming, contrary to her evidence and submissions, that she had a continuing day to day involvement in the business after the birth of her children). However, I do find significant Ivana Cassaniti’s evidence as to the request by Gino Cassaniti that she transfer control of Givana Prestige to Frank Criniti (and her explanation as to the signing of the renewal dealer’s licence) as indicative of Gino Cassaniti’s involvement in companies associated with Banq and its clients. The evidence of statements made by Fred Khalil and Peter Abboud to various clients of the firm as to companies through which invoices could be issued (being companies in which they held no formal role), as adverted to above, also bespeaks Gino Cassaniti’s ongoing involvement in Banq’s affairs. Therefore, I find that Gino Cassaniti was a de facto director of Banq.

237. [1237]

     Second, I cannot accept Gino Cassaniti’s denial of being a director of Earth Civil, RCG CBD and Bluemine at the relevant times or that he owed them fiduciary or statutory duties.

238. [1238]

     The position as stated in the ASIC records (which are prima facie evidence of the matters there recorded) has been set out already. Gino Cassaniti is there recorded as being a director of: Earth Civil from 1 July 2012 to 18 March 2014; RCG CBD from its incorporation on 16 May 2012 to 18 March 2014; and of Bluemine from 1 April 2013 to 18 March 2014. Subject to the position in relation to Bluemine, the statutory presumption as to the accuracy of ASIC records has not in my opinion been displaced as to Gino Cassaniti’s directorship during those periods.

239. [1239]

     As to Bluemine, I am satisfied that Gino Cassaniti acted as a de facto director from its incorporation on 7 June 2012 until 1 April 2013. It is clear that Andrew Barsa was not carrying on any real directorship functions and responsibilities during the period that he was recorded as the sole director of the company. I can accept that Andrew Barsa was genuine in his evidence that the company was set up for the purpose of effecting the truck purchases from Jian Holdings (though it is by no means clear what commercial justification there was for so doing) and that he may have had something to do with the authorisation of the relevant transfers. However, beyond effecting the transfers of funds to George Abboud, there is nothing to show that he played any ongoing role in the affairs of Bluemine. In contrast, I find that Andrew Barsa’s evidence, in particular that he sought Gino Cassaniti’s permission to cease his directorship of Bluemine, speaks volumes to Gino Cassaniti’s influence over Mr Barsa in relation to Bluemine, and thus I find that Gino Cassaniti was a de facto director of Bluemine from its incorporation. While I note the AKA Parties’ submission that Andrew Barsa’s evidence as to who it was at Banq that was managing and controlling the business of Bluemine often referred collectively to Gino Cassaniti, Peter Abboud and Fred Khalil, the fact that others also performed managerial roles at Bluemine does not impact on a finding that Gino Cassaniti was similarly “managing” the business; it is simply the case that no claim was brought against Peter Abboud or Fred Khalil as to whether they were shadow or de facto directors of Bluemine.

240. [1240]

     As to RCG CBD, again I am not persuaded that the prima facie position that ASIC records are correct has been displaced. I accept that George Khalil appears to have continued to have a role in the company (see the bank account details) notwithstanding the ASIC record that he ceased to do so from 16 May 2012. However, that does not gainsay Gino Cassaniti continuing to have a role in the company.

241. [1241]

     I therefore find that Gino Cassaniti was a director or deemed director of each of Banq, Earth Civil, RCG CBD and Bluemine at the relevant times (and, so far as it is relevant, that he was also the deemed director of Involved Recruitment at the relevant times – having regard to the sheer implausibility of George Said being able to act in a directorship role other than in accordance with Gino Cassaniti’s instructions). I note that it was not pleaded that Gino Cassaniti was a de facto or shadow director of Diamondwish or Rackforce.

242. [1242]

     As a director, it cannot be disputed that Gino Cassaniti owed both fiduciary and statutory duties to Earth Civil, RCG CBD and Bluemine.

243. [1243]

     As noted above, the plaintiffs maintain that the Primary Conspirators (i.e., including Gino Cassaniti) agreed to use dishonest (and fraudulent) means with the intention of obtaining, making use of, or prejudicing the economic interests of the Insolvent Companies (pointing to the principles relating to conspiracy as outlined in Peters v R at [74], [79]-[80] but not here seeking damages for fraud).

244. [1244]

     I accept that it would not be unusual for an accounting firm to be the registered office of companies that were its clients; and I accept that an accounting firm might well provide advice as to how companies within a corporate group should be structured in a tax effective way. However, the appointment of directors with no apparent involvement in the companies (such as Christopher Cherry) or apparently as “jump on” directors prior to the winding up of companies (such as Aloeseiafi Faanoi, about whom almost nothing is known on the evidence before me) and seemingly with no regard for their ability or expertise as directors (such as David Rizk and George Said), let alone the appointment as directors of persons who candidly admit that they had serious drug problems or other difficulties at the time, goes well beyond what I would expect of ordinary accounting firm practices.

245. [1245]

     As to the significance placed by Gino Cassaniti on the use of the Banq Maximiser Account (and in particular his assertion as to the lack of knowledge of that account), apart from the fact that Gino Cassaniti was seemingly not above emailing directions to the bank purportedly in the name of or on behalf of his wife in other contexts, I have only his assertion (not tested in cross-examination) as to a lack of awareness of the accounts and operations of Banq at the relevant times (and I am not prepared to place weight on such assertions).

246. [1246]

     I accept that there is no evidence that Gino Cassaniti gave advice to the Borg Parties in relation to the establishment of Borg Family or Borg Civil (that advice coming from Fred Khalil) and that the advice given to the AKA Parties is likely to have been from Peter Abboud and Fred Khalil rather than from Gino Cassaniti. However, I am satisfied that the overall structuring advice must have been formulated by Gino Cassaniti in consultation with at least Fred Khalil (and that Peter Abboud was well aware of the substance of that advice); and that Gino Cassaniti must have been aware that such structuring advice would be given (and was being given) to various clients of Banq other than those to whom Gino Cassaniti personally gave advice. The aptly described “spider’s web” of companies incorporated through Banq’s offices and the change of directorships and appointment of directors (with Gino Cassaniti’s involvement), seemingly on an arbitrary basis (such as the manner in which David Rizk and George Said were appointed as directors of companies) is evidence of Gino Cassaniti’s ongoing involvement in the arrangements contemplated by the alleged Scheme.

247. [1247]

     As to the authorisation of payments in and out of the respective companies, while I accept that Gino Cassaniti may not have had direct knowledge of all of the transfers, I accept that he was a principal of Banq and I find that he must have been aware of amounts passing through its accounts from time to time.

248. [1248]

     I do not accept that the evidence establishes that Bluemine operated as a labour hire company; nor do I accept that the evidence is consistent in relation to the position of Rackforce being no more than a labour hire company (though I accept that there was evidence that certain of the Banq employees may have been employed through or paid by it).

249. [1249]

     As to the Earth Civil impugned transactions, I accept that these do not neatly fit within the overall pattern or mould of the alleged conspiracy (having regard to the matters to which the AKA Parties have pointed). I accept that Gino Cassaniti was not involved in the initial advice given in relation to the structuring of the AKA Group companies and had no direct involvement in that regard. It was clearly Andre Abou-Antoun’s understanding (albeit likely to have been gleaned from his discussion with Michael Abou-Antoun) that the advice as to restructuring came from Gino Cassaniti. More relevantly, perhaps, it was his evidence that the withdrawal for moneys from Earth Civil was “as per [Gino Cassaniti’s] instructions”. I do not accept that there is no evidence that Gino Cassaniti did not give instructions in relation to invoicing (and it is again significant that, when Fred Khalil or Peter Abboud referred to having companies who could issue invoices, they were referring to companies controlled by Gino Cassaniti).

250. [1250]

     The idea that Andre Abou-Antoun had sufficient sophistication and knowhow to be able to determine how the impugned transactions and payments were to be effected through the companies without the assistance and advice of the accountants at Banq is (having regard to his evidence in the witness box), without disrespect to him, risible. Further, the need for the interposition of other entities in the payment chain both for this and the Bluemine truck transactions is unexplained.

251. [1251]

     As to Bluemine, as noted above, it is clear that Andrew Barsa’s role in Bluemine was limited to the truck transaction and payments to George Abboud.

252. [1252]

     I find that the conduct in which Gino Cassaniti engaged in promoting (in the case of certain of the Banq clients) and/or assisting in the implementation of the Scheme Recommendation (in the case of others such as the Borg Parties and AKA Parties) (referred to in the chronology of events and submissions above) exposed Earth Civil, Bluemine and RCG CBD to the risk of tax losses and insolvency; and amounted to breach of his fiduciary and statutory duties as a director of those companies. It is evident from his conduct and involvement in the scheme that Gino Cassaniti was not discharging his duties with the degree and care of a reasonable director (s 180), nor was he exercising his powers or discharging his duties in good faith in the best interests of Bluemine and for a proper purpose (s 181); and find that he was using his position improperly to gain an advantage for himself and others (s 182(a)) and to cause detriment to Bluemine (s 182(b)). By way of a similar analysis I find that he has breached his fiduciary duty of care and diligence and to act in the best interests of Bluemine.

253. [1253]

     In particular, I consider it beyond doubt that Gino Cassaniti breached those duties in recommending or advising the transactions in question in that they clearly exposed Earth Civil, Bluemine and RCG CBD to the risk of tax liabilities that he must have known (and either intended or was wilfully blind as to the risk) that they would not be in a position to meet in due course – and that they would then be wound up. I accept the characterisation of Gino Cassaniti’s treatment of the companies as “cavalier” (and I refer to Frank Criniti’s evidence in this regard, which I accept, as to how Gino Cassaniti described the backdating of directorships, winding up of companies and the “spiders web” of transactions; which evidence, as I have already noted, is consistent with what in fact happened across a range of Banq clients and of which Frank Criniti himself would not have been aware at the time). I also find that Gino Cassaniti must have been aware of the dishonesty of the invoicing aspects of the Scheme. Ultimately, I accept that the breaches of duty were dishonest and fraudulent in that, by recommending and implementing the Scheme resulting in the breaches of duty, Gino Cassaniti sought to deprive the companies of their ability to meet their tax liabilities in order to secure tax benefits and that this is a clear transgression of the ordinary standards of honest behaviour.

254. [1254]

     As to the accessorial liability claims against Gino Cassaniti in the Diamondwish and Rackforce proceedings, the allegation is that he knowingly assisted Frank Criniti to breach his fiduciary duties to those companies. I accept the plaintiffs’ submission that the elements of that claim are here made good. Frank Criniti was clearly in breach of his duties as director of those companies in entering or causing the companies to enter into the impugned transactions (in the manner in which Gino Cassaniti had advised) and this was at Gino Cassaniti’s instruction and with his involvement. Moreover, I find that Frank Criniti’s breaches of duty were part of a dishonest and fraudulent design that transgressed ordinary standards of honest behaviour (see below).

255. [1255]

     It is clear that Gino Cassaniti assisted Frank Criniti in that design. I accept (and find it significant) Frank Criniti’s evidence that he did not even know what business Diamondwish carried on; and that both it and Rackforce were incorporated on Gino Cassaniti’s advice and as part of Gino Cassaniti’s oversight of the accounting arrangements for the Criniti companies. The suggestion that Frank Criniti himself conceived of or implemented the arrangements pursuant to which these and the other Criniti companies were incorporated and operated (even if he did have the motivation to minimise his personal tax) is implausible in the extreme. Someone with accounting expertise must have been responsible for putting in place the structure adopted for the Criniti companies; and I am comfortably persuaded that that was Gino Cassaniti, as Frank Criniti says.

256. [1256]

     Gino Cassaniti’s knowledge of the dishonesty of the Scheme can confidently be inferred from the evidence as to the advice he gave to Frank Criniti and his continuing involvement in aspects of the Scheme.

257. [1257]

     Therefore, subject to the issues of causation and loss (which I consider in due course below), I find that the claimed liability of Gino Cassaniti for breach of fiduciary and statutory duties, and accessorial liability in relation to Frank Criniti’s breach of those duties, has been established to the requisite degree of satisfaction.

Submissions and findings – Fred Khalil

1. [1258]

   The plaintiffs carry out a similar analysis of the evidence in relation to Fred Khalil’s alleged involvement in the Scheme, pointing to his relationship with others at Banq and his role at Banq and Banq Accountants (as set out above).

2. [1259]

   As to Fred Khalil’s role in recommending the Scheme, the plaintiffs refer to: Tanya Borg’s evidence (see above) that Fred Khalil advised her (and her husband, Michael Borg) in about mid 2012 as to the structuring of the Borg companies and the invoicing of payments; and the reliance of Borg Civil on the advice of Fred Khalil and Banq; Andre Abou-Antoun’s evidence of the advice given in relation to the incorporation of the various AKA companies, the utilisation of Earth Civil ostensibly as a labour hire entity and the use of false invoices; and Mario Sande’s evidence to a similar effect.

3. [1260]

   The plaintiffs say that essentially the same structuring advice was given by Fred Khalil to Tanya and Michael Borg as was given by Gino Cassaniti to Frank Criniti and by Peter Abboud and Fred Khalil to Andre Abou-Antoun and the AKA Parties. Additionally, the plaintiffs submit that essentially the same invoicing advice was given by Fred Khalil to Tanya Borg regarding the payments into RCG CBD as that given by: either Gino Cassaniti, Fred Khalil or Peter Abboud to Mario Sande in respect to the Statewide Parties payments into RCG CBD; Fred Khalil and Peter Abboud to Andre Abou-Antoun regarding the payments into Bluemine; and by Gino Cassaniti to Elias Nassar in respect to the payments by the Wenman Group into RCG CBD. The plaintiffs submit that it is inherently unlikely that the same advice was given by three different people (all of whom were principals of Banq) to those various clients of Banq in the absence of the Primary Conspiracy. I agree.

4. [1261]

   Reference is again made to Tanya Borg’s evidence (at [48] of her affidavit sworn 4 December 2018) in relation to Fred Khalil’s involvement in the accounting systems of the Borg Parties; Mario Sande’s evidence in relation to the Statewide Parties; Andre Abou-Antoun’s evidence in relation to the AKA Parties and Frank Criniti’s evidence in relation to the Criniti Group companies (see above). As to Tanya Borg’s evidence, in her affidavit Tany Borg deposed (at [48]):

5. [1262]

   The plaintiffs again submit that there was no satisfactory explanation for the round robin transactions identified in the pleadings into which the Borg Parties entered and note Tanya Borg’s explanation that “Fred instructed us to do it with this” in relation to the transactions (see at T 1369.26).

6. [1263]

   The plaintiffs say that (in the absence of explanation, and upon the whole of the evidence relating to the transactions between Borg Family and RCG CBD) it is to be inferred that Fred Khalil made representations to Tanya Borg that she has failed to reveal to the Court; and that the representations were as pleaded in [148] of the RCG CBD third further amended statement of claim, namely, that, by utilising RCG CBD in these transactions in the circumstances and events that did occur (including the absence of genuine commercial documents relating to the transactions), Borg Family could claim GST credits and depreciation deductions, reduce its taxable income, and acquire assets from Excavation for virtually no consideration.

7. [1264]

   The impugned Wenman Parties transactions involved Ignite Promotions making payments totalling $781,955 to RCG CBD in the period 30 January 2013 to 6 March 2013, and RCG CBD making payments totalling $710,868.20 to Wenman Brimak in the period 5 February 2013 to 7 March 2013 (i.e. minus a fee of ten elevenths). The plaintiffs point to Elias Nassar’s evidence that RCG CBD did not provide any labour hire services to Ignite Promotions.

8. [1265]

   The impugned Statewide transactions, involved payments from State Wide Design to RCG CBD and subsequent payments from RCG CBD to Statewide Printing minus a fee of ten elevenths. The plaintiffs say that, Mario Sande’s evidence (see above) provides that on each occasion that there was a payment into RCG CBD and a subsequent payment out of RCG CBD there had to have been a conversation between one of Fred Khalil, Peter Abboud or Gino Cassaniti (noting that Mario Sande was not able to identify or was not prepared to identify which of them) on the one hand and George Khalil on the other. The plaintiffs submit that the transactions involving the Statewide Parties could not have occurred without George Khalil’s knowledge and co-operation as the controller of RCG CBD’s bank account.

9. [1266]

   Further, it is said that, as the person who lodged the tax returns and other such documents for State Wide Design and Statewide Printing, Fred Khalil must have been aware that there were no genuine commercial documents in respect to any of the payments into or out of RCG CBD by State Wide Design and Statewide Printing and that the Statewide Parties had no legitimate basis to make and receive the payments and claim them as legitimate expenses. It is said that the inference should be drawn that the transactions were not for any legitimate commercial reason but were in furtherance of the Primary Conspiracy. It is said that the true explanation for the transactions was within the knowledge of Fred Khalil (who did not reveal that to the Court).

10. [1267]

    The plaintiffs point to the evidence given by Fred Khalil in his ATO interview as to the impugned Reliance Cleaning payments.

11. [1268]

    The plaintiffs say that mere “invoicing” is not a business activity and cannot be the business of any company, but that the Primary Conspirators from time to time regarded “invoicing” per se as a supposed form of business activity. It is said that it could be so only in the course of fraudulent activity; and that “invoicing” was the conspirators’ euphemism for the activity of the company that would issue false invoices. The plaintiffs submit that Fred Khalil’s response to the ATO about the different functions Reliance Cleaning and RC Group Aust is nonsense and that his inability to give a straight answer to the ATO corroborates the liquidator’s position that Reliance Cleaning was “just another pawn in the scheme used to wash money into the hands of the primary conspirators or those associated with them”.

12. [1269]

    In summary, the impugned AKA Parties to Earth Civil transactions involved AKA NSW and AKA Civil paying a total of $986,000 into Earth Civil and $965,000 being withdrawn in cash by Michael and Andre Abou-Antoun (see Tables 1.1 to 1.3). The plaintiffs refer to Andre Abou-Antoun’s evidence that this “was a device of Gino Cassaniti and Fred Khalil” (see above).

13. [1270]

    In summary, the impugned AKA Parties to Bluemine transactions involved AKA Civil and AKA NSW paying a total of $3,851,818.21 to Bluemine in the period from 3 December 2012 to 1 May 2013; and in the period from 4 December 2012 to 9 May 2013, Bluemine paying a total of $3,426,215 to MAL Land Group, LAM Haulage and The Great Brothers (see Table 5.2). (The plaintiffs say that some payments were unable to be traced.) The plaintiffs say that it is clear that all of those payments were made pursuant to the arrangement between Peter Abboud and Fred Khalil on the one hand and Andre Abou-Antoun on the other, as referred to above (and that this demonstrates the conspirators’ control of the flows of money). In this regard, the plaintiffs point to Andre Abou-Antoun’s evidence in cross-examination that Fred Khalil and Peter Abboud gave the directions as to the bank transfers.

14. [1271]

    The payments made from and to Diamondwish and Rackforce referred at [59(i)], [59(ii)], [66(i)] and [66(ii)] above are broken down in the plaintiffs’ closing submissions in Tables 7.1, 7.7, 9.1 and 9.2. The plaintiffs refer in this regard to Frank Criniti’s evidence that, inter alia, payments out were “always done under the instruction of Gino Cassaniti” (see above).

15. [1272]

    As to Fred Khalil’s involvement in benefits to the Borg Parties, Wenman Parties, Statewide Parties, AKA Parties and Criniti Companies, the plaintiffs rely on the preparation and lodgement by Fred Khalil of the BAS and tax returns for those parties which assisted to claim tax benefits. Reference is made to the taxation benefits claimed and received by Borg Family and Borg Civil as a result of the transactions with RCG CBD (as set out above).

16. [1273]

    For example, the plaintiffs say that Fred Khalil, by lodging Borg Civil’s BAS, as the company’s tax agent, declared that those BASs were true and correct (Ex K at 36432-36444); and also that by lodging the Borg Family Trust tax return, he acknowledged that the tax return had been prepared in accordance with information supplied by Borg Family, that he had obtained from the director of Borg Family a declaration that the information was true and correct, and he had been authorised to lodge the return (Ex K at 36453). The plaintiffs say that Fred Khalil knew that these taxation returns were false.

17. [1274]

    The plaintiffs point to the same declarations and acknowledgements made in the BASs and tax returns for the Wenman Parties, Statewide Parties, AKA Parties and Criniti Companies, and submit that Fred Khalil knew that the contents of those forms were false given that the transactions were not genuine and that he knew that those parties were not entitled to the deductions.

18. [1275]

    As to the AKA Parties in particular, the plaintiffs say that Fred Khalil knew that when he prepared the BAS and tax returns lodged by AKA NSW and AKA Civil that they were claiming the false invoices issued by Bluemine as legitimate expenses in their returns. It is said that, given his conversations with Andre Abou-Antoun referred to above, he did so with the knowledge that AKA NSW and AKA Civil were not entitled to those deductions that those expenses were false, as was the information that he was providing to the ATO.

19. [1276]

    As to the payments totalling $653,439.54 made by Banq to RCG CBD in the period from 31 July 2012 to 27 May 2013, these were said to have been for labour hire services provided by RCG CBD to Banq (see the letter dated 6 October 2016 from Brown Wright Stein to the ATO, Ex K at 31914-31922 and the purported invoices issued by RCG CBD to Banq, Ex K at 31923-31976). The plaintiffs say that it cannot seriously be contended that those invoices were genuine (given the false invoice numbers, Banq’s PO Box and telephone number in the header and that the format was identical to other false invoices, referring by way of example to Mario Sande’s and George Said’s evidence about this). It is noted that Banq’s 2013 profit and loss statement disclosed no such labour hire expense (Ex K at 34233). Further, it is said that Peter Abboud admitted (see below) that RCG CBD was never a labour hire company.

20. [1277]

    As to the payments totalling $920,415 made by RCG CBD to Banq in the period from 10 September 2012 to 30 May 2013 (Table 3.2), it is said that the basis of those payments has not been explained by any of the Primary Conspirators. It is said that, given that the payments to Banq from RCG CBD and Bluemine totalled $1,514,060 in the 2013 financial year and that Banq had substantial clients including the Criniti companies, the Borg Parties, the AKA Parties, the Wenman Parties and the Statewide Parties, it is clear that at least a significant part of those payments were not disclosed as income (considering $1,575,371 was disclosed) (Ex K at 34233).

21. [1278]

    Insofar as Fred Khalil (in his affidavit at [46]) suggests that he and other staff at Banq undertook clerical work for RCG CBD for a period of time, the plaintiffs note that no records were produced by him either to the liquidator or to the Court which would substantiate any work let alone work to the value of $920,415. Reference is made to Fred Khalil’s evidence in the course of his ATO interview in this regard (see above).

22. [1279]

    It is said that the total amount paid by RCG CBD far exceeded what could be reasonably expected for accounting fees for an eight month period, and that given this and the rounded amounts involved, any assertion that Fred Khalil did not know what those payments were for is not believable.

23. [1280]

    The plaintiffs say that the payments made by RCG CBD to Banq by the Primary Conspirators were in furtherance of the Primary Conspiracy and saw large amount of cash move through RCG CBD into their hands, as pleaded in the RCG CBD third further amended statement of claim.

24. [1281]

    The RCG CBD third further amended statement of claim identifies a number of transactions that were made by RCG CBD to companies associated with Fred Khalil (see at [44], [166], [171], [211], [298]). The liquidator in his evidence has not identified any benefit that RCG CBD received in return for those payments; nor was he provided with any documents let alone genuine commercial documents which properly explained any of those transactions. The affidavit evidence of Fred Khalil is said to be “unsurprisingly bereft of any explanation” as to why those payments were made to entities owned by and/or associated with him, the obvious inference from his silence is that they were made as part of the Scheme pleaded by the plaintiffs and were part of the benefit he received from his and Banq’s involvement in that scheme.

25. [1282]

    The plaintiffs say that those transactions are further patent examples of a conspirator getting cash out of various companies and into RCG CBD, and through it into his or others’ hands, tax free, as Fred Khalil, Gino Cassaniti, Peter Abboud and George Khalil determined.

26. [1283]

    Finally, it is noted that, at T 666.29, Andre Abou-Anton agreed that they (Fred Khalil and Peter Abboud) said to him that a 2.5% fee (paid to Banq) was great value relative to the tax benefits that his companies would be receiving (which the plaintiffs say was an understatement). I interpose to note that Andre Abou-Antoun agreed that during the ATO interview he agreed to that proposition but he resiled from that answer during cross-examination, saying that the answer was not true and that he “can’t remember if [he] understood [the] question at the time” (T 666-667). As stated above, I treat Andre Abou-Antoun’s evidence with no little degree of caution.

27. [1284]

    The plaintiffs refer to the winding up of Zagoonda on 5 January 2010 and note that the Form 484, purportedly dated 15 December 2008, which had the effect of changing the composition of the directors of Zagoonda from that date, was lodged by Fred Khalil on 27 October 2009 (Ex S at 15-23). It is said that this is an example of the conspirator backdated corporate changes.

28. [1285]

    The plaintiffs also refer to the creditor’s voluntary winding up on 20 December 2011 of Banq Accountants (with a debt of $459,810.05 owing to the ATO). The plaintiffs say that it is to be inferred, as a matter of credit against the Primary Conspirators and also against Ivana Cassaniti, that they regarded it as a normal event of conducting business not to pay tax, and that to rid themselves of that obligation at any time they could just wind the company up, have a slight name change and continue business as before. It is submitted that this was dishonest.

29. [1286]

    The plaintiffs point to Fred Khalil’s affidavit evidence as to his role in preparing the liquidation documents, obtaining creditors’ proxies and attending the creditors’ meetings.

30. [1287]

    The plaintiffs say that, in every case, Banq lodged a proof of debt in the liquidations of the Insolvent Companies (Table D). In the liquidations of RCG CBD and Earth Civil, the amount claimed in the proof of debt was $65,000; in Bluemine and Diamondwish the proof of debt amount was $20,000; and in Rackforce it was $100,000. Again, it is said that the coincidence of the rounded sums claimed by the same creditor in each of the liquidations of the Insolvent Companies can only be explained by reason of the existence of the Scheme.

31. [1288]

    The plaintiffs contend that it is to be inferred from all of the conduct referred to above involving Fred Khalil that he was a Primary Conspirator. It is said that it can comfortably be concluded that the conduct occurred, and was orchestrated and implemented by Gino Cassaniti, Fred Khalil, Peter Abboud and George Khalil in furtherance of the Scheme with Fred Khalil’s knowledge.

32. [1289]

    As noted above, each of Fred Khalil and George Khalil is identified by the plaintiffs as a Primary Conspirator in each of the Proceedings; George Said is identified as a Scheme Participant in the Bluemine and RCG CBD Proceedings only.

33. [1290]

    It is submitted that the necessary implication of these transactions is that the first leg of the impugned transactions (i.e., the payment of moneys in respect of false invoices) would not have occurred but for the assurance of the second leg of the impugned transactions (i.e., the payments out of the said moneys to the company or person associated with the paying company).

34. [1291]

    Insofar as the advantage said to have been promoted in each case by the Primary Conspirators to the paying company (i.e., the company to whom the first invoice was rendered) was the availability of a tax deduction and a claim for GST credits for the payments made to the Insolvent Company (presumably, it is said, supported by the false or inflated invoices received by the paying company from the Insolvent Company), the Khalil defendants say that there is no mention by the plaintiffs of the likely tax effect of receipt of those moneys in the hands of the subsequent recipient. It is said that it would be reasonable to expect that those receipts would in all probability be included in the assessable income of the ultimate recipient, whether characterised as having been received on capital or revenue account (and that, if not brought to account as assessable income, there is a net loss to the Revenue as a consequence of the deduction claimed by the paying company).

35. [1292]

    It is submitted by the Khalil defendants that there is nothing intrinsically dishonest or deceptive in the making of payments by the Paying Participants to the Insolvent Companies (or by the Insolvent Companies to the ultimate recipient) even in the absence of a commercial explanation for the payments; and that transactions which are not “commercial” are not, on that fact alone, unlawful.

36. [1293]

    The Khalil defendants say that it is when the paying company claims from the Commissioner a deduction against its assessable income for the amount paid to the Insolvent Company, that an issue arises; namely, that a representation is then being made to the Commissioner which effects the paying company’s liability to income tax for the year in which the deduction is claimed (and similarly, that if a credit for GST paid is also claimed there is a further such representation). The Khalil defendants accepted that it would be unlawful for the ultimate recipient to fail to disclose the receipts. They note that the alleged benefit to the Insolvent Company, in this scenario, is a fee taken between the receipt from the paying company and the payment out to the ultimate recipient.

37. [1294]

    Insofar as the pleaded claim includes an alternative of the Scheme that encompasses the issue of invoices by the Insolvent Companies at “inflated prices” for the provision of goods and services, the Khalil defendants say that this does not sit well with the plaintiffs’ allegation that the sole reason for the existence of the Insolvent Companies was the receipt and payment of funds (and not the supply of goods or services and that they never carried on any genuine business). In this regard, the Khalil defendants suggest that insofar as the plaintiffs maintain that in the majority, if not all, of the transactions there were no goods or services provided then the reference to “inflated” prices is redundant.

38. [1295]

    The Khalil defendants say that the further implication of inflated prices is that the return of the funds albeit to another party, presumably by way of direction, is effectively a rebate of the amount charged which would affect the value of the deduction or be required to be returned as assessable income of the paying company.

39. [1296]

    The Khalil defendants say that if the invoice is false, to the extent that it does not reflect a deductible expense, then the paying company has misrepresented its tax position to the Commissioner, and has understated its taxable income; and that, by issuing the invoice, the Insolvent Company has assisted the paying company in that conduct, if the invoice does not reflect a genuine expense to the paying company.

40. [1297]

    As to the defendant witnesses who were called in the plaintiffs’ case, the Khalil defendants say that (apart from Andrew Barsa), as Scheme Participants, those witnesses have a clear interest in the outcome of the Proceedings (in their exposure to liability for breaches of fiduciary duty if the allegations of a dishonest and fraudulent design are made good). It is said that, in the circumstances, there is little which those defendant witnesses could say to deny participation in the transactions between their companies and the Insolvent Companies, and that the only way to minimise their exposure to liability was (as they did) to deny knowledge of the circumstances of the alleged dishonest or fraudulent design.

41. [1298]

    Turning then to Fred Khalil’s position, the Khalil defendants say that, although at the time of the relevant events he was the sole formal director and secretary of Banq, holding 30% of its shares, he was not the only principal in the business of Banq providing accounting and tax advice to Banq’s clients (a proposition which, as evident from the conclusion I have reached above in relation to Gino Cassaniti, I accept).

42. [1299]

    It is also accepted by the Khalil defendants that Fred Khalil acted as a senior accountant in the business of Banq and handled day to day activities of the accounting business of Banq. However, the Khalil defendants point to Fred Khalil’s evidence that Gino Cassaniti and Ivana Cassaniti were also involved in the management and supervision of Banq’s staff in the conduct of the business (see Fred Khalil’s affidavit sworn 25 March 2019 at [24]). It is said (and again I accept) that Gino Cassaniti continued to play an important managerial role as a partner in the business of Banq, notwithstanding his bankruptcy (see Fred Khalil’s affidavit sworn 25 March 2019 at [30]).

43. [1300]

    Further, while it is accepted by the Khalil defendants that, as a registered tax agent, Fred Khalil carried out the supervisory arrangements in that element of Banq’s business (and, by holding the sole directorship of Banq, it was only Fred Khalil who was required to meet the standards of propriety required by the Tax Practitioners Board for registration of Banq itself as a tax agent), the Khalil defendants say that it is incorrect for the plaintiffs to assert (by reference to the responsibilities of a registered tax agent in lodging income tax returns and BAS returns with the Commissioner) that Fred Khalil was “responsible” for any information in documents lodged with the Commissioner of Taxation being “true and correct” (see plaintiffs’ submission at [644]-[645]). The Khalil defendants say that this assertion is incorrect and overstates the responsibilities of a tax agent as set out in s 30.10 of the Tax Agent Services Act.

44. [1301]

    It is noted that s 30.10(9) of the Tax Agent Services Act requires a registered tax agent to take reasonable care in ascertaining a client’s state of affairs, to the extent relevant to a statement being made or thing being done by the agent on behalf of the client. The Khalil defendants point to s 50.30 of the Tax Agent Services Act (which prohibits a tax agent in the course of providing a “tax agent service” from signing a declaration or other statement required or permitted by taxation law if the document in question was not prepared by the agent, another tax agent or someone working under the control and supervision of a tax agent), noting that “tax agent service” is defined in s 90.5 of the Tax Agent Services Act; and they refer to s 388-70 in Schedule 1 to the Taxation Administration Act (which provides in relation to a return, notice, statement application or other document given to the Commissioner by an agent on behalf of another, that the agent must make a declaration as required by the document stating that: the document has been prepared in accordance with the information supplied by the other entity; the agent has received a declaration from the other entity stating that the information provided to the agent is true and correct; and the agent is authorised by the other entity to give the document to the Commissioner).

45. [1302]

    The Khalil defendants say that the requirement that the client (on behalf of whom the agent is making the declaration in the lodged documents) provide a declaration that the information is true and correct is plainly intended to satisfy the tax agent’s obligation in s 30.10(9) of the Tax Agent Services Act; and that it is the client who is responsible for the information provided to the tax agent (on the veracity of which the tax agent ultimately relies).

46. [1303]

    The Khalil defendants say that knowledge on the part of the tax agent of the veracity or otherwise of the information provided by the client cannot be inferred simply by reason of the standard generally imposed upon tax agents.

47. [1304]

    Turning then to the particular impugned transactions, the Khalil defendants say as follows.

48. [1305]

    The Khalil defendants say that Tanya Borg’s evidence concerning the initial advice given to her (and to Michael Borg) is uncontroversial and well within the usual ambit of modern accounting and business advice (which it is said would include assistance with matters such as workers’ compensation, audits, client audits, industry contacts, payroll tax and the “outsourcing” for contract workers to be engaged). (I accept that general submission to an extent but note that it does not encompass the invoicing aspects of advice given to at least some of the Banq clients.)

49. [1306]

    The Khalil defendants say that, where an accounting firm advises of the adoption of a fresh corporate structure, it is likely (and cannot be controversial) that the companies would be obtained by the accountants and would have the accountants’ address as the registered office of the new companies. As indicated above, I accept this as a general proposition. Furthermore, it is said (and again, as a general proposition I would accept) that the promotion by accountants in the same firm of a particular structure among a number of their clients is also uncontroversial. The Khalil defendants say (and I accept) that it does not follow (from the fact that a particular structure has been adopted by a number of the firm’s clients) that, if one or more clients engage in transactions which are tainted for some reason, then the other clients adopted that structure in order to carry out like transactions.

50. [1307]

    The Khalil defendants say that the advice given by Fred Khalil in the case of the Borg transactions, i.e., that assets should be transferred from one entity, which the Khalil defendants say had presumably become obsolete (a proposition with which the plaintiffs cavil on the basis that there is no evidence to support a submission that Excavation had become obsolete), to another entity associated with the Borg entities; and that, for the purpose of the transfer of assets (a capital transaction), a valuation should be obtained of the assets to be transferred (noting that such a valuation was in fact obtained) (see T 1324.22-33; and the Hymans Report, Ex 20, Tab 9) is advice consistent with the transfer of depreciable assets between parties not operating at “arm’s length” (in order, it is said, to establish an “arm’s length” price that might be accepted by the Commissioner as a proper value in the books of the transferee entity).

51. [1308]

    It is said that there are a variety of reasons for obtaining a valuation which are commercially explicable but, relevantly, that it is inconsistent with a scheme involving false or artificially inflated invoiced prices that assets would be transferred based upon an arm’s length valuation. It is further submitted that the proposal adopted by the Borgs that the assets be transferred to the Borg transferee entity through RCG CBD (an “ostensibly arm’s length” company), is also consistent with a strategy of reinforcing an arm’s length value for the transferee.

52. [1309]

    The Khalil defendants (referring to the plaintiffs’ submission at [662]) say that whether or not Tanya Borg could give an explanation as to why “Excavation” was not paid directly for the transfer of the assets (or why there needed to be an intermediary for the transaction to occur) is beside the point; rather, that whether this is a Scheme transaction depends on whether a tax deduction was claimed for the payments made by the Borg transferor to RCG CBD. It is asserted (by reference to the plaintiffs’ submissions at [664]) that the plaintiffs are well aware that the transactions were on capital account and that a tax deduction was not claimed by the transferor.

53. [1310]

    The Khalil defendants say that, whether or not Tanya Borg is accepted to be a witness of truth, the absence of evidence of an explanation (where the transactions actually undertaken were evidently different from those detailed in [148] of the RCG CBD third further amended statement of claim) cannot support an inference that the alleged representations were ever made by Fred Khalil to the Borgs.

54. [1311]

    It is said that the plaintiffs’ submission (at [665]) (that the advice to transfer the business assets through RCG CBD is essentially the same as that given to other clients of Banq) is incorrect. It is noted that the two fundamental premises of the plaintiffs’ case are that the Scheme operated by providing the Paying Participants with evidence of an expense on revenue account for which they could claim a tax deduction, for a service which was illusory or minimal compared with the invoiced cost; whereas the Borg transactions appear to be on a capital account and related to assets which have a real value. (It is again noted that the plaintiffs point to no evidence of a tax deduction being claimed by the Borg transferor or paying entity).

55. [1312]

    Whether or not the Borg transactions “suffer from a degree of apparent artificiality”, the Khalil defendants say that it is plain that they differ from the plaintiffs’ asserted version of the facts. The Khalil defendants say that the plaintiffs’ submissions (at [665] and [666]) overstate the case; that these are not transactions with no subject matter which has no real intrinsic value; and that the fact that the transfers of assets through RCG CBD have a tax effect (which may be a reason they were undertaken in this manner) does not mean that they were not genuine.

56. [1313]

    The Khalil defendants say that what is evident, from the material relied upon by the plaintiff in its submissions concerning Fred Khalil, is that the only direct and explicit evidence of the advice which he gave to clients of Banq, with regard to any transactions with the Insolvent Companies (i.e., the advice given to the Borg Parties), was not consistent with the allegations against him of promoting or assisting in implementing a fraudulent and dishonest breach of fiduciary duty owed to RCG CBD.

57. [1314]

    Pausing here, in relation to the advice given to the Borg Parties by Fred Khalil, I accept that the impugned transactions (whatever may have been the intention at the time the advice was given) do not fit consistently with the alleged Scheme in that there is at least an argument that RCG CBD was interposed in the transaction in order to reinforce the arms’ length nature of the transaction (but see the plaintiffs’ submissions in reply on this issue).

58. [1315]

    The Khalil defendants point out that the plaintiffs, in their submissions, assert that it was Gino Cassaniti who advised Elias Nassar, in connection with the Scheme (see at [667]). The Khalil defendants say that the plaintiffs do not point to any evidence of involvement by Fred Khalil in the affairs of the Wenman Parties other than the signing and lodging of BAS returns and income tax returns on behalf of the Wenman Parties ([671]).

59. [1316]

    The Khalil defendants accept that Fred Khalil’s declaration is that the information was supplied by the director, who also gave a declaration, was true and correct. However, it is said that it does not follow from that proposition that Fred Khalil knew that the returns were false; nor, in the absence of any other clear evidence, can it be inferred from the evidence referred to and relied upon by the plaintiffs that he was aware of the circumstances which constituted the dishonest and fraudulent design of the fiduciary.

60. [1317]

    The Khalil Parties note that Banq provided general accounting and financial services to the Statewide companies for a number of years and it is accepted that the accountants at Banq had access to the books of the Statewide group. The Khalil defendants do not appear to cavil with Mario Sande’s evidence that he dealt with Gino Cassaniti, Fred Khalil and Peter Abboud over the years but they point out that Mario Sande was unable to say from whom at Banq he had received the advice that moneys could legitimately be channelled “from company A to company B”. It is said (and I accept) that Mario Sande’s recollection of the advice was “vague to say the least” (see at T 776.5).

61. [1318]

    The Khalil defendants say that, given the involvement of Banq as the accountants of the Statewide group, and the regularity with which Mario Sande saw the accountants over the years, it is explicable that Mario Sande would not recall who it was who gave him any particular advice (even though in this instance the ramifications of the advice have proven to be long-lasting and damaging).

62. [1319]

    It is submitted that (for the reasons submitted by the Khalil defendants in relation to the Borg transactions) the advice given by Fred Khalil to the Borgs is not “essentially the same advice” which it is asserted was given to Mario Sande (cf [676] of the plaintiffs’ submissions).

63. [1320]

    Again, it is said that the only submission directed by the plaintiffs squarely at Fred Khalil (at [688] and [690]) is that he must have known “the true explanation for the transactions”, because he was the person who lodged the companies’ tax returns and the like; and the Khalil defendants submit that this allegation is premised on the (incorrect) assumption that a tax agent audits and vouches the veracity of the information provided by the client included in the client’s tax returns.

64. [1321]

    As to Reliance Cleaning, the Khalil defendants say that the evidence of Fred Khalil referred to in the plaintiffs’ submissions at [692] is (albeit less than clear) an explanation to officers of the ATO of the respective roles of different companies and how employees in the various businesses were paid; and that it does not assist the plaintiffs’ case against Fred Khalil (cf [693] of the plaintiffs’ submissions).

65. [1322]

    The Khalil defendants say that there are two fundamental problems with the evidence of Andre Abou-Antoun: first, that it is likely largely based upon what he has told by his brother Michael but presented as his own (see T 679.21-680.42); and, second (and more significantly for Fred Khalil), that Andre Abou-Antoun now says that the advice that he was given was given to him by Peter Abboud and Fred Khalil.

66. [1323]

    The Khalil defendants agree with the plaintiffs’ submissions (at [703]) to the effect that the evidence given by Andre Abou-Antoun that it was Peter Abboud and Fred Khalil who had advised “us” that they had a company which owned trucks and tipping sites and could arrange exaggerated invoices for a fee, was significant (it being the only evidence that directly links Peter Abboud and Fred Khalil in promoting the Scheme in relation to Bluemine). However, the Khalil defendants say that this evidence is probably untrue.

67. [1324]

    It is noted that all of the significant features of the plaintiffs’ version of the Scheme were put to Andre Abou-Antoun in cross-examination by Senior Counsel for the plaintiffs and that Andre Abou-Antoun denied any prior knowledge of each relevant fact (T 705.22-706.14).

68. [1325]

    The Khalil defendants say that it is clear from the transcript of his evidence when questioned by the ATO that Andre Abou-Antoun considered himself under significant pressure (and they submit that this was also the case when he was giving his evidence in Court). They argue that this may explain the quality of his evidence.

69. [1326]

    The Khalil defendants place emphasis, in connection with the accusation made against Peter Abboud and Fred Khalil of promoting the Scheme, on the December 2017 correspondence between Andre Abou-Antoun (and his later accountants and advisers, PwC) and the ATO. It is said that this was in circumstances where Andre Abou-Antoun was under far less pressure to “get the story straight” (T 745.22-29), pointing out that Andre Abou-Antoun acknowledged in Court that the information contained in the correspondence with the ATO was based upon his knowledge and the records of the AKA Group (T 745.3-9).

70. [1327]

    It is noted that, in the 31 December 2017 correspondence to the ATO, and accompanying answers to requisitions, Andre Abou-Antoun blamed the AKA parties’ difficulties on Banq and, in particular, Gino Cassaniti. The Khalil defendants emphasise that this correspondence was written after Andre Abou-Antoun had sought advice from a number of different advisors (including two solicitors and at least one other accountant) (see T 738.45, T 739.21). The Khalil defendants place weight on the fact that the only individual named in the responses to requisitions in connection with the work done by Banq was Gino Cassaniti. The Khalil defendants say that this is not a slip. They say that this correspondence (given its timing, its evident purpose and the fact that it was against the background that advice had been take from various professionals other than the accountants at Banq) is evidence which should weigh against accepting Andre Abou-Antoun’s evidence in the present Proceedings as to the person with whom he dealt in relation to the transactions with Earth Civil (of which company it is noted that Michael Abou-Antoun, not Andre Abou-Antoun, was a director).

71. [1328]

    It is submitted that, in light of the conflict in the evidence between who gave what advice and when, and the fact that Andre Abou-Antoun now denies that he ever had any knowledge of the matters the subject of that advice, no weight can be given to his assertion that it was Peter Abboud and Fred Khalil who gave explicit advice in relation to the Scheme.

72. [1329]

    As to the evidence relied upon by the plaintiffs in connection with the advice given to the Criniti companies, the Khalil defendants say that this all concerns Gino Cassaniti alone. They say that it is incorrect to suggest (cf [727] of the plaintiffs’ submissions) that the advice given by Gino Cassaniti is consistent with advice given by Peter Abboud and Fred Khalil and would not have been given to separate clients if there were not some conspiracy; and that this confuses the nature of the advice which might have been given to each client.

73. [1330]

    It is said that Frank Criniti’s evidence directly associating Fred Khalil with the Criniti companies is limited to what was essentially the everyday accounting work required by the Criniti companies and the formalities of the re-structuring. The Khalil defendants say that the plaintiffs rely upon evidence that instructions for all the transactions were given always by Gino Cassaniti (see plaintiffs’ submissions at [734]); and that, in relation to Fred Khalil, what reliance is placed on, ultimately, is the preparation of BASs and income tax returns for the group by Fred Khalil (the Khalil defendants here restating their submission that a tax agent is not responsible for the veracity of the information provided by the client in the preparation of the relevant documents to be lodged with the Commissioner).

74. [1331]

    Thus, the Khalil defendants say that the allegations against Fred Khalil, based on a propounded inference to be drawn from his position as a tax agent are misconceived; and that evidence as to the advice given to the Borg Parties is so equivocal as to be of no probative value (referring to the evidence of Andre Abou-Antoun). It is said that none of the evidence upon which the plaintiffs have relied, taken individually or together, demonstrates in any significant degree conduct of Fred Khalil which amounts to assistance in a breach of fiduciary duty owed by Gino Cassaniti to any of the plaintiffs; nor does it demonstrate any one of the degrees of Baden Delvaux knowledge required to establish knowing assistance within the meaning of the second limb of Barnes v Addy. It is further said that there is no evidence that, without the involvement of Fred Khalil, the breaches of fiduciary duty would not have occurred nor the alleged loss suffered by the plaintiffs; and that, to the extent that there is evidence inferring knowledge or participation in the Scheme or the conspiracy, it does not rise above conjecture.

75. [1332]

    The plaintiffs accept that the relevant responsibilities of a tax agent are as set out in s 30.10 of the Tax Agents Services Act, namely, to act honestly and with integrity and not knowingly to obstruct the proper administration of the taxation laws. However, it is said that a tax agent’s duty goes beyond being “merely a mouthpiece for the client”. It is noted that s 50.20 of the Tax Agents Services Act makes it an offence to: make a statement to the Commissioner or prepare a statement which it is known is likely to be made to the Commissioner by an entity where it is known (or the maker is reckless as to whether) the statement is false, incorrect or misleading in a material particular, or omits any matter or thing without which the statement is misleading in a material respect. Accordingly, in the plaintiffs’ submission, it is not open to a tax agent to seek to hide behind the cloak of the client in this regard, especially where (as they say is here the case) Banq, Fred Khalil and the other Primary Conspirators inserted themselves completely into the business and affairs of their clients (such as the Criniti’s, the Borg Parties and the AKA Parties), such that the plaintiffs submit that their client’s information was their information.

76. [1333]

    The plaintiffs say that there is no factual basis (and no factual basis which would support any such inference) for the following submissions made by the Khalil defendants: that Fred Khalil advised Tanya and Michael Borg that assets should be transferred from Excavation to Borg Family because Excavation had become obsolete (cf [96] of the Khalil defendants’ submissions); that a valuation was obtained so as to establish an arms length price which might be accepted by the Commissioner of Taxation as a proper value in the books of Borg Family for the assets transferred (cf [97] of the Khalil defendants’ submissions); that the proposal adopted by Tanya and Michael Borg that the assets be transferred to the Borg Family through RCG CBD is consistent with a strategy of reinforcing an arms length value for Borg Family (cf [98] of the Khalil defendants’ submissions); and that Andre Abou-Antoun’s evidence to the ATO during the course of an interview with them was untrue (cf [115]; [117] of the Khalil defendants’ submissions).

77. [1334]

    Further, the plaintiffs say that the following submissions by the Khalil defendants should not be accepted in the face of the evidence against them: that, as the transactions were on a capital account and not in respect of a revenue account, no tax deduction was claimed by the Borg Parties in respect to the impugned transactions; that the evidence is unequivocal that Borg Family claimed depreciation for equipment it obtained from Excavation (in circumstances where the plaintiffs say it did not pay for that equipment and therefore had no basis to claim depreciation); and that the Borg transactions do not suffer from a degree of apparent artificiality. The plaintiffs maintain their submission as to the apparent artificiality of the transactions in circumstances where payments were made to RCG CBD by Borg Family and then returned to Borg Family, in exchange for which it acquired equipment from Excavation, without any real explanation for any of those transactions.

78. [1335]

    The plaintiffs say that further submissions not supported by the evidence are: in respect of the Wenman and Statewide Parties, that there is no evidence that Fred Khalil knew that the BAS and the tax returns which were lodged were false and that there is no doubt that Peter Abboud was the instrument by which the false invoices to the Wenman and Statewide Parties were sent. The plaintiffs point to Peter Abboud’s evidence that he was the first point of contact and would send emails, call and occasionally meet clients in person to get documents or pick up files; that he would also prepare the BAS, financial statements and tax returns to be checked by either Gino Cassaniti or Fred Khalil and that, except for basic administrative tasks, all of the work that he performed he did on the instruction of Gino Cassaniti or Fred Khalil (see Peter Abboud’s affidavit sworn 22 March 2019 at [28]-[30]). The plaintiffs say that Fred Khalil knew that the books and records of those companies, insofar as they were based on the false invoices that had been issued to them by Peter Abboud or Banq, were likewise false.

79. [1336]

    Finally, other submissions by the Khalil defendants that the plaintiffs say are contrary to the evidence are, first, that Andre Abou-Antoun’s evidence (that it was Peter Abboud and Fred Khalil who advised, in respect to Bluemine, that they had a company which owned trucks and a tipping site and could arrange false or exaggerated invoices for a fee) and the information he provided to the ATO in a letter from PwC in December 2017 should be preferred over the evidence that Andre Abou-Antoun gave to the ATO at the interviews on May and July 2018; and, second, in respect to the evidence of Frank Criniti, that there is no evidence that, without the involvement of Fred Khalil, the breaches of fiduciary duty would not have occurred nor the alleged loss.

80. [1337]

    As to the first, the plaintiffs maintain that it is clear from the ATO interviews that the information Andre Abou-Antoun provided to PwC was false; noting that Bluemine did not provide to the AKA Parties the services that were described in the invoices (and the plaintiffs say that Andre Abou-Antoun knew that as did Peter Abboud and Fred Khalil). The plaintiffs say that Fred Khalil knew that the books and records of the AKA Parties, insofar as they were based on the false invoices that had been issued to them, were likewise false.

81. [1338]

    As to the second, the plaintiffs say that the question is whether Fred Khalil was a party to the breaches and/or involved in the breach within the meaning of s 79 of the Corporations Act. It is submitted that the plaintiffs’ evidence establishes that Fred Khalil was knowingly concerned in the breaches of duty; and it is said that Frank Criniti’s evidence was not impugned and he was a witness of truth.

82. [1339]

    As to loss and causation, with which I deal in due course, the Khalil defendants adopt the submissions made on behalf of the AKA Parties (see at [1995]).

83. [1340]

    There is no dispute that Fred Khalil was at the relevant times the sole de jure director of Banq (as per the ASIC records) and that he acted as an adviser and accountant at Banq, handling the day to day activities of the accounts of Banq’s clients.

84. [1341]

    As to Fred Khalil’s role as a registered tax agent, I do not understand the plaintiffs ultimately to suggest that he was “responsible” for the truth and correctness of information in the tax returns in the sense that he had a duty to ensure its truth. Rather, as I understand it, the plaintiffs point to his obligations (including his obligation not knowingly to mislead the Commissioner) as leading to the inference that he must have made himself aware of the relevant information of the client in order to be in a position to make the declarations that he did (which would surely be the case if, as a tax agent, Fred Khalil was performing his obligations honestly and diligently – and he does not here contend that he was not). Further, they rely on Banq’s involvement (and, through it, Fred Khalil’s involvement) in the “business and affairs” of its clients for an inference that Fred Khalil had the relevant client’s information.

85. [1342]

    As to Fred Khalil’s involvement in the Scheme, there is evidence (which I accept) of Tanya Borg as to the advice given by Fred Khalil in relation to the incorporation of Borg Family and Borg Civil. I accept that the structuring advice per se does not bespeak fraudulent or dishonest conduct and that there was an explanation given (from her perspective) for the payments insofar as they related to the transfer of ownership of the equipment from Excavation to Borg Family. I accept the submissions for the Khalil Parties to the effect that the Borg Parties’ impugned transactions were of a different character from the transactions involving other Scheme Participants; and that there is evidence that would support the conclusion that there was a loan to Excavation in relation to the equipment and that the purpose of the invoices in question was to record this. Moreover, I consider that it is not insignificant that an independent valuation of the equipment was obtained.

86. [1343]

    Whether or not there was a view that Excavation was obsolete and that that was the purpose for its winding up, seem to me matters that are not to the point. It is clear that what was being put in place was a means to record the transfer of the equipment and the repayment of the moneys that it is said were initially advanced to the company by Michael Borg. The fact that Tanya Borg did not fully understand the effect of the advice does not mean that there was not a reasonable basis for her to assume that this was an appropriate means of accounting for the transaction (as I consider in due course when considering the claims against the Borg Parties).

87. [1344]

    I accept that there seems to be no reason for there not simply to have been a forgiveness of the debt to Michael Borg; and that the arrangement has a degree of artificiality in this regard. I accept that the fact that a transaction might have been structured in a tax effective way (or that Banq or associated companies may have obtained a benefit in the form of a payment or fee for that) would not of itself bespeak dishonesty. However, to the extent that the transaction involved the incurring of tax liabilities that otherwise would not have been incurred, this would give rise to questions as to breach of directors’ duties (which, as I apprehend it, is the thrust of the plaintiffs’ complaint in relation to at least some of the transactions). I accept that there is a dispute as to the evidence of any tax benefit received by the Borg Parties as a result of the transaction (having regard to its accounting on an accruals basis) but that does not mean that the transaction was not one that was not in the interests of the Insolvent Company there involved.

88. [1345]

    Ultimately, the difficulty I have with the question of Fred Khalil’s liability for involvement in the Borg Parties’ impugned transactions is that the arrangement (albeit that it may be accepted that this was to record the basis on which the equipment was transferred from Excavation to Borg Family) is that it involved what would seem to have been an unnecessary tax exposure for the Insolvent Company (and the interposition of RCG CBD in this regard seems to have been unnecessary) – matters of which he must have been aware at the time.

89. [1346]

    As to the Wenman and Statewide transactions, I accept that Elias Nassar’s evidence squarely implicates Gino Cassaniti in relation to the Wenman transactions (not Fred Khalil) and that Mario Sande’s evidence is not conclusive as to who he was dealing with at Banq. However, I note that Peter Abboud’s evidence is that Fred Khalil checked all his work – and that seems to me not to be implausible given Peter Abboud’s far more junior role in Banq at the time (and is consistent with the evidence from others). Therefore, I accept the submissions for the plaintiffs that it should be inferred that, in the course of his work in overseeing Peter Abboud, Fred Khalil must have known that the invoicing was false insofar as the services described in the invoices were not being provided; and hence, he was on notice of the dishonesty of the Scheme in that regard.

90. [1347]

    As to Reliance Cleaning, I accept that there is a timing issue as to when Andre Abou-Antoun became aware of certain matters but that does not address the fact that in his ATO interview he made clear that he was giving his evidence at that time to the best of his memory of events as at the relevant time. I accept that it is likely that the advice as to the structuring of the companies was conveyed to him by Michael Abou-Antoun (since his answer to that effect seemed genuine – i.e., when he said words to the effect “well he didn’t tell me anything”). As to the fact that the PwC letter to the ATO placed blame for the position on Gino Cassaniti (rather than anyone else at Banq), I do not accept that it follows from the fact that Andre Abou-Antoun may have been under less pressure at the time (even assuming that to be the case) that his recollection then should be preferred to his evidence before the ATO or in Court. As to the premise that he was under less pressure, I can well accept that it is stressful for witnesses to give evidence under interrogation or cross-examination under oath (and that the court room environment may be particularly stressful). However, that may well make it more likely that a witness’ recollection on oath will be more reliable than an answer to requisitions prepared in the less stressful environment of someone not on oath before an examiner. The fact that Andre Abou-Antoun might have been prepared (through his professional advisers) to cast the blame solely on Gino Cassaniti in an answer to requisitions does not mean that his later evidence on oath should be discounted.

91. [1348]

    As to the inconsistency in the evidence in relation to the role of RCG CBD and Reliance Cleaning, that seems to me to be telling – it illustrates the interchangeability of the various corporate entities. As to the belated provision of invoices from Reliance Cleaning and RC Group, in my opinion suspicion attaches to them not only because they were not produced when the liquidator first sought provision of documents but also (for the reasons submitted by the plaintiffs) having regard to the anomalies on the face of the documents (and the evidence of persons such as Elias Nassar and Mario Sande, and for that matter Andre Abou-Antoun himself, that no such services were provided). Given Fred Khalil’s role in Banq (and his appointment as proxy in the creditors’ voluntary liquidations) it is clear that he was implicated in this.

92. [1349]

    As to the Criniti Croup transactions, I accept that the initial structuring advice was given by Gino Cassaniti but it is clear that Fred Khalil was involved in the implementation of that advice.

93. [1350]

    Therefore, I find that Fred Khalil assisted in Gino Cassaniti’s breach of duties as director of RCG CBD, Bluemine and Earth Civil, and those of Frank Criniti as director of Diamondwish and Rackforce. Moreover, I find that Fred Khalil had knowledge of the facts giving rise to the breach of duties by Gino Cassaniti as director of RCG CBD, Bluemine and Earth Civil (and of the impugned Wenman Parties, Statewide parties, Reliance Cleaning and Bluemine transactions), as well as of the breach of duties of Frank Criniti of Diamondwish and Rackforce; and that those would have put an honest and reasonable person on notice of the dishonest and fraudulent design in relation to the impugned transactions (even though I accept that there was an underlying basis for the Earth Civil transactions involving the payments for the equipment transferred to Excavation). Thus, subject to the issues of causation and the joint release defences, I find that liability is established against Fred Khalil.

94. [1351]

    Claims of accessorial liability are brought against Kamikaze Teppanyaki and Sivasli in the RCG CBD Proceeding. Kamikaze Teppanyaki was characterised as a Paying Participant and Sivasli was characterised as a Receiving Participant (RCG CBD third further amended statement of claim at [140]-[141]). Both of these claims are brought on the basis that Fred Khalil was the sole director of each company at the relevant times (Ex K at 31902; 30250) and that they entered into the respective impugned transactions by arrangement with RCG CBD’s director, Gino Cassaniti.

95. [1352]

    From 19 December 2012 to 14 May 2013, RCG CBD made payments to Sivasli totalling $201,000. The plaintiffs note that Sivasli, in its defence filed in the Proceeding at [15], admits receiving the payments and particularises that the payments received were payments owed by the plaintiff and were paid to the defendant as directed. The plaintiffs say that Fred Khalil has not given or adduced any evidence in support of that pleading and that there is no evidence that RCG CBD "owed" Sivasli anything.

96. [1353]

    As to Kamikaze Teppanyaki, from 31 July 2012 to 21 May 2013, Kamikaze Teppanyaki made payments to RCG CBD totalling $364,656.20. At [33] of his affidavit, Fred Khalil attests that he earned $568,350 from Kamikaze Teppanyaki and that was paid from KTDH (the sole shareholder of Kamikaze Teppanyaki) to Sivasli (the sole shareholder of Sivasli is Fred Khalil). It is said that Fred Khalil's affidavit is again bereft of any explanation for the payments by Kamikaze Teppanyaki to RCG CBD. The plaintiffs note that all of the invoices provided by RCG CBD to Kamikaze Teppanyaki were described as being for “Labour Hire Services” (Ex K at 32004-32035).

97. [1354]

    Ultimately, the accessorial liability of Sivasli and Kamikaze Teppanyaki depends on whether Fred Khalil’s knowledge can be imputed to each of the companies. As to Sivasli, in the absence of any evidence that RCG CBD owed Sivasli the moneys that were transferred to it, it is clear that the receipt of $201,000 was to Sivasli’s benefit and in those circumstances, I find that Fred Khalil’s knowledge of Gino Cassaniti’s dishonest and fraudulent design should be attributed to Sivasli. I find that in receipt of the payments totalling $201,000, Sivasli assisted Gino Cassaniti in the implementation of the Scheme and thus, I find Sivasli accessorially liable for Gino Cassaniti’s breaches of fiduciary duty.

98. [1355]

    As to Kamikaze Teppanyaki, the payment of invoices is likely to be within the authority of the company’s director. However, there is nothing to indicate that the payment of $364,656.20 to RCG CBD in any way benefitted Kamikaze Teppanyaki. I was not taken to any evidence that Kamikaze Teppanyaki received the “Labour Hire Services” for which it was purportedly paying; nor of any GST credit or deduction claimed in its income tax returns. I find Fred Khalil’s use of Kamikaze Teppanyaki knowingly to assist Gino Cassaniti in his dishonest and fraudulent design was in fraud of Kamikaze Teppanyaki. Consequently, I do not find that Fred Khalil’s knowledge of Gino Cassaniti’s dishonest and fraudulent design is to be imputed to Kamikaze Teppanyaki.

Submissions and findings – Peter Abboud

1. [1356]

   Again, as with the other individual Primary Conspirators, the plaintiffs analyse the evidence in relation to Peter Abboud by reference to the same matters addressed above. His relationship with, and role in, Banq has already been considered (see above).

2. [1357]

   The plaintiffs say that Peter Abboud’s record of interview with the ATO (Ex 17) (see above) shows that, other than his involvement in banking transactions, Peter Abboud was involved in the business of Bluemine (see below).

3. [1358]

   In the period from 26 February 2013 to 6 August 2013, Bluemine made payments to Banq totalling $1,621,745.00 (Table 5.2).

4. [1359]

   On 25 June 2012, Banq paid $590,000 to Bluemine and on the same day, Bluemine paid $590,000 to Banq (see Table 5.1). Peter Abboud said this was for the purchase of trucks. The plaintiffs note that Peter Abboud acknowledged in his affidavit that he prepared the first BAS for Bluemine and that the first BAS involved the purported purchase of trucks by Bluemine, which involved the transfer of $590,000 between Bluemine and Banq. The plaintiffs say that, as a result of the payment in and the payment back, there was no cost to Bluemine for acquisition of the trucks, so that the BAS was false (to the knowledge of Peter Abboud). It is said that notwithstanding this, Bluemine’s BAS for the period ended 31 March 2012, prepared by Peter Abboud and signed off on by Fred Khalil records (falsely, the plaintiffs say) the $590,000 as a capital purchase with GST on purchases of $53,636.00 claimed (Ex K at 50706).

5. [1360]

   On 10 July 2012, Bluemine’s running balance account shows that it received a GST refund of $53,636.00 but the refund was paid into Banq’s account (Ex K at 55250). On 10 July 2012, Banq’s trust account (account number xxx-2546) records a credit of $53,636.00 with the description “ATO” (Ex S). The plaintiffs say from this that Banq immediately took the bulk of that GST refund for itself. On 10 July 2012, $36,636.00 was transferred out of Banq’s trust account into its Business Cheque Account leaving a balance of $17,000 in Banq’s trust account (Ex K at 34180). It is noted that, on 24 October 2016, as a result of the audit conducted in respect of Bluemine, the ATO disallowed the credit identified above and raised a liability of $53,636.00 on Bluemine’s running balance account (Ex K at 55253), which liability remains unpaid and forms part of the tax liability claimed as damage by the plaintiffs. The plaintiffs say that there can be no doubt that this was a calculated and dishonest transaction orchestrated by Peter Abboud, whereby Banq received $53,636 and Bluemine was left with an equivalent tax liability that it could not pay, as it is said was intended by Peter Abboud (and the other conspirators).

6. [1361]

   It is said that Peter Abboud knew that there was no lawful entitlement to a GST refund because it was based on a false BAS return, and he knew that the ATO had refunded Bluemine $53,636 on the basis of a purported Bluemine capital purchase which did not exist. It is said that Peter Abboud new and always intended that the $53,636 “refund” would be kept by Banq; that his conduct was calculated, dishonest and fraudulent; and that he deceived the ATO.

7. [1362]

   As to the purported Bluemine vehicle purchases, the plaintiffs say that Peter Abboud further utilised the assets of Bluemine to gain additional benefits for himself and those associated with him by: selling four of the vehicles the subject of the purported purchase from Jian Holdings to Multipower Tipper for $200,500, and transferring the fifth vehicle to Jola Holdings (of which Peter Abboud was the sole director at the time) for no consideration although it was purported it was sold for $100,000.

8. [1363]

   It is noted that the sale of the vehicles was not reported in the Bluemine BAS for the period from June to September 2012 (see Ex K at 51561-51562) and that GST was not remitted to the ATO. The plaintiffs say that all of this conduct was calculated and dishonest.

9. [1364]

   The plaintiffs attach significance to the fact that, prior to the vehicles being owned by Jian Holdings, four of the five vehicles were owned by Tepall which had its registered office as Banq; and that CAP Accounting (another Cassaniti entity) was its taxation agent.

10. [1365]

    It is noted that when the four vehicles were purchased (or purportedly purchased) by Jian Holdings from Tepall in October 2010, Jian Holdings (in the relevant BAS period) claimed a GST credit of $53,000; but that neither Tepall nor the Tepall Trust reported this sale nor remitted the GST collected from Jian Holdings of $53,000 to the ATO.

11. [1366]

    The plaintiffs say that the above conduct resulted in: a GST credit to Jian Holdings of $53,000, where Tepall did not remit the equivalent GST payable to the ATO; a GST credit to Bluemine of $53,636, where Jian Holdings did not remit the equivalent GST payable to the ATO; the sale of the vehicles to Multipower Tipper for $200,500, where Bluemine did not report the sale to the ATO and remit any GST; and the transfer of a vehicle from Bluemine to Jola Holdings (a Peter Abboud company at the time) for no consideration.

12. [1367]

    The plaintiffs say that this conduct is a paradigm example of the conspiracy in action where Bluemine was utilised to obtain tax benefits and other benefits to Peter Abboud and those associated with him (including the other conspirators). The plaintiffs say that this was calculated, dishonest and fraudulent conduct.

13. [1368]

    It is said that a strikingly similar purported sale and purchase of assets and resulting taxation benefits occurred involving RCG CBD, Borg Family and Excavation (see below); and that this was not a coincidence and could not have occurred in the absence of the conspiracy involving Gino Cassaniti, Fred Khalil, Peter Abboud and George Khalil.

14. [1369]

    Peter Abboud and Andrew Barsa were signatories to the Bluemine bank accounts (see Ex K at 51186-51187; Table E). Peter Abboud was a shareholder and bank account signatory of Banq’s bank accounts, together with Fred Khalil and Ivana Cassaniti. Peter Abboud (at [57] in his affidavit sworn 22 March 2019) asserts that he was made a bank account signatory so that he could process payments from the bank accounts as directed by Gino Cassaniti, Fred Khalil or Ivana Cassaniti.

15. [1370]

    The plaintiffs say that there has not been one commercial document produced by Banq with respect to payments made between Bluemine and Banq. The plaintiffs say that it is to be inferred that there was no commercial basis for any of those transactions. It is noted that an amount was retained by Bluemine as a fee to be paid on to Banq (or as otherwise directed by the conspirators), with respect to transactions involving Bluemine and some of the Scheme Participants. The plaintiffs say that it is to be inferred that some of the Bluemine/Banq transactions were in fact the fee for the benefit of the Primary Conspirators; and that it is to be inferred that Peter Abboud was involved in these transactions as a signatory of the Bluemine bank account, and shareholder and principal of Banq.

16. [1371]

    As to the Bluemine Thailand payments said to have been made to George Abboud, the plaintiffs submit that those transactions are yet other example of getting cash out of Bluemine and to Peter Abboud or to others associated with him, as Peter Abboud, Gino Cassaniti, Fred Khalil and George Khalil determined.

17. [1372]

    The plaintiffs say that Peter Abboud was involved in making the Scheme Recommendation along with Fred Khalil in relation to the AKA Parties’ involvement with Bluemine and Earth Civil which also resulted in cash withdrawals from Earth Civil, referring again to Andre Abou-Antoun’s evidence as to the change to the AKA Group structure (at T 624.8-16) and his evidence to the ATO (see above).

18. [1373]

    The plaintiffs say that the unchallenged evidence of Andre Abou-Antoun is that Peter Abboud (and Fred Khalil) recommended the Scheme involving Bluemine issuing false invoices and the structuring of the AKA Parties and related corporate entities. It is noted that this was virtually the same as the scheme recommended to the Criniti companies and the Borg Parties as to corporate structures, and to the Wenman and Statewide Parties, as to false invoices (in which Peter Abboud was directly involved – see further below). It is said that these events did not occur by innocent coincidence and would not have occurred in the absence of the conspiracy. The plaintiffs further submit that, in accordance with the advice from Peter Abboud, Banq arranged the incorporation of the AKA companies (see above).

19. [1374]

    The plaintiffs refer to Andre Abou-Antoun’s evidence as to this, noting, in particular, Banq’s remote access to the AKA companies’ MYOB (see T 623; T 734.28-32).

20. [1375]

    Again, reference is made to the payments made in and out of the AKA entities (see above). The plaintiffs rely on the description by Andre Abou-Antoun as to the arrangement with the AKA Parties and its implementation as demonstrative of Peter Abboud fulfilling his role in the conspiracy, and of the fact of the conspiracy.

21. [1376]

    It is said that Peter Abboud recommended the Scheme to the AKA Parties and was subsequently involved in and had knowledge of the payments between those parties and Bluemine and the 2.5% fee that would be retained by Banq and taxation and other benefits. It is noted that over the period from 6 December 2012 and 18 April 2013 there was a series of emails between parties including Peter Abboud, Komel Kohli and Andre Abou-Antoun in relation to payments between AKA Civil and AKA NSW, on the one hand, and Bluemine, on the other (see above).

22. [1377]

    The plaintiffs say that Peter Abboud knew of and orchestrated all payments between the AKA Parties and Bluemine where he was included in email correspondence in relation to half of the transactions, including on occasions where directions were made with respect to the return of money paid. It is noted that Peter Abboud sent a follow-up email in relation to those invoices. The plaintiffs say that Peter Abboud knew the invoices were false and that no services were provided by Bluemine; and that this was dishonest.

23. [1378]

    The plaintiffs say that, as a result of that direct involvement, and the matters referred to below, it is to be inferred that Peter Abboud knew of and orchestrated (with Fred Khalil, Gino Cassaniti and George Khalil) all of the transactions between Bluemine and the AKA Parties, and that he knew they were dishonest.

24. [1379]

    The plaintiffs refer to the evidence of Elias Nassar as well as the documentary evidence (such as the email from Peter Abboud to Brenda Louwen on 19 June 2013 – see above) in relation to transactions involving the Wenman Parties, namely that Gino Cassaniti oversaw anything that was done by Peter Abboud and to the invoice issued purportedly for “labour hire” (see above) from Bluemine to Ignite Promotions. It is noted that Elias Nassar’s evidence was that Bluemine did not provide any labour hire services to Ignite Promotions and that he understood Bluemine was from Banq Accountants. The plaintiffs say that Elias Nassar knew that the invoices were false and that Peter Abboud undoubtedly knew that the invoice issued by Bluemine to Wenman Brimak was false, that there were no services provided by Bluemine to Ignite Promotions, and that he and the other primary conspirators would benefit by way of the fee paid to Banq.

25. [1380]

    As to the payments made between 10 September 2012 to 30 May 2013 by RCG CBD to Banq (totalling $920,415) (see Table 3.2), the plaintiffs again point to the fact that Peter Abboud was a signatory to the Banq bank accounts; and that he was a recipient of the Banq profit with his 10% shareholding. The plaintiffs say that it is to be inferred that those payments could not possibly have been made to Banq without his knowledge and that there is no explanation for the rationale behind those transactions.

26. [1381]

    The plaintiffs point to Peter Abboud’s evidence in his interview with the ATO (Ex 17 at 56), where Peter Abboud was unable to explain why payments were made by RCG CBD to Banq in that period in the sum of $1.2 million, notwithstanding that Banq did accounting work for RCG CBD; and (at 57) where he agreed that the value of any work that Banq did for RCG CBD would be “nowhere near” the value of the payments made.

27. [1382]

    The plaintiffs say that, whenever the context suited them, the Primary Conspirators, verbally and in much of the documentation, contended that RCG CBD was a labour hire company (referring by way of example, to the affidavit sworn 25 March 2019 (at [19]) in which Fred Khalil attested that “Gino and I on behalf of Banq Advisors engaged RCG CBD Pty Ltd to provide accounting staff to Banq Advisors”), yet the plaintiffs point to other statements to the contrary (such as Peter Abboud’s email to the Office of State Revenue in June 2014 – see above; and Peter Abboud’s affidavit evidence (at [38] of his 22 March 2019 affidavit), to which I have referred earlier).

28. [1383]

    The plaintiffs say that the making of the payments from Banq to RCG CBD, and the issue of purported labour hire invoices from RCG CBD to Banq provided by Banq’s solicitors to the ATO in 2016 (see above), was a charade. It is said that, not only are those invoices now shown to be false (by the evidence of Peter Abboud himself), but that this also demonstrates that, in 2016, Peter Abboud was prepared to deceive the ATO (in the context, known to him, that the ATO was now investigating Banq). The plaintiffs point to this as demonstrating Peter Abboud’s dishonesty. (Pausing here, leaving aside the anomalies to which the plaintiffs point in relation to these invoices, the troubling aspect of the production of these invoices only in 2016 is that the liquidator had sought financial records some time earlier and no such invoices were produced at that stage, which gives rise to the inference that they were created after the event; that inference being reinforced by the anomalies in the invoices themselves.)

29. [1384]

    The plaintiffs say that it should be inferred that all of the invoices purportedly issued from RCG CBD to Reliance Cleaning, Kamikaze Teppanyaki (Darling Harbour) and Banq (all described as being for “Labour Hire Services”) and provided to the ATO by Brown Wright Stein in 2016 in answer to s 353-10 notices issued by the ATO (see chronology above) were false to the knowledge of each of Peter Abboud (a principal of Banq; and director of Reliance Cleaning); Gino Cassaniti (a principal of Banq; and director of RCG CBD); Fred Khalil (a principal of Banq); and George Khalil (controller of the RCG CBD bank account).

30. [1385]

    It is further noted by the plaintiffs that RCG CBD did not pay any GST to the ATO; rather, the company was wound up. The plaintiffs say that Peter Abboud obviously expected this; and that this was the “plan” with Gino Cassaniti, Fred Khalil and George Khalil. On the basis that George Khalil was the controller of the RCG CBD bank account, it is said that he knew about all of the RCG CBD and Banq transactions; similarly, it is said that as Gino Cassaniti was the director of RCG CBD he also knew about all of those transactions; and the plaintiffs say that Peter Abboud and Fred knowledge is to be inferred.

31. [1386]

    As to the payments between 31 December 2012 and 9 January 2013 by RCG CBD to LFC Holdings (totalling $52,020), the plaintiffs note that there is no explanation for those transactions; and that Peter Abboud (the sole director, secretary, shareholder and sole signatory to the bank account of LFC Holdings – see Table C) has produced no documents of these transactions and has not sought to explain the absence of documents nor has he sought to establish any entitlement to those funds (referencing his ATO interview, Ex 17). It is said that they were a distribution to him.

32. [1387]

    The plaintiffs say that this is yet another example of the Primary Conspirators incorporating companies whose supposed business activity was merely “invoicing” and corroborates their contention that LFC Holdings was “just another pawn in the scheme used to wash money into the hands of the primary conspirators or those associated with them”.

33. [1388]

    The plaintiffs say that it is clear from Peter Abboud’s inability to provide any coherent or sensible explanation for the payments to LFC Holdings, that LFC Holdings (a mere “invoicing” company) was a company through which Peter Abboud was obtaining or receiving payment of his share of the fees and funds flowing to the primary conspirators including Banq.

34. [1389]

    The plaintiffs say that it is to be inferred that Peter Abboud had knowledge of the payments by RCG CBD to LFC Holdings (together with the sole bank account signatory for RCG CBD, George Khalil), particularly in the absence of an explanation for a commercial basis for these transactions, coupled with Peter Abboud’s knowledge (to be inferred) that RCG CBD would be wound up in insolvency unable to pay its taxation obligations. It is submitted that the conduct of these transactions by Peter Abboud was dishonest.

35. [1390]

    While both Peter Abboud and Scott Crabbe were recorded as directors of Reliance Cleaning from its incorporation (see above), the plaintiffs say that it is to be inferred that Peter Abboud was the controlling director. They point to Scott Crabbe’s evidence (at T 945.1-21) that in late 2011 he became ill and subsequently in early 2012 he went to Fred Khalil and Peter Abboud and asked to be removed as a director. The plaintiffs say that it is revealing (as to the control of Reliance Cleaning) that Scott Crabbe, as a director, seemingly required the approval of Fred Khalil and Peter Abboud to resign (which did not occur). The signatories to the Reliance Cleaning bank accounts were Peter Abboud, Ivana Cassaniti and Fred Khalil (see Table E). Scott Crabbe, notwithstanding his directorship, was not a signatory to the bank account.

36. [1391]

    As to the 64 payments made by Reliance Cleaning to RCG CBD in the period from July 2012 to May 2013, totalling $1,618,254.35 (see Table 3.11), the plaintiffs point to the evidence given by Fred Khalil in his interview with the ATO (at [608] above) and note that there are no genuine commercial documents to explain the basis for those payments.

37. [1392]

    The plaintiffs also note that, in the period from 4 July 2013 to 21 February 2014, upon his appointment as liquidator of RCG CBD, the liquidator sent a number of requests for the books and records of RCG CBD to Gino Cassaniti, as the director of RCG CBD, Fred Khalil, as the former director of RCG CBD and Banq as the accountant for RCG CBD; and that no documents were provided other than a MYOB data file containing General Ledger and Employee PAYG summaries for the financial year ending 30 June 2013, and a Report as to Affairs completed by Gino Cassaniti.

38. [1393]

    The plaintiffs say that the invoices provided on 6 October 2016 by Brown Wright Stein Lawyers, in response to a s 353-10 notice issued by the ATO, purporting to be invoices from RCG CBD to Reliance Cleaning for labour hire services, were false (and were just created for appearance), for the following reasons.

39. [1394]

    First, the contradictory assertions from both Fred Khalil and Peter Abboud with respect to the business of RCG CBD and what it did, together with the convenience of the production of the purported invoices to the ATO in 2016 when no such records were produced to the liquidator in 2014. In particular, the plaintiffs note that: the registered office and principal place of business of Reliance Cleaning was Banq; Peter Abboud was the director of Reliance Cleaning and remained at Banq until March 2017; and, in respect of a number of s 353-10 notices issued by the ATO, Brown Wright Stein acted for Reliance Cleaning, RCG CBD, Kamikaze Teppanyaki and Banq. As to all of the RCG CBD to Reliance Cleaning invoices, it is noted that: the invoice number is the date in reverse, the contact details for RCG CBD are recorded as those of Banq, and the address on the invoice for Reliance Cleaning is the identical PO Box to that of Banq. It is said that these invoices were, in reality, Banq sending invoices to itself for purported labour hire services and were nothing more than an invention in 2016 to attempt to substantiate to the ATO payments made by Reliance Cleaning to RCG CBD.

40. [1395]

    Further, the plaintiffs say that, if those invoices were not false, then RCG CBD supposedly provided approximately $1.6 million in contracting services for Reliance Cleaning, yet there are no documents about any contract, arrangement or agreement of any kind in relation thereto. The plaintiffs say that the reality is that RCG CBD was never a labour hire company, nor was Reliance Cleaning. (I agree.)

41. [1396]

    It is noted that, for all of the amounts paid in to RCG CBD by Reliance Cleaning, RCG CBD did not pay any GST to the ATO and RCG CBD did not pay any PAYG to ATO. The plaintiffs say that the payments from Reliance to RCG CBD show, once again, that RCG CBD was being used by the Primary Conspirators as a bank account to wash money through, tax-free, for the benefit of entities and persons to whom RCG CBD had no obligation to pay.

42. [1397]

    As to the transactions entered into by the Wenman Parties with RCG CBD and Bluemine (see above and see Tables 3.3 and 5.1), the plaintiffs refer again to the evidence of Elias Nassar that Gino Cassaniti oversaw anything that was done by Peter Abboud in relation to transactions involving the Wenman Parties; and to the emails in December 2012 to January 2013 to and from Peter Abboud in relation to the invoices from RCG CBD to Ignite Promotions (see above).

43. [1398]

    The plaintiffs refer to two tax invoices (#03009124 and #0000107) from RCG CBD to Ignite Promotions dated 30 June 2012 and 30 September 2012 for the total sum of $710,868.18 that are both described as for “labour hire” (Ex K at 36323-36324). The plaintiffs submit that handwritten notations on the RCG CBD invoices match the invoices issued from Ignite Promotion to Blackrock Media for “Consulting”.

44. [1399]

    The plaintiffs point out that the email from Peter Abboud recommended a series of payments from Blackrock Media to Ignite Promotions to RCG CBD; and it is submitted that (reading the RCG CBD and Ignite Promotions invoices together) this is what occurred. The plaintiffs note that the evidence of Elias Nassar was that RCG CBD never provided labour hire services to Ignite Promotions and that Ignite Promotions never provided consulting services to Blackrock Media; and that he knew that the invoices were false.

45. [1400]

    It is said that, at the time Peter Abboud advised Elias Nassar to make the payments by way of the email, Peter Abboud also knew the respective services would not be provided; and that he also (as did Gino Cassaniti) knew that Banq would deduct a fee equivalent to the GST.

46. [1401]

    The plaintiffs refer again to the evidence of Mario Sande in relation to the transactions involving Statewide Parties to the effect that the payments were going around in a circle and that this was done as advised by Banq; and to the two emails from Peter Abboud to Mario Sande on 13 and 15 November 2012 with the subject “RCG CBD Invoices – Statewide Design” where Peter Abboud requested that Mario Sande make part payment “to start with”, those invoices apparently being for “Management fees” (see Ex K at 36381). Reference is also made to Mario Sande’s evidence (at T 779.29) to the effect that RCG CBD never provided any management services for State Wide Design.

47. [1402]

    The plaintiffs say that, if Mario Sande knew no management services were provided as set out on those RCG CBD invoices, then so did Peter Abboud. It is said that, in deliberately sending false invoices, Peter Abboud intended to create the dishonest impression of services provided for payment, which was not the truth.

48. [1403]

    It is noted that Mario Sande’s evidence was also that, in relation to the payments, Banq would retain a 10% fee. The plaintiffs say that, at the time that Peter Abboud advised Mario Sande to make the payments by way of the emails, he knew that there were no management services being provided by RCG CBD to the Statewide Parties and that Banq would deduct a 10% fee from those payments where Statewide would lodge BAS returns (including those GST amounts) with the ATO. It is said that Peter Abboud and Mario Sande knew that such GST component would not be forwarded by RCG CBD to the ATO. The plaintiffs say that this conduct is another example of Peter Abboud directing payments that he knew were dishonest (in furtherance of the conspiracy), involving the deployment of RCG CBD to defraud the Commonwealth; and that his conduct was both calculated and fraudulent.

49. [1404]

    The plaintiffs refer to Tanya Borg’s evidence (at [75] of her affidavit sworn 4 December 2018) that the backup file for MYOB was sent to Banq and that she understood that Banq made any changes or adjustments thought necessary; and to her evidence in her subsequent affidavit sworn on 20 February 2020 (at [13]) as to Banq’s regular access to Borg Civil and Borg Family’s MYOB (see above). The plaintiffs also refer to the email annexed to Tanya Borg’s 27 February 2020 affidavit (at 4) as evidencing that Tanya Borg was personally involved in communicating with Banq concerning the MYOB file of Borg Family.

50. [1405]

    The plaintiffs say that it is to be inferred that Peter Abboud knew of the Borg Party transactions and was involved in how these transactions were recorded in the Borg Family accounts, given his role at Banq, together with Fred Khalil, supervising and managing other accountants.

51. [1406]

    The plaintiffs again refer to the evidence from Frank Criniti as to the implementation by Banq of the systems that the Criniti companies utilised and the introduction by Banq to the Criniti companies of Tarun Shah who was subsequently employed within the Criniti companies; noting the evidence that Banq (including Peter Abboud) trained Tarun Shah.

52. [1407]

    The plaintiffs also refer to the evidence that Tarun Shah worked at Banq for a period after his employment at the Criniti companies, following an interview with Fred Khalil and Peter Abboud; and his role at Banq (see above). The plaintiffs say that the evidence of Tarun Shah in relation to the role of Peter Abboud at Banq is consistent with the evidence of Frank Criniti, Fred Khalil, Ivana Cassaniti, Gino Cassaniti, Elias Nassar and Mario Sande. It is submitted that the inference can be drawn that Peter Abboud had knowledge of the accounting treatment and taxation benefits of all transactions involved in the Scheme and the deployment of the Insolvent Companies in furtherance of the conspiracy.

53. [1408]

    As to Peter Abboud’s involvement in the winding up of companies and the change of directors, it is noted that a number of the companies associated with Banq that have gone into a creditor’s voluntary winding up and which are said to be involved in the Scheme are associated with Peter Abboud by familial relationship (see Aris Zafiriou’s affidavit sworn 9 March 2017 at [11], and Annexure B).

54. [1409]

    The plaintiffs say that another striking similarity (which again they maintain was no innocent coincidence) between the Bluemine purported vehicle purchases, when compared with the Borg purported machinery purchases, is that both Jian Holdings and Excavation (the purported vehicle or machinery vendors) were wound up with a common director after the transactions (Aloeseiafi Faanoi).

55. [1410]

    It is submitted that the obvious inference is that Peter Abboud knew and expected that: the purported purchase of vehicles by Bluemine was false; that similar false purchases occurred with entities related to Peter Abboud, namely Jian Holdings and Tepall; similar false sale and purchase transactions occurred with Bluemine and Borg Family; the BAS lodged with the ATO to obtain GST credits by these companies relating to the purported purchase of vehicles and or machinery was false; the companies would be wound up in insolvency owing taxation liabilities to the ATO; a new director would be appointed just prior to the companies being wound up; and the scheme was a means to obtain cash and other benefits to the Primary Conspirators (through Banq) and those associated with them.

56. [1411]

    The plaintiffs submit that all of the conduct referred to above involving Peter Abboud could not have occurred in the absence of the Scheme.

57. [1412]

    In summary, the plaintiffs point to the following matters (by reference to Peter Abboud’s affidavit sworn 22 March 2019): that Peter Abboud was an authorised signatory of multiple bank accounts of Banq entities and completed transfers as directed by and on the instructions of Gino Cassaniti or Fred Khalil or Ivana Cassaniti, and would follow up clients for payments of bills or invoices when requested by Gino Cassaniti or Fred Khalil or Ivana Cassaniti ([28]); all of the work he performed for clients of Banq entities was at the direction and instruction of Gino Cassaniti or Fred Khalil, who supervised Peter Abboud; that Peter Abboud only did work that Gino Cassaniti and Fred Khalil instructed him to do and he cross checked every instruction from a client with Gino Cassaniti or Fred Khalil or Ivana Cassaniti before taking any actions ([29]); any important or significant decisions were made by Gino Cassaniti or Fred Khalil, either of whom from time to time conducted staff meetings ([32]); he was regularly appointed a director and signatory to bank accounts of newly incorporated companies; and that bank transfers were usually done by Fred Khalil or Gino Cassaniti or Ivana Cassaniti, but if Peter Abboud did process a transfer it was only ever at the direction of Fred Khalil, Gino Cassaniti or Ivana Cassaniti ([34]).

58. [1413]

    It is said that, even if Peter Abboud was junior to Gino Cassaniti and Fred Khalil, that in no way diminishes his responsibility for his actions.

59. [1414]

    It is said for Peter Abboud that the pleaded facts against him, taken together, do not establish that Peter Abboud was a conspirator to defraud or injure the Insolvent Companies or to recommend a dishonest or fraudulent Scheme in pursuit of the alleged conspiracy.

60. [1415]

    Peter Abboud points out that in the Bluemine Proceeding, it is alleged: (at [133.22]) that Peter Abboud (and/or Gino Cassaniti and Fred Khalil) was the accountant and taxation adviser of Statewide Printing and State Wide Design (the Statewide Parties) and that, in 2012, they advised the Statewide Parties that by entering into the transactions, they could legitimately and legally channel money by making payments to RCG CBD (the Statewide Advice); (at [133.35]) that Peter Abboud, Fred Khalil and Gino Cassaniti were at all material times the directing will and mind of Banq; and (at [133.46]-[133.49]) that Fred Khalil permitted Peter Abboud to act as a shadow or deemed director of Banq by holding him out as such and that Peter Abboud acted in the capacity of a director of Banq and the employees of Banq were accustomed to act in accordance with his directions, instructions or wishes as a director; and that Peter Abboud was at all material times an accountant employed by Banq (repeating the matters at [133.22] in respect of the Statewide Parties and the matters particularised in [133.34]-[133.37]).

61. [1416]

    Peter Abboud thus says that the totality of the plaintiffs’ pleaded dishonest and fraudulent scheme claim against him is that, together with Gino Cassaniti and Fred Khalil, he provided the Statewide Advice (relying on inferences drawn from the matters set out above). In particular, it is said that the plaintiffs have failed to provide any evidence of the pleaded fact that Peter Abboud was involved in the Statewide Advice (at [133.22.2]).

62. [1417]

    Peter Abboud says that the reliance placed by the plaintiffs on the transaction that involved the sale of three trucks and two trailers from Jian Holdings to Bluemine for $590,000, as an example of the Scheme to create fictitious invoices where no real goods or services exist, is contrary to the plaintiffs’ own evidence (pointing to RTA records that show the transfer of three trucks and two trailers from Jian Holdings to Bluemine). It is said that, even if this transaction was fictitious, it does not fit with the plaintiffs’ case since Bluemine claimed $53,636 of input tax credit on the purchase of the trucks and trailer from Jian Holdings. Thus, it is said that Bluemine benefited from this transaction and that it was not defrauded “or injured” of any money that it would otherwise have been required to pay to the ATO.

63. [1418]

    As to the AKA Parties, Peter Abboud says that there is no evidence that he made the Scheme Recommendation to the AKA parties together with Fred Khalil; and that there is credible evidence that the only person from Banq that made any recommendations to the AKA Parties was Gino Cassaniti.

64. [1419]

    Insofar as reliance is placed by the plaintiffs (see [821] of the plaintiffs’ submissions) on two emails sent by Peter Abboud to Brenda Louwen of Ignite Promotions attaching invoices and asking for payment (as evidence of Peter Abboud’s knowledge of, and receipt of a benefit from, the alleged Scheme), Peter Abboud says that this shows that the plaintiffs have no evidence to prove their allegation against Peter Abboud of knowledge of the Scheme. Similarly, it is said that the plaintiffs’ claims that Peter Abboud was involved in recommending or implementing the Scheme with Reliance Cleaning, Wenman Brimak, Ignite Promotions, the Statewide parties and Borg Group are not supported by any credible evidence.

65. [1420]

    As to the pleaded conspiracy, it is said that, to be a co-conspirator in the conspiracy, it would need to be established that Peter Abboud knew and expected that the Scheme would involve breaches of fiduciary duties and still recommended and implemented the Scheme; and that this would in turn require that he: had knowledge of the Scheme; and of the breaches of fiduciary duties by directors of the Insolvent Companies as a result of the Scheme; and that he still recommended and/or represented to the Scheme Participants that they enter into the Scheme transactions.

66. [1421]

    Peter Abboud says that, even if the plaintiffs are correct about the existence of a conspiracy and the alleged conspirators, the evidence shows that he was not a conspirator as he had neither direct knowledge of the Scheme or of the breach of fiduciary duties resulting from the Scheme (due to his junior role at Banq) and nor did he recommend and/or represent and/or implement the Scheme. It is said that there is no credible evidence that Peter Abboud was a controlling will and mind of Banq or a shadow director of the company, pointing to the evidence of Frank Criniti, Mario Sande, Elias Nassar and Andre Abou-Antoun to the effect that only Gino Cassaniti was the controlling will and mind of Banq and that Peter Abboud was a junior.

67. [1422]

    Insofar as the plaintiffs have submitted (at [762]) that Banq operated as a professional partnership, Peter Abboud points out that the business of Banq was carried out through a corporation and not through a partnership. It is said that, even though Peter Abboud was offered 10% shares in the new entity being set up to run an accounting firm, he was not a controlling will or mind of Banq or a shadow director; that he was an unqualified junior employee whose duties were limited to bookkeeping, accounting and simple tax compliance matters. It is said that the other shareholders and directors of Banq (including in this context Mr Cassaniti) all had completed formal accounting qualifications. It is noted that Peter Abboud deposed that he had not then completed his accounting studies (commenced in March 2002 and undertaken on a part-time basis with periodic breaks) (his affidavit sworn 22 March 2019 at [6]).

68. [1423]

    Peter Abboud refers to the evidence summarised earlier of others of his role in Banq and points to Annexure A to his affidavit sworn 22 March 2019 as confirming that he had to ask Gino Cassaniti for authority before providing documents at the request of the client.

69. [1424]

    As to [765] of the plaintiffs’ submissions (relying, as evidence that Peter Abboud was a shadow director of Banq, on Ivana Cassaniti’s affidavit sworn 28 June 2019 where she deposes that he managed, hired and fired staff), Peter Abboud points out that, in cross-examination, Ivana Cassaniti could not recall which staff Peter About hired or fired. It is said by Peter Abboud that Ivana Cassaniti lacked credit and that any evidence that she gave against Peter Abboud was self-serving evidence and should be disregarded. As to [766] of the plaintiffs’ submissions, which refer to Gino Cassaniti’s affidavit evidence that “Peter Abboud was in fact an equity partner of Banq who managed as a partner and was remunerated as a partner”, again, it is said by Peter Abboud that this evidence is self-serving and cannot be relied upon; and that it is contradicted by evidence of other witnesses (referring to the evidence given by Elias Nassar and Andre Abou-Antoun summarised earlier).

70. [1425]

    Peter Abboud cavils with the proposition (at [770]-[798] of the plaintiffs’ submissions) that the transactions involving the transfer of vehicles from Jian Holdings to Bluemine and subsequent sale/transfer of those vehicles was “a paradigm example of the conspiracy in action”. Peter Abboud says that this ignores prima facie documents that show that the Bluemine truck transactions do not fit the steps involved in the alleged Scheme (noting that these transactions involved “real” trucks and trailers). It is said that George Abboud had a genuine reason to have these trucks transferred out of Jian Holdings to a new company; and that there was a legitimate reason for setting up Bluemine to acquire and hold the trucks (referring to Peter Abboud’s affidavit sworn 22 March 2019 at [7], [59]-[60] and to the evidence given by Andrew Barsa in cross-examination (at T 912.10-14]). Peter Abboud says that Andrew Barsa’s evidence is consistent with the evidence that Peter Abboud gave during his ATO interview (see Ex 17 at 39-41, 46, 62-63, 67).

71. [1426]

    Peter Abboud points out that the contention (at [789] of the plaintiffs’ submissions) that he was the sole director of Jola Holdings is incorrect; that the director of Jola Holdings was Michael Abboud (I note that the plaintiffs’ submission stated that he was the sole director “at the time” and that Peter Abboud was the sole director and secretary of Jola Holdings from 6 May 2011 to 22 March 2013, and that Michael Abboud took over those positions on 22 March 2013, see Ex K at 50614).

72. [1427]

    Insofar as the plaintiffs (at [791] and [792] of the plaintiffs’ written submissions) assert facts from 2005 to 2011 which predate Peter Abboud’s employment with Banq, it is submitted that these should be disregarded in assessing whether Peter Abboud was involved in recommending a dishonest or fraudulent scheme that would defraud or injure Bluemine.

73. [1428]

    It is said that the submissions at [793] of the plaintiffs’ submissions are incorrect, in that the ATO running account balance has marked the respective BAS for the sale of the Multipower Tipper as “self-assessed” meaning that the sale was reported to the ATO.

74. [1429]

    Peter Abboud says, in summary, that these truck transactions benefited Bluemine and the real owner of the trucks; and that he and George Abboud did not cause harm or injure Bluemine in relation to those transactions. It is said that, once the two trucks and two trailers were sold to third parties by Bluemine, the money was deposited into a high interest account and held for the benefit of George Abboud until he needed it. It is said that George Abboud was living in Thailand in 2012 to 2013 and that the payments to him were moneys that belonged to him from the sale of his trucks, and made at his directions; and that there was nothing dishonest or fraudulent about these transfers. Reference is made to the evidence that Peter Abboud gave to this effect in his ATO interview (Ex 17 at 36.22-38).

75. [1430]

    As to Bluemine’s involvement with the AKA Parties, Peter Abboud says that Andre Abou-Antoun’s evidence was riddled with errors, inconsistencies and contradictions; and that aspects of his evidence have clearly proven to be untrue, inconsistent and contradictory on cross-examination (adopting the submissions by the Khalil defendants in this regard).

76. [1431]

    Peter Abboud further says that the plaintiffs’ submissions (at [800(a)]) as to the purported advice given by Peter Abboud and Fred Khalil to set up new companies, contradict the plaintiffs’ submissions (at [807]-[808]), which it is said show that one of those companies was set up was before the AKA Parties engaged Banq (and indeed before Banq even existed).

77. [1432]

    It is submitted that it is clear from the evidence of Andre Abou-Antoun that the structuring or tax advice that the AKA Parties received from Banq (including incorporating Earth Civil) came from Gino Cassaniti; as Earth Civil was set up right after Andre Abou Antoun’s meeting with Gino Cassaniti (T 754.6-16). It is said that “the finger was pointed” at Peter Abboud and Fred Khalil in order to protect Gino Cassaniti. Peter Abboud says that it is clear that the only individual named in the letter to the ATO in connection with work done by Banq for the AKA parties is Gino Cassaniti.

78. [1433]

    As to the transactions involving Bluemine, Ignite Promotions and the Wenman Parties, Peter Abboud submits, in effect, that the inferences sought to be drawn by the plaintiffs (see at [821]-[822] of the plaintiffs’ submissions) as to Peter Abboud’s involvement in recommending and implementing the Scheme (from the two emails that Peter Abboud forwarded) are not tenable. Peter Abboud says that the evidence is that he acted under the direction of Gino Cassaniti, Fred Khalil and Ivana Cassaniti and hence, he says that he “would have sent” these emails as directed by one of those individuals. Reference is made to the evidence that was given by Elias Nassar to the effect that he considered Gino Cassaniti to be his accountant and tax advisor for the entirety of his engagement with Banq Accountants (T 827.45-47). Peter Abboud adopts [108]-[110] of the Khalil defendants’ submissions in this regard.

79. [1434]

    Peter Abboud also cavils with the plaintiffs’ submissions (at [823]-[830]) as to the purpose and role of RCG CBD being as a sham company solely used to issue fictitious invoices (and as to Peter Abboud’s knowledge of this dishonest and fraudulent scheme).

80. [1435]

    Peter Abboud says that RCG CBD was utilised both as a labour hire company and as a subcontractor. Insofar as the Office of State Revenue enquiry referred to at [826] of the plaintiffs’ submissions is concerned, Peter Abboud says that this related to RCG CBD invoices that were issued to Melhem Civil Pty Ltd for subcontracting work performed by RCG CBD. It is submitted that it is not unusual for a company to be used to fulfil multiple types of contractual arrangements.

81. [1436]

    Reference is made to the evidence of Scott Crabbe (at T 954.16-29), to the effect that he was employed “under George Khalil’s business” which he agreed was RCG CBD; and to the evidence of Fred Khalil in his affidavit sworn 25 March 2019 at [45] that “RCG was a company acquired by my brother George Khalil to undertake cleaning contract work from head contractor Reliance Cleaning Group (Aust) Pty Ltd. I understand that it also hired staff to Banq Advisers in the 2013 financial year”.

82. [1437]

    As to the plaintiffs’ suggestion (at [829]) that Peter Abboud wound up RCG CBD, Peter Abboud says that the evidence does not suggest that he had any involvement in the winding up of RCG CBD or any other of the Insolvent Companies, noting the evidence that Peter Abboud has never met the liquidator or attended any meetings as a proxy and that Peter Abboud was instructed by Gino Cassaniti to prepare some accounting ledgers that were requested by the liquidator after the corporations were already in liquidation. Reference is also made to the evidence in cross-examination of the liquidator (at T 252.43-253.41), in which the liquidator did not recall ever having met or spoken to Peter Abboud; and confirmed that a document shown to him appeared to be an instruction from Gino Cassaniti to Peter Abboud as to the preparation of company ledgers.

83. [1438]

    Peter Abboud says that the suggestion that LFC Holdings was a Scheme Participant has only been raised by the plaintiffs in their submissions (noting that it is not named as a defendant or a Scheme Participant in the RCG CBD third further amended statement of claim). Peter Abboud denies that he derived (see [831]-[840] of the plaintiffs’ submissions) a dishonest financial benefit of $52,020 from the Scheme. Peter Abboud says that the payments into LFC Holdings from RCG CBD were for the work he performed as instructed, referring to his affidavit sworn on 22 March 2019 (at [27]) in which he deposes that “[a]ll decisions to set up the various Banq entities and transfers of my employment were made by Gino [Cassaniti]”.

84. [1439]

    Insofar as it is submitted by the plaintiffs (at [832] of their submissions) that there is no explanation for these transactions and that Peter Abboud has produced no document, Peter Abboud points to Annexure B to his affidavit sworn 22 March 2019, which he says is a complete disclosure of his remuneration earned from his work at Banq from 2009 to 2017 (salary, bonuses, LFC additional salary and LFC additional bonuses).

85. [1440]

    Peter Abboud also points to his evidence in the ATO interview as to the purpose and use of LFC Holdings (see Ex 17 at 15.40-41), namely to the effect that he was being paid through labour hire firms and that he was paid additional amounts through LFC Holdings; and to his evidence in that interview at 14.29-36; 13.11-18; and 19.18-21, to the effect that he was employed by Banq on a salary plus bonuses and that the labour hire companies he was associated with would have paid LFC Holdings “for work that was done for Banq Accountants if it was paid”.

86. [1441]

    Peter Abboud says that the relevance of the plaintiffs’ submissions as to Peter Abboud’s involvement in transactions from Reliance Cleaning to RCG CBD (at [841]-[851]) is unclear and that those submissions should not be accepted. It is noted that the pleaded case is that there was a dishonest and fraudulent Scheme to issue fictitious invoices to obtain a tax advantage and that the Scheme was designed to cause a loss to the Insolvent Companies due to the breaches of fiduciary duties of the directors of those Insolvent Companies.

87. [1442]

    Peter Abboud points to Scott Crabbe’s evidence in cross-examination to the effect that Reliance Cleaning was a genuine cleaning business with hundreds of business customers in Sydney’s CBD for whom cleaning services were performed (T 948.40-951.10) and Exs 9, 10 and 11; and to Scott Crabbe’s evidence that these businesses were issued with genuine invoices for real cleaning work performed (T 952.1-5). Peter Abboud says that Reliance Cleaning did not employ cleaners; rather, it subcontracted the work to RCG CBD which employed cleaners who undertook the work; thus, it is said that Reliance Cleaning made a margin on what it billed its customers and what it paid RCG CBD.

88. [1443]

    Furthermore, it is noted that Peter Abboud only owned 3.4% of Reliance Cleaning, which was held through GFP Holdings (a company that Ivana Cassaniti controlled). Peter Abboud says that he did not receive any income, dividends, bonuses or any form of remuneration from Reliance Cleaning. It is noted that Scott Crabbe owned 33% of Reliance Cleaning and it is said that Scott Crabbe (who Peter Abboud says is unconnected with Banq and was always in the cleaning industry) was always in control of Reliance Cleaning. Peter Abboud says that the evidence shows that Scott Crabbe was the “Managing director” of Reliance Cleaning until he ceased on 23 August 2016.

89. [1444]

    Peter Abboud says that his income (directly as salaries and wages or bonuses, or through LFC Holdings) has been fully disclosed in his affidavit and that he has paid the required income tax to the ATO on all of those receipts.

90. [1445]

    Peter Abboud says that the plaintiffs have attempted to downplay Scott Crabbe’s control and role within the Reliance Cleaning business in an attempt to amplify Peter Abboud’s involvement in the Reliance Cleaning business and have done so in order to make it fit their claim that Peter Abboud was involved in recommending and implementing the Scheme. It is said that the evidence of Peter Abboud’s involvement in Reliance Cleaning is consistent, namely that Peter Abboud’s role was to provide Scott Crabbe assistance in the commercial tendering processes. Reference is made to [40] of Peter Abboud’s affidavit sworn 22 March 2019 and to the evidence given by him in his interview with the ATO (Ex 17 at 22.11-18) to the effect that he helped with the tender processes for cleaning contracts. Reference is also made to the evidence given by Fred Khalil in his ATO interview (Ex 18 at 25.20-27) that Scott Crabbe was “running the tenders and the day to day operation” of Reliance Cleaning and that:

91. [1446]

    Peter Abboud accepts that he was a director of Reliance Cleaning. Peter Abboud says he was instructed by Gino Cassaniti to become director of various companies and to become the signatory to the bank accounts of various companies, as part of his employment with Banq. It is said that Peter Abboud always knew that there was a genuine commercial subcontractor relationship between RCG CBD and Reliance Cleaning. It is noted that Scott Crabbe gave evidence in his cross-examination (T 957.48-958.1) to the effect that labour hire services were being provided by RCG CBD to Reliance Cleaning; and that Scott Crabbe agreed that Reliance Cleaning engaged labour hire firms and paid them a sum about $2 million in that year (which I understand to be 2012-2013) (T 954.1-3).

92. [1447]

    Reference is made to Fred Khalil’s ATO interview (Ex 18 at p 23.12-19) to the effect that an agreement was made (between him, “RC Group”, Ivana Cassaniti and George Khalil) to have a labour hire company to provide services to Reliance Cleaning. It is noted that Peter Abboud said in his ATO interview (Ex 17 at 24.10-16) that one of the labour hire companies was RCG CBD and that “Reliance Cleaning Group would have provided that with a contract – with contract work as well”.

93. [1448]

    As to [847]-[848] of the plaintiffs’ submissions, Peter Abboud says that there is no evidence that shows the invoices were produced only in response to the s 353-10 notice issued by the ATO.

94. [1449]

    Peter Abboud says that there is no evidence to support the inference (see [852]-[856] of the plaintiffs’ submissions) that he knowingly made dishonest and fraudulent Scheme Recommendations to Elias Nassar and that Banq would receive a fee. Reference is made, rather, to his evidence at [28(o) and (p)] of his affidavit sworn 22 March 2019, where he deposes to his role as authorised signatory of multiple bank accounts of Banq entities and that he would occasionally complete bank transfers of these entities “as directed by and on the instructions of” Gino Cassaniti or Fred Khalil or Ivana Cassaniti; and that he would “follow up” clients for payments of bills or invoices when requested by one of those three.

95. [1450]

    As to the inference sought to be drawn by the plaintiffs (see [857]-[861] of the plaintiffs’ submissions), from the email sent by Peter Abboud to Mario Sande chasing the payment of an invoice, that Peter Abboud must have recommended the Scheme to Mario Sande, Peter Abboud maintains that he would have sent that email as directed by Gino Cassaniti, Fred Khalil or Ivana Cassaniti. He maintains that he never recommended any scheme or had knowledge of any scheme in operation between RCG CBD and the Statewide Parties. Peter Abboud points to Mario Sande’s evidence (at T 786.15-25) to the effect that he dealt with Fred Khalil and Gino Cassaniti in relation to structures and more technical matters and that Peter Abboud’s role in Banq related to preparing the BAS returns and MYOB entries.

96. [1451]

    Peter Abboud says that there is no evidence to support the inference sought to be drawn by the plaintiffs (at [862]-[865] of their submissions) that he “knew of the Borg party transactions and was involved in how these transactions were recorded in the Borg Family accounts given his role at Banq”. Peter Abboud points out that there was no mention of him in Tanya Borg’s affidavit or during her cross-examination.

97. [1452]

    Peter Abboud says that he had no knowledge of the existence of Diamondwish until after it was in liquidation and that he had no involvement with accounting work for Rackforce and Diamondwish until after they were in liquidation; referring to his affidavit sworn 22 March 2019 in which he said that the only work he undertook in relation to Rackforce (which he said was used by Frank Criniti “as a labour hire company for his employees of the restaurant chain, as well as to pay royalties to investors in the chain”) was when the liquidator asked him to reconcile the bank statements he provided while it was in liquidation (see [75], [80]).

98. [1453]

    It is said that there is no evidence to support the plaintiffs’ claim that Peter Abboud made the Scheme Recommendation to Frank Criniti and/or that he knew that a scheme was implemented by Gino Cassaniti that would cause Frank Criniti to breach his fiduciary duties and defraud and injure Diamondwish and Rackforce.

99. [1454]

    Peter Abboud points to the evidence given by Tarun Shah that he was not aware of Diamondwish until 2014 and that he never asked anyone at Banq to do any work in relation to either Diamondwish or Rackforce (T 935.45-936.5); and to Frank Criniti’s evidence in cross-examination, that Peter Abboud was just a “gofer” or a donkey and just did low level work.

100. [1455]

     It is noted that Tarun Shah gave evidence in cross-examination that there were 17 or 18 companies in the Criniti companies (T 935.30-40); and that he was employed by Rackforce and received his wages from Rackforce (T 936.25-35).

101. [1456]

     Peter Abboud says that it is clear that Diamondwish and Rackforce were companies personally used by Frank Criniti for tax avoidance and that Frank Criniti was always in control of these entities. Peter Abboud adopts the Khalil defendants’ submissions (at [127]-[129]) in this regard.

102. [1457]

     Peter Abboud says that his evidence and that of the liquidator, Frank Criniti, Mario Sande, Elias Nassar, Andre Abou-Antoun and Scott Crabbe, demonstrates that he, Peter Abboud, was a junior employee who undertook basic bookkeeping, accounting and tax compliance tasks at Banq and its associated entities under the supervision of Gino Cassaniti. It is accepted that, from time to time, Peter Abboud was made a director and bank account signatory of Banq companies or client companies but it is said that he undertook work and money transfers under the direction of Gino Cassaniti and Ivana Cassaniti.

103. [1458]

     Peter Abboud contends that his evidence, and that of Andrew Barsa, together with the documentary evidence clearly shows that Bluemine was incorporated for a genuine reason and undertook a genuine transaction in the purchase of trucks from Jian Holdings. Peter Abboud says that, after the purchase and sale transactions of those vehicles, he had little knowledge of Bluemine’s activities.

104. [1459]

     As to Reliance Cleaning, it is said that the evidence of Peter Abboud and Scott Crabbe and the documentary evidence clearly shows that Reliance Cleaning was a genuine cleaning business and had a genuine subcontracting agreement with RCG CBD.

105. [1460]

     Peter Abboud says that the documentary evidence obtained under subpoena and tendered into evidence clearly shows that Gino Cassaniti was the only accountant/advisor of the AKA Parties and that the evidence that Peter Abboud, together with Fred Khalil, was involved in recommending and implementing the Scheme is false. It is said that there is no evidence that supports the claims that Peter Abboud was involved in making any Scheme Recommendations to the Wenman Parties, the Statewide Parties, the Borg Parties or Criniti Parties.

106. [1461]

     Peter Abboud also says that he has fully disclosed his earnings from Banq including through LFC Holdings from 2009 and 2017 in his affidavit and he has paid taxes on this income.

107. [1462]

     In relation to loss and causation issues, Peter Abboud adopts the submissions made by the AKA Parties (see in due course).

108. [1463]

     The plaintiffs cavil with the proposition that they have ignored prima facie evidence as to the purchase of trucks for the purpose of which Bluemine was incorporated, referring to their closing submissions (at [770] and [782]) as to the incorporation of Bluemine on the advice of Peter Aboud and Fred Khalil for the purported purpose of purchasing trucks (and see at [770]-[795] of the plaintiffs’ closing submissions).

109. [1464]

     The plaintiffs make clear that they do not contend that the vehicles did not exist; rather, their position is that insofar as the transfer of certain trucks and trailers involved Bluemine there was a “purported sale and purchase” (and that this was an example of the conspiracy in action). It is said that the contentions advanced at [58]-[60] of Peter Abboud’s submissions rest on assertions and or hearsay.

110. [1465]

     As to the involvement of Peter Abboud in the transfer of $155,000 to Bluemine from Discobell (which also involved transactions with Banq and Consolidated Wealth), the plaintiffs note that the email on 28 June 2013 to NAB (at Ex 24) records that Peter Abboud advised the bank that the purpose of the various transfers would be considered as a loan to Jola Holdings to pay for a truck in Bluemine. It is said that, notwithstanding Peter Abboud’s sworn evidence that “if I did process a transfer, it was only ever at the direction of Fred, Gino or Ivana” (read only as assertion), the purpose of the various transactions was within the knowledge of Peter Abboud and Ivana Cassaniti; and that they have failed to provide an explanation for them.

111. [1466]

     As to the plaintiffs’ submission (at [789(c)] and [793(c)]) that Peter Abboud was the director and/or shareholder of Jola Holdings at the time the trucks were purportedly transferred from Bluemine to Jola Holdings, the plaintiffs point out that there is no evidence (other than the application for the transfer of registration) which records 28 June 2013 as the date on which the truck was purportedly purchased by Jola Holdings from Bluemine for $110,000. It is noted that the bank records of Bluemine do not record a payment from Jola Holdings on or around that date and that there is no other document which reveals that any consideration passed between Jola Holdings and Bluemine.

112. [1467]

     Thus, while the plaintiffs accept that the ASIC records reveal that Peter Abboud ceased his appointment as the director of Jola Holdings on 22 March 2013, they do not accept the proposition that Jola Holdings purchased a truck from Bluemine on 28 June 2013 (or any other date). It is said that, on the evidence before the Court, Vehicle 5 passed from Bluemine to Jola for no consideration; and that, other than the purported purchase date recorded in the application for the transfer of registration, the date on which Jola Holdings obtained Vehicle 5 cannot be determined with any certainty. It is submitted that the Jola Holdings benefit occurred either when Peter Abboud was the director of Jola Holdings or at a later time on or around 28 June 2013 when Jola Holdings was a company related to Peter Abboud (by way of his familial relationship with Michael Abboud).

113. [1468]

     As to the reference made by the plaintiffs in their submissions (at [791]-[792]) to facts from 2005 and 2011, which predated Peter Abboud’s employment with Banq, the plaintiffs say that it is of no consequence whether Peter Abboud was employed by Banq (or Banq Accountants) at the time when Jian Holdings purportedly purchased trucks from Tepall, noting that Peter Abboud was the director of Jian Holding in October 2010 (and they accuse Peter Abboud of obfuscation in this regard)

114. [1469]

     As to Peter Abboud’s submissions at [26], to the effect that Bluemine claimed an input tax credit of $53,636 on the purchase of the trucks and trailer from Jian Holdings (and it was therefore Bluemine that benefited from the transaction and that it was not defrauded or injured), the plaintiffs say that this ignores the remainder of the facts relevant to the input tax credit. It is noted that the refund arising from the input tax credit claimed by Bluemine was paid by the Commissioner to Banq’s trust account; that the bulk of that refund was almost immediately transferred into Banq’s Business Cheque Account; and that, as a result of the audit of Bluemine conducted by the Commissioner the refund of $53,636 was disallowed and a liability in that amount was raised against Bluemine’s Running Balance Account. Again it is submitted that Peter Abboud’s submissions amount to obfuscation (and the plaintiffs include a table pointing to the status of any evidence referred to in Peter Abboud’s submissions to show that either there was no evidence or, if there was, it was either not read or subject to a s 136 ruling that it be limited to assertion).

115. [1470]

     It is not disputed that Peter Abboud was the signatory of multiple bank accounts for entities associated with Banq and that he carried out work in relation to those entities including effecting bank transfers and following up invoices.

116. [1471]

     As to the impugned Bluemine transactions, I find that Peter Abboud gave advice to Andre Abou-Antoun in relation to Bluemine (and that the reference to a company that “we” have that could arrange invoicing is significant in pointing to his involvement with Banq). I accept that, even though his role at Banq was junior, Peter Abboud was involved in the implementation of the transactions and he must have known that they involved a series of transactions for which no services had been rendered. While I can accept that Peter Abboud was not a controlling mind of Banq (being only a 10% shareholder and only a junior employee), that does not mean he was not aware of the implementation of the Scheme involving its clients.

117. [1472]

     As to the Borg Parties, I accept that Peter Abboud’s role was subordinate to that of Fred Khalil (the latter being the one who gave advice on the re-structuring of the companies). However, for the reasons set out above in relation to Fred Khalil, it must have been apparent to Peter Abboud that the involvement of RCG CBD and Bluemine in the relevant transactions was for no purpose or benefit to the Insolvent Companies and was not necessary for the transactions in question.

118. [1473]

     As to RCG CBD, I do not make a finding that its purpose was to be a sham company (nor is it necessary to do so). However, it is clear that the impugned transactions went far beyond any labour hire services that may have been provided by it and there is a direct inconsistency in the evidence between Peter Abboud and Fred Khalil as to which company was even the labour hire company – which, again, points to the treatment of companies interchangeably and without regard to their actual roles.

119. [1474]

     While I accept that payment for Peter Abboud’s work could be effected through entities such as LFC Holdings (and his evidence is that he declared all of his income), and I accept that he did not play a primary role in the Scheme Recommendation, I consider that Peter Abboud did play a large role in the implementation of the Scheme in relation to the clients of Banq the subject of these Proceedings; and that he must have done so knowing that it was in effect a mirage; i.e., that invoices were being rendered for services not provided (which could only have been for tax minimisation or avoidance purposes and which carried the risk of tax exposure for the companies in question – and no likely ultimate benefit to them).

120. [1475]

     I reject the submission made for Peter Abboud that Diamondwish and Rackforce were companies personally used by Frank Criniti for tax avoidance and that Frank Criniti was always in control of those entities. I can well accept that they were utilised for tax avoidance; but not that Frank Criniti was in control of that process.

121. [1476]

     Peter Abboud had the requisite degree of knowledge – knowledge of the relevant aspects of the Scheme in its application to Bluemine and RCG CBD. Peter Abboud knew, at the very least, of facts that would indicate to a reasonable and honest person that no services were provided as claimed in the invoices. I therefore find Peter Abboud liable for knowing assistance in breach of directors’ duties as alleged.

Submissions and findings – George Khalil

1. [1477]

   I have set out above the family relationships between Fred Khalil and George Khalil, and between George Khalil and Peter Abboud. I have also referred to George Khalil’s role in Banq.

2. [1478]

   The plaintiffs say that George Khalil’s role in the primary conspiracy was a critical one in that he was the controller of a number of purported “labour hire” entities that the Primary Conspirators utilised in the implementation of the primary conspiracy (in particular, RCG CBD).

3. [1479]

   The plaintiffs say that “labour hire entities” were at the heart of the conspiracy, in that, on every occasion, in the course of giving the structural advice the Primary Conspirators advised their clients that there needed to be a trading entity, a separate asset holding entity and a labour hire entity. While the plaintiffs accept that such advice would otherwise be entirely innocuous, the plaintiffs say that here it was not because the labour hire entity would be “loaded up: with GST and/or PAYG obligations to the Commissioner that it will be unable to pay, because all of the money paid into that entity will have been paid out” (see for example the evidence given by Frank Criniti (at T 499.5-34) of the advice he was given by Gino Cassaniti).

4. [1480]

   It is noted that George Khalil’s ASIC Personal Names Extract reveals that George Khalil was formerly a director of eleven companies, of which nine went into creditors’ voluntary liquidations (Ex K at 31534-31538); and that George Khalil has been associated with a number of purported labour hire companies that are also associated with Banq. Insofar as Fred Khalil in his interview with ATO said that Reliance Cleaning engaged these different labour hire companies to perform cleaning services periodically, the plaintiffs contest that proposition.

5. [1481]

   The plaintiffs point out that the labour hire entities purportedly used by Reliance Cleaning, and associated with George Khalil (with the exception of RC Group Aust), have been associated with the Banq Address. The plaintiffs say that (see Ex K at 31873-31880) copies of the Statements of Account for the labour hire Companies (except for RC Group Aust which failed to lodge any taxation returns) demonstrate that the labour hire entities did not report their GST and PAYG obligations (or reported these just prior to the appointment of a liquidator); and that no amounts for GST or tax purportedly withheld from salaries and wages were remitted by the labour hire entities to the ATO.

6. [1482]

   The plaintiffs rely on various emails and other documents (obtained by the ATO during the course of an access visit to Banq) that it is said demonstrate George Khalil’s involvement and inter-connectedness with Banq, the “labour hire companies” and the Primary Conspiracy, those being namely: the email dated 9 April 2013 from Vipul Parekh to Compbiz as to the use of the Banq server for all Reliance email accounts (see above) (Ex K at 38534); the following email on 18 April 2013 from George Khalil, using his email address at Banq but signing off as the “Operations Manager” at Reliance Cleaning (Ex K at 38532); the email chain between Peter Abboud (at Banq) and Mario Sande (of Statewide Printing) requesting the printing of 1000 RCG CBD business cards, in which George Khalil is described as the operations manager (Ex K at 38509); an email relating to George Khalil in relation to Workforce Unlimited trading as RCG Australia (Ex K at 38512-38513); and emails between Fred and George Khalil as to matters related to Workforce Unlimited (Ex K at 38517, 38519); and other matters (Ex K at 38526, 38528); including stamping of an assignment of a lease from KTDH to Kamikaze (DH) Pty Ltd (Ex K at 38542); signing of insurance forms for RC Group Aust (Ex K at 38547); organising a cheque book to make payments for RC Group Aust Pty Ltd (Ex K at 38548-38549); George Khalil’s agreement with Fred Khalil’s suggestion of a monthly meeting to go through the profit and loss (and anything and everything to do with) Reliance and Right Clean Group (Ex K at 38568); requesting clarification of handyman activities for the purposes of workers’ compensation insurance (Ex K at 38579); dealing with client requests as to payments (Ex K at 38585) (George Khalil here as operations manager of RCG (Aust) Pty Ltd); as to the making of a request to CBA (Ex K at 38662); as to outstanding payments by a client of Reliance Cleaning (Ex K at 38707-38709); a Subcontractors Statement for RC Group Aust, signed by George Khalil as the director (Ex K at 38733); communications as to amended timesheets (Ex K at 38911); an email as to payroll for RCG CBD dated 14 August 2012 from Vipul Parekh (whose sign off is there identified as “Accounts Supervisor” for Reliance Cleaning) and sent to George Khalil (Ex K at 38934); other communications regarding Reliance Cleaning (Ex K at 38935, 38937); emails from George Khalil (signing off as RCG Operations Manager) and enclosing documents signed by George Khalil (Ex K at 38938).

7. [1483]

   The plaintiffs say that, amongst other matters, those emails and documents show that George Khalil’s role in the Primary Conspiracy was as the controller (including financial controller) of the labour hire entities purportedly operated by Banq; and it is said that the various entities (Reliance Cleaning, RC Group Aust, RCG, RCG CBD, Right Clean Group and Right Clean Global) appear to have been used interchangeably, as if they were the one entity.

8. [1484]

   As to George Khalil’s role in the Scheme Implementation, the plaintiffs point to his position as a director (and, in some cases, company secretary) of the following companies connected to Banq: Workforce Unlimited; RPS Security; RCG CBD; RC Group; Little Johnny; Involved Recruitment; Investmint; Genuine Constructions; EM and EN Investments; Compbiz; and Bright Star Hire

9. [1485]

   The plaintiffs contend that the striking similarity (which they say is no innocent coincidence) of George Khalil’s appointments to the companies identified above, the appointments of liquidators in creditor’s voluntary liquidations and the backdating of directorships could not have occurred in the absence of the primary conspiracy. It is said that, by his involvement in those companies and those activities, the correspondence referred to above, and the transactions discussed below, it is to be inferred that George Khalil was a Primary Conspirator and that he had knowledge of and participated in the primary conspiracy.

10. [1486]

    A purported labour hire/subcontract agreement between Phoenix Industrial Cleaning and RCG CBD signed by George Khalil on behalf of RCG CBD was produced by Phoenix Industrial Cleaning in answer to a s 353-10 notice (Ex K at 33853, 32065-32070).

11. [1487]

    As noted above, George Khalil was recorded in ASIC records as a director of RCG CBD from its incorporation on 16 May 2012 until 28 May 2013 when the (backdated) Form 484 was lodged notifying ASIC of the change in directorship (Ex K at 31691). The plaintiffs say that the ASIC record is prima facie evidence that George Khalil was a director of RCG CBD and acted as its director from 16 May 2012 until 28 May 2013 and they contend that that prima facie evidence has not been rebutted.

12. [1488]

    Relevantly, the plaintiffs contend that the prima facie position caused by the lodging on 28 May 2013 of the Form 484 (which had the purported effect of causing George Khalil to cease as director from 16 May 2012), should not be accepted because the Form was backdated. It is said that there is no independent evidence that George Khalil ceased as director from that date; and that the inference to be drawn from the fact that George Khalil was the controller of RCG CBD bank account involving transactions of millions of dollars (including those in respect to Banq, Reliance Cleaning, Involved Recruitment, the Wenman Parties, and the Statewide Parties, amongst others) substantiates the position that, during the period in which those transactions occurred, George Khalil was a director of RCG CBD. It is noted that George Khalil has not gone into evidence contradicting his directorship of RCG CBD and that this evidence is peculiarly within his knowledge.

13. [1489]

    As also noted above, George Khalil was at all times the sole signatory of the RCG CBD bank account (an account ending #8539) with the CBA (Ex K at 31543-31544) as evidenced by the documents produced in response to a notice issued to CBA pursuant to s 353-10.

14. [1490]

    The plaintiffs say that all of the payments identified in the RCG CBD third further amended statement of claim (either to or from RCG CBD) could not have been made without the knowledge and approval of George Khalil as the controller of RCG CBD’s bank account. The plaintiffs say that the payments could only have occurred with the knowledge and concurrence of George Khalil as to every element of each transaction and the chain of transactions that led to them (in other words, the plaintiffs say that George Khalil was not just watching money going in and out; rather, that he knew what the payments were for, and he knew the sources of the funds).

15. [1491]

    It is said that George Khalil had to have known: the reasons for the payments from clients of Banq that were coming in and that the moneys were to be paid on to other clients of Banq minus the fee that had been negotiated with that client; that on each and every occasion what that fee was, because they differed between clients; and that the fee which Banq took (some of which appeared to be a 10% GST amount) would not be paid on to the Commissioner.

16. [1492]

    It is submitted that, due to George Khalil’s failure to give any evidence, when the true basis for him to approve these transactions going in and out of RCG CBD’s bank account was peculiarly in his knowledge, it can confidently be concluded that those payments were the implementation of the Scheme.

17. [1493]

    Similarly, the plaintiffs say that the payments (totalling $653,439.54) made by Banq to RCG CBD in the period 31 July 2012 to 27 May 2013 could not have occurred without the knowledge of the principals of Banq, namely, Gino Cassaniti, Fred Khalil and Peter Abboud, and George Khalil (as the controller of RCG CBD’s bank account).

18. [1494]

    As already noted, the plaintiffs say that the purported invoices for labour hire services issued by RCG CBD to Banq are false (see above).

19. [1495]

    As to the payments totalling $920,415 made by RCG CBD to Banq in the period from 10 September 2012 to 30 May 2013 (see Table 3.2), again the plaintiffs say that no explanation has been provided by any of the Primary Conspirators as to the basis for those payments (which information is peculiarly within their knowledge) (and that the suggestion by Fred Khalil in his affidavit at [46] that he and other staff at Banq undertook clerical work for RCG CBD for a period of time could not explain payments of that magnitude). Further, the plaintiffs say that, given that the payments to Banq from RCG CBD and Bluemine totalled $1,514.060 in the 2013 financial year, it is clear that they were not disclosed as income in Banq’s 2013 profit and loss statement (considering $1,575,371 was disclosed) (Ex K at 34233).

20. [1496]

    Reference is made to Fred Khalil’s evidence in his ATO interview (Ex 18 at 89.23-26) that Banq was not providing accounting services to RCG CBD “worth anywhere near” the amounts paid by RCG CBD to Banq; and to Peter Abboud’s inability (despite his claim to have “worked for” RCG CBD – see Ex 18 at 9.18) to explain why RCG CBD paid large sums of money to Banq (Ex 18 58.18-59.08) and that Peter Abboud also agreed that value of any work that Banq did for RCG CBD was nowhere near the value of $1.2 million. It is noted that Peter Abboud attested that he could not recall Banq doing any accounting work for RCG CBD (at 56.35-39). The plaintiffs say that, given the rounded figures and total amount paid by RCG CBD, which far exceeded what would be reasonably expected for accounting fees for an eight-month period, any such assertion is not believable.

21. [1497]

    The plaintiffs say that the payments made by RCG CBD to Banq are nothing more than the Primary Conspirators moving cash through RCG CBD and into their hands, in furtherance of the Primary Conspiracy as pleaded in the third further amended statement of claim, with George Khalil’s knowledge as the controller of RCG CBD’s bank account.

22. [1498]

    The plaintiffs refer to a succession of payments in and out of RCG CBD, often in rounded sums, in respect of all of which they contend that the payments could not have occurred without the knowledge and approval of George Khalil as the controller of and sole signatory to RCG CBD’s bank account; and in respect of which they say that the inference can confidently be drawn (in the absence of any evidence from George Khalil, or where relevant Peter Abboud and Fred Khalil; and given the lack of any documents produced to the liquidator) that George Khalil had knowledge of the basis of those transactions, namely the implementation of the Scheme, and that the transactions were not for any legitimate commercial reason.

23. [1499]

    The payments in question (to which reference has already been made above) are payments made by or to RCG CBD: between 31 December 2012 and 9 January 2013, to LFC Holdings (totalling $52,020) (see Tables 3.6 and 3.7); in the period from July 2012 to May 2013, to Reliance Cleaning (totalling $1,618,254.35) (Table 3.11) and paid out either the same day or within a few days to Tuff Gym, Workforce Unlimited, Investmint or Banq; the payments in January 2013 of $13,200 by HCC Commercial Cleaning to RCG CBD and on to Investmint (see [211] of the RCG CBD third further amended statement of claim and Table 3.6); in the period from 20 November 2012 to 13 May 2013, of amounts totalling $140,000 to Kito Investments (some of which came into RCG CBD from Reliance Cleaning) (see [171] of the RCG CBD third further amended statement of claim and Tables 3.11 and 3.14); in the period from 19 December 2012 to 14 May 2013, to Sivasli (totalling $201,000) (some of which came into RCG CBD from Involved Recruitment) (see [44] and [166] of the RCG CBD third further amended statement of claim and Tables 3.10 and 3.13); by Ignite Promotions to RCG CBD in the period from 30 January 2013 to 6 March 2013 and from RCG CBD to Wenman Brimak in the period from 5 February 2013 to 7 March 2013 (as well as payments made from Blackrock Media to Ignite Promotions or from Wenman Brimak back to Blackrock Media not included in Table 3 – see above) (see Table 3.3); by State Wide Design to RCG CBD in the period from 15 November 2012 to 7 March 2013 (totalling $491,961.71) and from RCG CBD to Statewide Printing in the period from 16 November 2012 to 13 March 2013 ($447,223.27) (Table 3.4); by Borg Family to RCG CBD in the period from 25 September 2012 to 24 May 2013 (totalling $618,000) and from RCG CBD to Borg Family in the period from 25 September 2012 to 10 October 2012 (totalling $580,000) (Table 3.5); by North Shore and John Haddad to RCG CBD in the period from 5 October 2012 to 8 May 2013 (totalling $931,000) and from RCG CBD to Aaron Tippet, Kydon Segal Lawyers/Aaron Tippet and Kito Investments in the period from 11 October 2012 to 9 May 2013 (in the sum of $580,000) (Table 3.8); by Crinz to RCG CBD in the period from 29 August 2012 to 5 October 2012 (totalling $530,000) and from RCG CBD to JRC Kazzi, Crinz, RCG CBD and Banq in the period from 30 August 2012 to 11 September 2012 (totalling $372,400) (Table 3.8); by Kamikaze to RCG CBD in the period from 31 July 2012 to 21 May 2013 (totalling $364,656.29) and from RCG CBD to Katherine Khalil, Tuff Gym and Kamikaze, amongst others, in the period from 2 August 2012 to 21 May 2013 (Table 3.12); and by Involved Recruitment to RCG CBD in the period from 7 September 2012 to 30 May 2013 (totalling $934,339.28) and from RCG CBD to North Shore, Tuff Gym and Sivasli, amongst others, in the period from 14 February 2013 to 14 May 2013 (Table 3.13).

24. [1500]

    As to the round robin of payments made by the companies in the AKA Group to Bluemine (see Table 5.2), the plaintiffs say that Bluemine issued purported invoices to AKA NSW and AKA Civil, which were paid to Bluemine and that Bluemine paid that sum, less a fee, onto companies within the AKA Group (LAM Haulage, MAL Land Group and The Great Brothers); and that the payments into Bluemine were made on the advice of Peter Abboud and Fred Khalil (T 642.6-37). Bluemine then made payments to RCG CBD of $33,110 on 10 December 2012, $16,285 on 12 December 2012 and $12,465 on 18 December 2012 (Table 5.2). (In respect to the third payment by Bluemine to RCG CBD on 12 December 2012 of $16,285 that was pleaded at [172] of Bluemine’s Statement of Claim as going to an “unknown” recipient, this has now identified in RCG CBD’s bank statement (Ex K at 30427).)

25. [1501]

    The plaintiffs say that it is to be inferred that Gino Cassaniti knew of the above payments (as a director of RCG CBD) and also that, as early as December 2012, he was orchestrating payments from Bluemine to RCG CBD. Further, it is said that, when those payments from Bluemine to RCG CBD were occurring, they could only have occurred with the knowledge and concurrence of George Khalil (as the controller of RCG CBD’s bank account) as to every element of the transactions and the chain of transactions that lead to them; i.e., that he knew what the payments were for and the sources of those funds. The plaintiffs say that George Khalil must have known that the payments from Bluemine were coming in to RCG CBD in accordance with the Scheme Recommendation and the primary conspiracy.

26. [1502]

    Again, it is submitted that by reason of the failure of George Khalil to give any evidence (when the true basis for him to approve these transactions going into RCG CBD’s bank account from Bluemine was peculiarly within his knowledge), it can confidently be concluded that those payments were the implementation of the Scheme.

27. [1503]

    Similarly, the plaintiffs say that the Diamondwish transaction (payment on 21 December 2012 by RCG CBD to Diamondwish of $250,000 and its on-payment on 24 December 2012 to Elle Barikhan) could not have occurred without the knowledge and authority of George Khalil as the sole signatory to the bank account of RCG CBD; that George Khalil must have known of it and its basis, and that Diamondwish had no entitlement to it and RCG CBD had no obligation to pay it; and that it was the implementation of the Scheme.

28. [1504]

    Again, it is said that, in the absence of evidence from George Khalil, where he was the controller of RCG CBD’s bank account, it can confidently be concluded that George Khalil had knowledge of the basis for those transactions, which was the implementation of the Scheme.

29. [1505]

    The plaintiffs again emphasise that George Khalil was the controller of the RCG CBD bank account. Reference is made to the transactions identified in the RCG CBD third further amended statement of claim (at [211], [171], [44] and [166], and [298]) that were made by RCG CBD to companies associated with Fred Khalil (and thereby, it is said, also associated with George Khalil) in respect of which the liquidator has not identified any benefit that RCG CBD received in return for those payments; nor was he provided with any documents or explanation for those transactions (see transactions above).

30. [1506]

    As already noted, the plaintiffs say that the above transactions are further patent examples of a conspirator getting cash out of various companies and into RCG CBD, and through it into his or others’ hands, tax free, as Fred Khalil, Gino Cassaniti, Peter Abboud and George Khalil determined. They say that when those payments from RCG CBD to companies associated with Fred Khalil were occurring, they could only have occurred with the knowledge and concurrence of George Khalil as to every element of the transaction (including their purpose and the source of the funds); and that George Khalil must have known that the payments out of RCG CBD were made in accordance with the Scheme.

31. [1507]

    Again, it is said that due to George Khalil’s failure to give any evidence (when the true basis for him to approve these transactions going from RCG CBD’s bank account to companies associated with Fred Khalil was peculiarly within his knowledge), it can confidently be concluded that those payments were the implementation of the conspiracy. A similar submission is made as to the payments by RCG CBD to LFC Holdings (see above) which, it is said, should be inferred to be Peter Abboud’s remuneration for his involvement in the primary conspiracy.

32. [1508]

    As noted already, the plaintiffs say that George Khalil was appointed the “straw director” of the following companies immediately prior to them being wound up in a creditor’s voluntary winding up and prior to George Khalil going into bankruptcy, namely: Little Johnny; Investmint; Genuine Constructions; EM and EN Investments; Compbiz and Bright Star Hire.

33. [1509]

    Again, the plaintiffs say that, by George Khalil’s failure to give any evidence, when the true basis for him becoming a director of those companies was peculiarly within his knowledge, it can confidently be concluded that this conduct was in fact the implementation of the conspiracy and that George Khalil was one of the Primary Conspirators.

34. [1510]

    The tax liabilities incurred by RCG CBD included BAS related liabilities for the period from 1 July 2012 to 30 June 2013 in the sum of $1,065,107 and income tax liability for the financial year ended 30 June 2013 in the amount of $2,235,475.80.

35. [1511]

    The plaintiffs say that all of the payments identified in the RCG CBD third further amended statement of claim, from RCG CBD, could not have been made without the knowledge and approval of George Khalil as the controller of RCG CBD’s bank account; and that such payments out of the RCG CBD bank account, could only have occurred with the knowledge and concurrence of George Khalil as to every element of the transaction.

36. [1512]

    The plaintiffs say that it cannot seriously be contended that a director of a company and controller of the company’s bank account (in this case George Khalil) was not aware that, in receiving payments for the provision of purported services, GST would be payable to the Commissioner (or at least the Commissioner would regard it as being payable). Similarly, it is said that if moneys are paid for the provision of a purported service, that will be income in the company’s hands, which will incur income tax liabilities.

37. [1513]

    The plaintiffs say that, by George Khalil’s failure to give any evidence, when the true basis for him to approve these transactions going out of RCG CBD’s bank account was peculiarly within his knowledge, it can confidently be concluded that those payments were the implementation of the conspiracy. The plaintiffs say that it is to be inferred that George Khalil was therefore aware that payments coming into RCG CBD for the purported provision of labour hire services would incur GST liabilities and income tax liabilities and that, as the controller of RCG CBD’s bank account, George Khalil was well aware that no payments were being remitted to the Commissioner in respect to any tax liability incurred by RCG CBD including for BAS related liabilities and income tax liabilities.

38. [1514]

    Again, the plaintiffs assert that all of the payments identified in the RCG CBD third further amended statement of claim, either to or from RCG CBD, could not have been made without the knowledge and approval of George Khalil as the controller of RCG CBD’s bank account; and that, in relation to payments coming into RCG CBD and then out of RCG CBD (totalling millions of dollars), they could only have occurred with the knowledge and concurrence of George Khalil as to every element of the transaction. It is said that (by reason of his position as controller of the RCG CBD bank account) George Khalil must have known the reason why the payments from clients of Banq were coming in and that the money was to be paid on to other clients of Banq minus the fee that had been negotiated with that client; and must have known that the fee which Banq took, some of it to look like 10% GST, would not be paid on to the Commissioner.

39. [1515]

    The plaintiffs say that, on each occasion that a payment was made into RCG CBD and then out (for example, the payments in by Ignite Promotions), it is to be inferred that there was a conversation about that payment in, the fee to be deducted, in this example 10%, and the entity into which the outgoing payment was to be made, namely Wenman. It is said that those conversations occurred between Gino Cassaniti, Fred Khalil and Peter Abboud, on the one hand, and George Khalil, on the other, as to each and every element of the respective transaction.

40. [1516]

    In summary, the plaintiffs submit that George Khalil had knowledge of all, of the essential elements of the following matters:

41. [1517]

    It is again noted that no documents were produced to the liquidator of RCG CBD when he sought them from Gino Cassaniti and/or Banq. The liquidator has been unable to identify a genuine commercial basis for the transactions that occurred. It is said, by reference to George Khalil’s failure to give any evidence and failure to produce any genuine commercial documentation, when the true basis for these transactions going in and out of RCG CBD’s bank account was peculiarly within his knowledge, that it is established that those payments were the implementation of the primary conspiracy and that George Khalil was a Primary Conspirator. It is said that his role in the primary conspiracy was at the very heart the Scheme as he was the controller of RCG CBD’s bank account and a director of a number of purported labour hire entities, in particular RCG CBD. I accept that George Khalil was the controller of RCG CBD’s bank account and a director of a number of purported labour hire companies, but as described below, that is not necessarily sufficient to establish accessorial liability.

42. [1518]

    The Khalil defendants say that the highest point of the plaintiffs’ case against George Khalil is that he was a director of RCG CBD and a signatory on the company’s account. Again, it is noted that the ASIC record demonstrates that he was appointed and removed as a director on the same day (based on an ASIC notice signed by Gino Cassaniti, albeit lodged about a year later).

43. [1519]

    It is accepted that George Khalil remained a signatory to the relevant bank account but it is said that it is no longer the case that the signatory on a bank account is the only person with access to that account (noting that a PIN or login device is a standard means of access to and use of bank accounts by the Internet). Thus, it is said that being the sole signatory on a bank account does not of itself mean that the signatory is the only person causing money to be paid in and out of the account.

44. [1520]

    The Khalil defendants say that, while it might be the case that George Khalil had the required knowledge of the transactions said to constitute the implementation of the Scheme, there is no evidence that he either agreed to implement the Scheme, made the Scheme Recommendation to any of the Scheme Participants or actually undertook any of the transactions said to be impugned as part of the Scheme; and it is said that knowledge without assistance does not attract liability for knowing assistance.

45. [1521]

    It is said that the submissions of the plaintiffs proceed on the basis that George Khalil knew or must have known of the transactions involving RCG CBD while he was a director and signatory on the bank account of that company and that this equates with knowledge of a dishonest and fraudulent design being carried into effect by Gino Cassaniti in breach of his duty as a fiduciary. The Khalil defendants say that this is not the case and that it is inconsistent with the matters pleaded as constituting the breach of duty by Gino Cassaniti.

46. [1522]

    The plaintiffs maintain that they have established that: George Khalil, the brother of Fred Khalil, was a director of a number of labour hire entities including RCG CBD; George Khalil was the sole signatory and controller of RCG CBD’s bank account; payments of millions of dollars went into RCG CBD and then out from RCG CBD; and those payments could only have occurred with the knowledge and concurrence of George Khalil as to every element of each transaction and the chain of transactions that led to them.

47. [1523]

    The plaintiffs accept the concession that they said was made by the Khalil defendants that George Khalil had the requisite knowledge of the transaction said to constitute the implementation of the Scheme. It is said that the Khalil Parties’ submission that it is no longer the case that the signatory on a bank account is the only person with access to the account (and that George Khalil was not the only person causing money to be paid into and out of the RCG CBD account) is without basis, noting that George Khalil did not lead any such evidence.

48. [1524]

    The plaintiffs say that any evidence about access to RCG CBD’s bank account is peculiarly within the knowledge of George Khali and therefore slight evidence of that fact suffices to prove the fact because it is not explained away by George Khalil, being the party with the knowledge of the fact (citing Hampton Court Ltd v Crooks at 375; Tyco Australia Pty Ltd v Optus Networks at [121]; Parker v Paton at 243; Ex parte Ferguson at 67, 70). It is said that there was no evidence that indicated that anyone other than he had access to the RCG CBD bank account.

49. [1525]

    There is no suggestion in the evidence that George Khalil played any role in the recommendation of the Scheme but he was clearly involved as a director of a number of entities and the sole signatory of a number of accounts (including RCG CBD’s account through which substantial sums were transferred). There is no evidence that anyone else had actual access to the accounts on which he was the sole signatory. Though I accept that it is conceivably possible that such access could have been given by him to others via the internet or otherwise, whether he did so appears no more than speculation – and he chose not to give evidence to explain this. The documentary evidence listed by the plaintiffs (at [1482]) shows George Khalil’s involvement with the so-called “labour hire companies” associated with Banq. The Form 484 notifying ASIC of RCG CBD’s change of director on 16 May 2012 was not lodged until 28 May 2013; and in the interim and continuing thereafter George Khalil remained the sole signatory on RCG CBD’s bank account. I consider that this strongly indicates that George Khalil continued to have a substantial role at RCG CBD after 16 May 2012 (the date on which he purportedly ceased as director of RCG CBD). I also note that George Khalil did not come forward to give evidence about his role at RCG CBD (a matter peculiarly within his knowledge) or to displace the evidence that he was the person effecting the transactions (as sole signatory) out of RCG CBD’s account.

50. [1526]

    I find that the evidence warrants the inference (which I am comfortably satisfied should here be drawn) that George Khalil had knowledge of the facts and circumstances that would indicate to an honest and reasonable person the dishonest and fraudulent design that had been put in place. In this respect, I place emphasis on the large sums paid in and out of RCG CBD, less a fee amount, and the significant payments made to Banq (for no apparent purpose). I also find that George Khalil’s role in effecting these transactions facilitated Gino Cassaniti’s and Frank Criniti’s breaches of duty, such that his knowing assistance in the breaches of fiduciary and director’s duties is established.

51. [1527]

    While I am not persuaded that the evidence establishes that George Khalil was a Primary Conspirator, I find that the claims made against George Khalil for knowing assistance in the dishonest and fraudulent designs of Gino Cassaniti and Frank Criniti in breach of their duties to the relevant companies are made good.

Scheme Participants

1. [1528]

   In each of the five Proceedings, it is said that, by reason of the Paying Participants’ knowledge, deliberate blindness or reckless indifference regarding the purpose of their payments to the Insolvent Companies, they knowingly assisted the Primary Conspirators in their breach of fiduciary duty to the Insolvent Companies; and to that extent they are jointly liable, as if they were constructive trustees, to account for their profit and provide equitable compensation for damages to the fiduciary’s principal (i.e., the respective Insolvent Companies).

2. [1529]

   It is said that the Paying Participants had or should be taken to have had knowledge (within the first four categories in Baden Delvaux), that it was likely that: first, the Insolvent Companies would be left unable to pay tax on the putative earnings from the Paying Participants because the Paying Participants or entities with whom they were associated received (less commission to the Primary Conspirators) the same amount of money back; and second, that the ATO would then audit and/or fine the Insolvent Companies for non-payment of tax. It is said that the damage then suffered by each of the Insolvent Companies, was caused by the Paying Participants role in the Scheme in that had they not paid the false invoices, the respective Insolvent Companies would not have received assessable income (and incurred liability for non-payment of taxes).

3. [1530]

   It is said that in each case the Scheme Participants exploited the conditions which made the commission of that wrong a distinct probability and were either aware of, or else indifferent to, that probability. It is said that, whether they had any knowledge at all of whether a breach had in fact occurred, that breach was wanted by them and, even if they were ignorant of any actual wrong by the Primary Conspirators, they should be taken as having assumed the risk, should the wrong occur. It is submitted by the plaintiffs that, by their own actions (by the role taken in the matter) the Scheme Participants can properly be said to have had “reason to know” of the substantial chance of its possible occurrence.

4. [1531]

   By reason of the Receiving Participants’ knowledge, deliberate blindness or reckless indifference to their entitlement to the payments received from the Insolvent Companies, the plaintiffs say that they are the paradigm example of a knowing recipient of money obtained in breach of fiduciary duty; and that this is exacerbated by the fact that the direct or indirect source of the funds with which they were paid (enabling the payment) was from an entity related to the Receiving Participant. (Pausing here, the claim against the defendants is for knowing assistance not knowing receipt.) However, it is said in the alternative that the Receiving Participants were clearly the beneficiaries of uncommercial transactions within the relation-back period in terms of s 588F of the Corporations Act (see further below).

Submissions and findings – AKA Parties

1. [1532]

   In the Earth Civil Proceeding, the plaintiffs claim that Michael Abou-Antoun, AKA Civil and AKA NSW were accessories to Gino Cassaniti’s breaches of duty (Earth Civil AKA Parties). In the Bluemine Proceeding, the plaintiffs claim that LAM Haulage, MAL Land Group, the Great Brothers, Andre-Abou-Antoun, Michael Abou-Antoun, AKA Civil, and AKA NSW were accessories to Gino Cassaniti’s breaches of duty (Bluemine AKA Parties).

2. [1533]

   I have referred above to the circumstances in which Andre Abou-Antoun was introduced to Banq; to the evidence as to the advice given in about June 2010 by Peter Abboud or Fred Khalil to set up a new company to deal with clients (T 626.37-45), in consequence of which, Banq arranged the incorporation of AKA Civil in June 2010 (Ex K at 10975); and to the events that followed in relation to the AKA companies’ accounting; the creditors’ voluntary winding up of both of Tip and Fill and ACN 121913488 (formerly, AKA Civil Contracting) in September 2010; and the incorporation of AKA Civil, AKA NSW, Earth Civil, MAL Land Group and the Great Brothers.

3. [1534]

   I have also set out above the evidence as to the Scheme Recommendation and its implementation insofar as it concerned the AKA Parties (see, in particular, Andre Abou-Antoun’s evidence at T 627.5-9; T 631.1-18). Andre Abou-Antoun’s evidence was that LAM Haulage was the asset-holding company within the group (T 634.1-10).

4. [1535]

   The plaintiffs maintain that the evidence given by Andre Abou-Antoun to the ATO was the truth. They place considerable weight on this as they say that this directly involves not only Peter Abboud and Fred Khalil (as proposing this arrangement) but also Gino Cassaniti (as the director of Bluemine and Earth Civil) and George Khalil (as the controller of RCG CBD’s bank account, noting that RCG CBD received 2.5% of the payments in fees).

5. [1536]

   Reference is made to the evidence of Andre Abou-Antoun in the hearing (referred to above) as to the advice given about the Scheme and the tax benefits by Peter Abboud and Fred Khalil and his understanding of that advice (see T 647.49-648.16; T 671.27-39; T 655.16-31). The plaintiffs say that the conversations attested to by Andre Abou-Antoun that he had with Fred Khalil and Peter Abboud identify that the intention of setting up or utilising Bluemine was to facilitate the Scheme, with the issuing of false and inflated invoices for the purpose of obtaining the tax savings that he was told by them would be obtained by the AKA Companies (see at T 649.14-26 and T 635.24-31). As to the involvement of Banq in the implementation of the AKA Group’s accounting systems, reliance is placed on the evidence set out earlier as to Banq taking care of all of the AKA family companies’ accounting from about June 2010 onwards, and Andre Abou-Antoun’s evidence that Banq had access to the AKA Group companies’ MYOB file (and his personal observation of the use of such access by persons at Banq).

6. [1537]

   The plaintiffs say that it is plain that all of the AKA transactions in the Bluemine Proceeding (i.e., the impugned payments involving the LAM Haulage transactions, the MAL Land Group transactions, The Great Brothers transactions and the AKA Civil and AKA NSW transactions) occurred as a result of the AKA Parties (through Andre and Michael Abou-Antoun) performing the arrangement as explained by Peter Abboud and Fred Khalil; and with the full knowledge of Gino Cassaniti, the director of Bluemine, and the full knowledge and concurrence of George Khalil. Similarly, they say that the impugned AKA Civil and AKA NSW transactions in the Earth Civil Proceeding were pursuant to an arrangement facilitated by Fred Khalil and Peter About but caused or permitted by Gino Cassaniti.

7. [1538]

   The plaintiffs say that it should not be accepted that Andre Abou-Antoun did not know at the time that the Bluemine invoices were exaggerated or inflated. Additionally, they say that it should be accepted that he regarded them at the time as fake and fabricated, pointing to his evidence to the ATO of the primary recommendation made to him by Peter Abboud and Fred Khalil as to the use of Bluemine and false and inflated invoices. The plaintiffs note that there were no genuine commercial documents evidencing any of these impugned transactions; and that Andre Abou-Antoun agreed in oral evidence that no such services were provided; and that the descriptions of those services in the invoices were false (see T 689.1-27 and T 688.12-50).

8. [1539]

   As to the benefits obtained by Andre and Michael Abou-Antoun and the AKA Parties in relation to the AKA Civil payments to Earth Civil, it is said that this was the amount of cash taken out of Earth Civil tax free. It is noted that, although Andre Abou-Antoun suggested at the ATO interview and again in Court (see T 681.15-684.34) that those funds were used to pay employees in cash, Andre Abou-Antoun was unable to identify to the ATO a single employee that was paid in cash, notwithstanding that a number of members of his family worked in the business (though in his evidence in Court at T 682.30-35 he suggested there were a couple of people that he paid during the period, being Richard and Julie); and that he was unable to produce any document identifying any such payments. The plaintiffs say that that evidence would not be believed in circumstances where Andre Abou-Antoun is unable to produce a single legitimate business record which corroborates the payments of purported cash wages (T 683.5-20). (Andre Abou-Antoun’s explanation as to why he could now remember some employees’ names was that previously he had been “on the spot” and that he had remembered “just through some of the work we’ve done recently”, which calls into question the reliability issues in relation to his evidence both before the ATO and in the Court (T 683.15-23). It is noted that Andre Abou-Antoun agreed (at T 684.25-36) that it was a truthful answer in the ATO interview when he said that he could not remember name of a single employee that had been paid with the cash.) The plaintiffs refer to Andre Abou-Antoun’s agreement that he took the money home and put it in the safe (for Andre Abou-Antoun, it is said that this must be put in context – and that it is not an admission that the money was used for personal purposes).

9. [1540]

   Pausing here, for Andre Abou-Antoun reference is made to the payroll ledger in evidence for Earth Civil (Ex K at 10338). The AKA Parties say that Earth Civil employed “real employees” in the AKA business and it is suggested that the “work we’ve done recently” to which Andre Abou-Antoun referred may have included reviewing the Earth Civil payroll ledger. Nevertheless, Andre Abou-Antoun accepted that the cash withdrawals amounted to some hundreds of thousands of dollars. If those amounts were paid in wages it might be expected that there would be records of some kind beyond simply a payroll ledger to corroborate this.

10. [1541]

    The plaintiffs say that the contention that Earth Civil’s cash was being used to pay employees is false and a clear demonstration that the cash remained in Andre Abou-Antoun’s pockets. They say that it is to be inferred (in the absence of any commercial documentation), coupled with the evidence of the purpose for those payments being to obtain taxation benefits and the absence of evidence of explanation, that Andre Abou-Antoun, Michael Abou Antoun and the AKA Parties obtained the benefits from the AKA Parties’ payments to Earth Civil (even though they accept that their evidence does not precisely identify that).

11. [1542]

    Other than the admission of withdrawing the money from Earth Civil, the plaintiffs say that Andre Abou-Antoun’s answer (at T 706.1-20) that when he withdrew the money he was not aware that it was being withdrawn immediately after it was paid in, was false and should not be accepted. It is said that the evidence Andre Abou-Antoun gave to the ATO was the truth; i.e., that Gino Cassaniti had told him to “just transfer the money and, then take the money out of the account after it was transferred”. It is submitted that both Andre Abou-Antoun and Michael Abou-Antoun knew, when the money was transferred to Earth Civil, that it would be paid away almost immediately.

12. [1543]

    It is said that the benefit that the AKA Parties obtained from the payments to Bluemine is that AKA Civil and AKA NSW were able to claim those payments as purported legitimate expenses, both for the purposes of their BAS and their income tax returns and claim the GST credit, in circumstances where there was no such provision of services; and were able to funnel that money from Bluemine to entities within the AKA Group, tax free.

13. [1544]

    The plaintiffs say that Michael Abou-Antoun and Andre Abou-Antoun knew that when they signed the BAS and tax returns lodged by AKA NSW and AKA Civil that they were claiming the false invoices issued by Bluemine as legitimate expenses in their returns. The plaintiffs say that Andre Abou-Antoun did so with knowledge that AKA NSW and AKA Civil were not entitled to those deductions and that those expenses were false, as was the information that he was providing to the ATO. The plaintiffs say that it is to be inferred that all of the impugned transactions involving the AKA Parties (see Tables 1.2, 1.3, and 5.2) were not genuine commercial transactions and that claiming a taxation benefit was false and dishonest.

14. [1545]

    Similarly, the plaintiffs say that Andre Abou-Antoun’s evidence (at T 708.16-49) that he recalled withdrawing money out of Earth Civil but could not specifically recall $100,000 being withdrawn on 8 October 2012 was false. The plaintiffs submit that this response is extraordinary in light of his evidence above that participation in the Scheme would provide a “tax benefit” to the companies (T 655.16-31) and that they would be “saving tax, the primary tax and – and the GST” (T 671.27-39) as part of a valuable opportunity (T 647.49-648.16).

15. [1546]

    The plaintiffs say that the documentary evidence reveals that AKA NSW, Michael and Andre Abou-Antoun gained the taxation benefits. In summary, it is said that, in the financial year 1 July 2012 to 30 June 2013, AKA NSW gained fraudulent GST benefits of at least $177,301.74. In addition, as a result of the payments to Bluemine recorded in the General Ledger as “management expenses other”, the $1,773,016.57 was part of the $2,411,718.30 total other management expenses. The total of $2,411,718.30 is recorded in the AKA NSW Profit and Loss as expenses. The plaintiffs say that it is to be inferred that this amount was included in the AKA NSW Company tax return (which was not produced pursuant to a Notice to Produce to Court, see Ex K at 56262) resulting in fraudulent income tax deductions of $1,773,016.57. It is said that the documentary evidence of the $1,950,318.31 benefit to AKA NSW confirms the evidence given by Andre Abou-Antoun that the AKA Parties were saving the primary tax (income tax) and GST as proposed as part of the valuable opportunity recommended by Fred Khalil and Peter Abboud.

16. [1547]

    As to the involvement of Andre Abou-Antoun and the AKA Parties in terms of fees and other benefits to the Primary Conspirators and associated entities, the plaintiffs say that, although there is no evidence of direct Earth Civil payments to Banq or the Primary Conspirators, the utilisation of Earth Civil (for example, Gino Cassaniti directing withdrawal of large amounts of cash) was part of the total arrangement that the Primary Conspirators made for the AKA Parties, to achieve tax benefits. It is said that that arrangement included the AKA companies, Bluemine and Earth Civil; and that, for this overall arrangement the Primary Conspirators’ fees (in effect, Banq’s fees) were 2.5% of the AKA/Bluemine transactions (see at T 692.17-24).

17. [1548]

    The plaintiffs note that when money was transferred as part of the round robin of transactions involving Bluemine, a corresponding payment was also made to RCG CBD, or an unknown entity, or cash was withdrawn in the exact percentage of 2.5% for the fee. They say that those fee payments are entirely consistent with Andre Abou-Antoun’s evidence as to the 2.5% fee that would be paid to the Primary Conspirators and that it is to be inferred that these payments of over $96,000 were for the benefit of the Primary Conspirators or others associated with them.

18. [1549]

    The plaintiffs say that there was no genuine commercial reason for the fee payments from Bluemine; that these payments could not have occurred without the knowledge of Gino Cassaniti, Fred Khalil, Peter Abboud and George Khalil (as the controller of the RCG CBD bank account); and that these payments were in furtherance of the conspiracy.

19. [1550]

    As to the creditors’ voluntary liquidations (a key feature of the Scheme according to the plaintiffs, that involved straw directors and “jump on” directors just prior to the liquidation of the companies), it is noted that three AKA Group companies were wound up by Banq prior to the liquidation of Earth Civil. The plaintiffs say that the only inference that can be drawn by the pattern of these events is that Andre and Michael Abou Antoun knew and expected that Earth Civil would be wound up owing debts to the Commissioner as they would have paid away the assets of the company. It is said that that was not a coincidence.

20. [1551]

    It is noted that Earth Civil has an outstanding taxation liability of $1,122,680.34; and that, notwithstanding the $965,000 paid away to Michael Abou-Antoun by Earth Civil, AKA Civil lodged a proof of debt in the liquidation of Earth Civil for $100,000 in unpaid invoices (Ex K at 52169). It is noted that no invoices from AKA Civil to Earth Civil have been produced to the liquidator by the AKA Group. AKA Civil appointed Fred Khalil as its proxy in respect to the liquidation of Earth Civil (Ex K at 52163). The plaintiffs say that it is to be inferred that these documents were executed by the AKA Parties on the advice of the Primary Conspirators in furtherance of the conspiracy.

21. [1552]

    The plaintiffs say that it is also to be inferred that the AKA Parties also expected that companies involved in the Scheme transactions (namely, Bluemine and RCG CBD) would also be wound up in insolvency owing debts to the Commissioner. When coupled with Andre Abou-Antoun’s evidence as to (what the plaintiffs say were false) invoices, where no services were provided by Bluemine and payments were made to RCG CBD as a fee for participation in the Scheme, the plaintiffs say that this inference is obvious. The plaintiffs say that Andre Abou-Antoun’s evidence in relation to his knowledge of tax deductions for false or inflated invoices was obfuscatory at best (see their submissions earlier as to his credibility).

22. [1553]

    The plaintiffs contend that all of the conduct referred to above involving Andre and Michael Abou-Antoun, Gino Cassaniti and Bluemine would not have occurred in the absence of the Scheme; that it did not occur by accident; and that, on the whole of the evidence, it is established that the conduct occurred, and was orchestrated and implemented throughout by Gino Cassaniti, Fred Khalil, Peter Abboud and George Khalil in furtherance of the conspiracy.

23. [1554]

    At the outset, the AKA Parties submit that a significant issue in the respective Proceedings is as to whether, and to what extent, the plaintiffs’ claims, if made out, can be fairly attributed and quantified to each defendant. They say that the tax liabilities of the Insolvent Companies may well change depending upon how the ATO allocates payments it receives from the defendants in respect to their own tax liabilities that concern the same moneys upon which any of the Insolvent Companies has been assessed. It is suggested that, if the plaintiffs are successful in the Proceedings, a separate damages enquiry proceeding may be required (see as in BCI Finances Pty Ltd (in liq) v Binetter (No 5) [2017] FCA 1524). Pausing here, the suggestion of a separate damages enquiry was not pursued in any detail in oral submissions and it is not clear to me that it would be necessary – if there is to be adjustment as between amounts recoverable from different defendants, the plaintiffs have indicated a willingness to make such adjustments.

24. [1555]

    In summary, the AKA Parties submit that the plaintiffs’ evidence at its highest gives rise to no more than a series of “tenuous” inferences that the AKA Parties may have been knowing or reckless participants in an alleged conspiracy supposedly orchestrated by Banq and its principals. They say that even if Banq and its officers, agents, employees and/or shareholders, conspired with each other in the manner contended by the plaintiffs, that does not of itself prove that third parties joined in any unlawful agreement, either knowingly or with any relevant degree of reckless indifference.

25. [1556]

    It is noted that the only existing creditor of the Insolvent Companies is the Commissioner. It is submitted that it could not have been reasonably conceived of, or anticipated by, either the Paying AKA Parties or the Receiving AKA Parties that there could be a risk that the Insolvent Companies could be assessed for moneys to which those entities were never beneficially entitled under circumstances (if this be shown to be the case) where those moneys merely passed through the Insolvent Companies destined for an entity related to the Paying company; and it is said that the three step process described (at [84] of the plaintiffs’ opening submissions) would not be obvious to the objective reasonable person.

26. [1557]

    The AKA Parties say that there is no evidence (or no sufficient evidence) that: the AKA Parties had any knowledge of or involvement with the financial affairs of Bluemine from which it could be inferred that they could have reasonably suspected that Bluemine was or could become insolvent; that any of the AKA Parties themselves intended or had any knowledge of any plan which may have existed on the part of Banq to cause Bluemine or Earth Civil to become insolvent or upon which any such intention or knowledge may be inferred; or that any of the AKA Parties intended or had any knowledge of any plan which may have existed on the part of Banq to put Bluemine or Earth Civil into voluntary administration; nor (they say) is there any evidence upon which such intention or knowledge may be inferred.

27. [1558]

    The AKA Parties note that the plaintiffs claim against the Earth Civil AKA Parties as follows: against Michael Abou-Antoun, for money had and received to the use of the plaintiff (restitution to prevent unjust enrichment) (Earth Civil Restitution Claim) and for equitable or statutory compensation: against Michael Abou-Antoun, AKA Civil and AKA NSW, for being accessorially liable for breaches of duty by Gino Cassaniti, the de jure director of Bluemine during the period the relevant transactions; or in the alternative against Michael Abou-Antoun for his breaches (as a de facto or shadow director of Earth Civil) of fiduciary and statutory duties (together the Earth Civil Breach Claims); against Michael Abou-Antoun, for unreasonable director-related transactions (s 588FDA Claim); and against Michael Abou-Antoun for uncommercial transactions (s 588FB Claim).

28. [1559]

    The AKA Parties make similar submissions in relation to the common claims.

29. [1560]

    In the Bluemine Proceeding, the AKA Parties identify (and then address) the following five factual propositions on which findings are sought by the plaintiffs (other than those concerning the existence of a conspiracy).

30. [1561]

    First, that the invoices issued by Bluemine to AKA Civil and AKA NSW were false invoices, in that they purport to be in respect of goods or services that were never provided. Second, that no consideration was given or received (no goods or services provided) in exchange for the payments to Bluemine during its corporate life. Third, that the transactions nevertheless occurred (both inbound and outbound). Fourth, that Bluemine was only ever a “money transaction unit”. Fifth, that Bluemine was never beneficially entitled to the funds it received from the Paying Participants. It is said that, on the plaintiffs’ case, Bluemine was obliged to pay the funds out to the AKA Receiving Entities and Bluemine was entitled to retain a fee. The AKA Parties submit that certain legal consequences necessarily follow (see below) if findings consistent with the above five factual propositions are made.

31. [1562]

    As to the claims relating to the AKA Parties’ alleged knowing involvement in breaches of duty by one or more persons said to be the director of Bluemine, the AKA Parties raise a number of defences (some of which, such as the joint release defence and causation defence, I deal with in common with the same defences raised by other defendants later in these reasons).

32. [1563]

    As to their substantive defences to the claims for accessorial liability, the AKA Parties say that the evidence does not sustain a finding: that there existed a conspiracy amongst two or more of the Primary Conspirators whereby they would engage in the conduct described in the plaintiffs’ closing submissions at [241]; that whatever conduct is found to have been engaged in by one or more of the Primary Conspirators, that conduct amounts to a “dishonest and fraudulent” design or was otherwise in breach of any fiduciary or statutory duty owed to Bluemine by one or more of those persons; Gino Cassaniti was a director of Bluemine; that Gino Cassaniti breached any fiduciary or statutory duty to Bluemine; or that one or more of the AKA Parties had sufficient knowledge or understanding of, or involvement in, the dishonest and fraudulent design pleaded, on the part of the director of Bluemine, such that they should be held accessorially liable for any such breach of duty.

33. [1564]

    Further, the AKA Parties say that: the alleged breaches of duty, if they occurred, did not cause the loss complained of for the purposes of an award of equitable compensation; there was no compensable loss (submitting that a tax liability may not be an appropriate reference point for the calculation of an award of equitable compensation where Pt IVC rights subsist and that it should be concluded on the balance of probabilities that, if an objection under Pt IVC were lodged, it would be allowed); and, in the alternative, that any award of equitable compensation would be in an amount less than that which has been claimed.

34. [1565]

    The AKA Parties make the following submissions in this regard.

35. [1566]

    The AKA Parties adopt and rely upon the submissions of Gino Cassaniti (see above) to the extent that those submissions are to the effect that it should not be found that he was a director of Bluemine. The AKA Parties also point to the following matters in that regard.

36. [1567]

    It is said that, for the AKA Parties to be liable under the second limb of Barnes v Addy, there must be dishonesty on the part of the fiduciary (not someone else, unless that person was acting in accordance with the instructions or wishes of the fiduciary). Reference is made to the evidence given by Andre Abou-Antoun (said to be unchallenged) that he and Michael Abou-Antoun only dealt with Peter Abboud and Fred Khalil in respect of Bluemine; and that it is not submitted by the plaintiffs that either Peter Abboud or Fred Khalil was ever a director of Bluemine. It is noted that the plaintiffs’ submission is that Fred Khalil could only have made the Scheme Recommendation to Andre or Michael Abou-Antoun if he had been working “hand in glove” with Gino Cassaniti (the plaintiffs asking for an inference to this effect) (see plaintiffs’ closing submissions at [419]-[422]).

37. [1568]

    Insofar as the plaintiffs rely, for the conclusion that Gino Cassaniti had sufficient control over Bluemine to be deemed a de facto or shadow director on the drawing of an inference from the evidence given by Andrew Barsa to the effect that he went to Gino Cassaniti when he determined to resign his directorship of Bluemine, the AKA Parties say that a more likely inference, when considered with the totality of Andrew Barsa’s evidence, is that Andrew Barsa sought professional advice from Banq about resigning as a director, or he directed Banq, who he knew was managing Bluemine’s accounting and other affairs (because he had delegated that authority), to cause him to be removed as a director.

38. [1569]

    Pausing here, I do not consider that to be the more likely inference considering the totality of the evidence. As already noted, it is clear from the evidence that Andrew Barsa was not carrying on any real directorship functions, and Andrew Barsa’s evidence is not that he sought “professional advice” but, rather, that he mentioned “to Banq and Gino that [he] wanted to come off and resign”, that Gino Cassaniti said “fine”, and that someone from Banq then told him that he was removed (T 914.39-5; T 915.21-22). This interaction more easily draws the inference that Andrew Barsa was not able simply to remove himself as director and that he needed permission from Banq and Gino Cassaniti. Moreover, the apparent ease with which Andrew Barsa was removed and Gino Cassaniti appointed as director, combined with the minimal role Andrew Barsa played at Bluemine, suggests that Gino Cassaniti was always in control of Bluemine. As to the suggestion that Andrew Barsa went to Banq to direct it to cause him to be removed as a director, it seems to me significant that it was Gino Cassaniti who he approached at Banq.

39. [1570]

    The AKA Parties appear to accept that Andrew Barsa did fully delegate (or abdicate) his responsibility as a director of Bluemine. However, it is submitted that there is insufficient evidence to support a finding that he abdicated that responsibility to Gino Cassaniti, instead of to any one or more of Peter Abboud, Fred Khalil, someone else at Banq Accountants, or either George Abboud (whose trucks were said to be in need of asset protection) or Michael Abboud (who the AKA Parties point out was the person, according to Andrew Barsa, who ran the company). (However, I interpose to note that, as I understand it, Andrew Barsa said Michael Abboud was running the trucking business (i.e. he “delegated the responsibility of the business side of things with the trucks to Michael Abboud because he's been in the industry for a long time” (emphasis added)), which I do not think equates to “running” Bluemine, as such.)

40. [1571]

    Insofar as the plaintiffs refer to the evidence of Andrew Barsa that “they” [Banq] “managed everything” and that he spoke to a variety of people at Banq in respect of Bluemine, the AKA Parties emphasise that not once did Andrew Barsa say that he acted in accordance with the wishes of Gino Cassaniti in respect of Bluemine (and that, to the contrary, his evidence is that he delegated the accounts of Bluemine to Banq and that operational control was with Michael Abboud).

41. [1572]

    The AKA Parties say that the plaintiffs’ case in respect of the claims against them for accessorial liability for breach of fiduciary or statutory duties depends upon Gino Cassaniti being established to be a de facto or shadow director of Bluemine; that there is not enough evidence to conclude that Gino Cassaniti was a director of Bluemine; and that, whatever others may have caused Bluemine to do or not to do, or whatever design those others may have had, those others are not alleged to have been directors of the company. The AKA Parties thus submit that the plaintiffs’ case in the Bluemine Proceeding based on accessorial liability fails on this issue (i.e., that the plaintiffs have not proved that Gino Cassaniti was a director of Bluemine.

42. [1573]

    The AKA Parties repeat the above submissions and adopt the submissions of Ivana Cassaniti on this issue.

43. [1574]

    Insofar as the plaintiffs place significance (and say it was not coincidental) on essentially the same “structural advice” being given to Andre and Michael Abou-Antoun as was given to others (in substance to incorporate new companies to each operate in differing capacities), the AKA Parties say that the substance of this advice is a common form of asset protection advice given to a business once it reaches a certain size. The AKA Parties submit that no inferences should be drawn from the coincidental structural advice (if it is found that such advice was given) nor should it be concluded that the existence of the alleged conspiracy is more likely due to commonplace structural advice being given.

44. [1575]

    The AKA Parties maintain that it has not been established that the AKA Parties had knowledge, sufficient to meet the standard necessary for accessorial liability, of the essential elements of the alleged dishonest and fraudulent design (i.e., the conspiracy). In this context, it is submitted that no adverse inferences (under the principles in Jones v Dunkel or otherwise) should be drawn, on the basis that Counsel for the AKA Parties was unable to re-examine Andre Abou-Antoun to clarify matters (for reasons discussed in Song v Ying (2010) 79 NSWLR 442; [2010] NSWCA 237 at [28]).

45. [1576]

    The AKA Parties accept that, for the purposes of Barnes v Addy liability, it need not be shown that the fraudulent scheme of the fiduciary be “fully known” to the AKA Parties. However, they say that the plaintiffs still need to prove the AKA Parties knew facts sufficient to form a general understanding that there was “a fraud” or that they had “actual knowledge of facts which would tell of fraud to a reasonable man” (noting that the “fraud” here is that defined in the plaintiffs’ closing submissions at [241]). Similarly, it is said that, for the purpose of liability under s 79, the plaintiffs must show that the AKA Parties had actual knowledge of the essential facts, including each element in plaintiffs’ closing submissions at [241] and that each of those elements was the design of the director of Bluemine.

46. [1577]

    It is said that, even if the AKA Parties are shown to have obtained (at least in the first instance) tax benefits to which they were not otherwise entitled (which is not admitted), that does not ground the fraud of which complaint is made, since that fraud (the subject of the alleged dishonest and fraudulent design) is to defraud the companies themselves, and for those companies not to be able to meet their tax obligations, thereby depriving the Commissioner and the Commonwealth of funds the subject of assessments the Commissioner would eventually issue.

47. [1578]

    It is submitted that the plaintiffs have not established knowledge of those essential elements to the requisite degree for purposes of both accessorial liability under Barnes v Addy and liability under the provisions of the Corporations Act.

48. [1579]

    The AKA Parties say that there is no evidence that they, through their principals, Andre and Michael Abou-Antoun, had any knowledge (in the requisite sense) of any plan on the part of the Primary Conspirators which may have existed: to denude the Insolvent Companies of assets; “whilst knowing that the company was highly likely to incur tax liabilities”; to wind Bluemine up having left it insolvent with no ability to pay taxation obligations; and to wind Bluemine up leaving it exposed to default assessments, penalties and interest.

49. [1580]

    As to the question of knowledge of a plan to denude the Insolvent Companies of assets, the AKA Parties say that such a suggestion would be “curious” given that the design alleged by the plaintiffs includes a fee component. (This seems to me to be a non-sequitur, since the fee was taken from the impugned payments and therefore the payment of a fee is not on its face inconsistent with a plan to denude the companies of assets – since such a fee could readily be paid away, as it seems to have been.)

50. [1581]

    As to the question of knowledge that the Insolvent Company was highly likely to incur tax liabilities, the AKA Parties accept that (as a general matter of common experience), anyone could reasonably assume that most companies doing business incur tax liabilities. However, they say that there is no evidence that the AKA Parties had the requisite level of knowledge of this aspect of the alleged dishonest design. It is submitted that it could not be suggested that the AKA Parties would have acted “knowing” of some high probability that the company would incur tax liabilities other than those ordinarily incurred by a company; or that they could be expected to know that the Commissioner would assess on a financial statement basis, ignoring outflows, rather than on an income derived basis. (I would accept that in the absence of some specialised accounting knowledge, the highest that the AKA Parties would be expected to have been aware would be that some tax liabilities might be likely to be incurred as a result of the transactions, as would not be unexpected as a matter of ordinary business experience.)

51. [1582]

    As to the question of the third of those matters (i.e., that the plan was to wind Bluemine up having left it insolvent with no ability to pay taxation obligations), it is submitted that if, objectively speaking, the AKA Parties were aware at the time that Bluemine was charging fees but not providing any service other than acting as a conduit, then the plaintiffs have not disproved that the reasonable assumption of a person in the AKA Parties’ position would be that Bluemine would incur income tax on the Fee Amounts. It is noted that Andre Abou-Antoun gave evidence (corroborated it is said by Andrew Barsa’s evidence) that he believed Bluemine had trucks and tipping sites; and therefore, it is submitted that the plaintiffs have not demonstrated that Andre Abou-Antoun could have reasonably concluded that Bluemine would be likely to be left insolvent and would be wound up. It is said that there is no evidence that the AKA Parties had any knowledge that Bluemine may not have been keeping proper accounts and records.

52. [1583]

    As to the question of knowledge of any plan to wind Bluemine up, leaving it exposed to default assessments, penalties and interest, it is submitted that there is no evidence upon which to ground a finding (or even a reasonable inference) that the AKA Parties had knowledge of a design which included Bluemine not lodging tax returns disclosing its taxable income or not lodging correct BAS returns.

53. [1584]

    In respect of the above matters, it is said that the plaintiffs rely entirely upon inferences to be drawn from Banq being the tax agent assisting with the winding up of three entities related to Andre Abou-Antoun and Michael Abou-Antoun in September 2010 and October 2012. The AKA Parties say that it does not follow (assuming that to be correct) that the inference would be drawn that Bluemine, an entity entirely separate from the AKA Parties in terms of shareholders and directorships, was also intended to be placed into administration.

54. [1585]

    Insofar as the plaintiffs rely on Andre Abou-Antoun’s knowledge of the falsity of invoices (and leaving aside the timing issue in relation to that knowledge which I address below), the AKA Parties say that, even assuming that Andre Abou-Antoun had that knowledge at the relevant time, that does not provide a basis to infer (or for Andre Abou-Antoun to have predicted) that there was a design in place which included winding Bluemine up.

55. [1586]

    The AKA Parties therefore say that there is no sound basis upon which to infer that the AKA Parties knew (or knew of circumstances sufficient to indicate to a reasonable person) that Bluemine would not be able to meet its tax liabilities or to predict that the Commissioner would issue a default assessment on the “financial statement analysis basis” disallowing all claimed deductions and imposing administrative penalties of 75%.

56. [1587]

    I have referred above to the “timing issue” as to Andre Abou-Antoun’s knowledge about the nature of what the plaintiffs submit occurred with respect to Bluemine. The AKA Parties say that it should not be accepted that this knowledge was acquired contemporaneously with the transactions, pointing to the evidence given by Andre Abou-Antoun at the hearing that he came to understand certain aspects of the AKA Parties’ relationship with Bluemine and Earth Civil after the fact (during the course of an ATO audit of the AKA Group of entities, which was still ongoing at the time of his evidence). It is said that this is entirely consistent with the evidence Andre Abou-Antoun gave to the ATO during his compulsory interviews.

57. [1588]

    The AKA Parties say that it is an ordinary quality of human experience that people will superimpose current knowledge over past events (not dissimilar, perhaps, from the recognition of the fallibility of human memory referred to in Watson v Foxman (1995) 49 NSWLR 315 at 319 per McLelland CJ in Eq). As noted above, the AKA Parties submit that it should not be concluded that Andre Abou-Antoun’s evidence in Court was dishonest. It is said that his evidence was consistent with that which he gave in his ATO interviews (reference being made to the extracts and submissions contained in schedules in Appendices B and C to the AKA Parties’ submissions). It is said that it makes sense that Andre Abou-Antoun would try to clear things up about what was said in the interviews that do not accord with the propositions that were being put to him by the plaintiffs.

58. [1589]

    The AKA Parties say that, aside from there being no evidence of his knowledge of the essential elements of the conspiracy, if Andre Abou-Antoun’s evidence that he learned after the fact about significant aspects of what the plaintiffs say is the dishonest scheme is accepted, then the knowledge requirement will not have been met in respect of Andre Abou-Antoun or the entities of which he is a director (including LAM Haulage and The Great Brothers); those aspects of later-acquired knowledge including: false (exaggerated or inflated) invoices; that the only service provided by Bluemine was “very, very, very small and only one”; and the tax benefits to AKA Civil and AKA NSW and the “value” of entering into the transactions.

59. [1590]

    As noted above, it is submitted that there is no evidence (and no available inference) that the AKA Parties knew at the time (or even after the fact) about any plan to liquidate Bluemine or, further, to do so with significant tax liabilities; or that the Commissioner of Taxation could issue default assessments on the “financial statement analysis” and impose stringent penalties for failure to give information and for false and misleading statements.

60. [1591]

    With respect to the falsity of the invoices, it is said that Andre Abou-Antoun accepted that management and supervision services were not provided but not necessarily that he understood at the time that that meant the invoices were “false”. It is said that, from his perspective, services of some sort were being provided by the accountants to facilitate the purchase of properties which is said to be entirely consistent with what he said in his ATO interviews. Pausing here, as I have already noted, Andre Abou-Antoun’s evidence in the witness box was confused and I found him in that regard to be an unreliable witness. However, I place some weight on the fact that at the time of the ATO interview he made clear that he was answering at least one of the questions based on what he could remember from the relevant time; moreover the fact that he accepted that management and supervision services were not being provided or not being provided to any great degree (and he must have been aware of that at the relevant time) is significant insofar as it would surely have put an honest and reasonable person on enquiry as to what those invoices actually related. The explanation that property services were being provided (which appears to be an ex post facto justification or explanation for the payments rather than his stated understanding at the time) does not explain why no query was raised at the time about invoices for large sums for management and supervision services that he knew were not being provided.

61. [1592]

    As to those matters about which it is said it is unclear whether Andre Abou-Antoun knew at the time or learned later on, these include the fee or commission to Bluemine (which the AKA Parties say it appears from his evidence that he agreed he discovered a fee “during the course of the transactions”).

62. [1593]

    The AKA Parties say that the matters which Andre Abou-Antoun agreed he knew about at the time of the transactions include: that AKA Civil or AKA NSW would pay money to Bluemine and that Bluemine would pay money to another AKA Party (such as LAM Haulage, MAL Land Group or The Great Brothers) to purchase property, for example, in St Mary’s; that, in respect of Bluemine, those payments would be made following receipt of an email from Banq, as per the advice of Banq (the emails attached invoices; however, it is noted that Andre Abou-Antoun’s evidence was that he did not bother looking at the invoices other than to identify the amount to be paid, because he understood the money would “always come back”); and that the money paid out would always come back to an AKA related entity.

63. [1594]

    The AKA Parties say that the “known” matters do not constitute sufficient knowledge of what is said by the plaintiffs to be the fraud (i.e., that described in the plaintiffs’ closing submissions at [241] and the third further amended statement of claim at [131]).

64. [1595]

    It is submitted that, from what appears in Appendices B and C, it would not be found that Andre Abou-Antoun was being deliberately obtuse or lying to the Court. It is said that his evidence in Court was consistent in all material respects with what he said in his ATO interviews; and that any inconsistency is explained by the “timing issue”. Pausing here, I have made no finding that Andre Abou-Antoun was deliberately lying or guilty of obfuscation in the witness box. However, he was hopelessly confused and inconsistent in his evidence (and therefore inherently unreliable) and to my observation he displayed a tendency when under pressure to “shut down” – see for example at T 667.17ff when he suddenly requested a break (confronted with inconsistent answers in his ATO transcript) and said he was “getting very drained out and exhausted”, was starting “to get a bit dizzy” and really needed to take a break because he was “not feeling really well”. To my observation, he took refuge in blaming others when faced with inconvenient inconsistencies in his evidence (see his suggestion that the transcript was not accurate and his comment that he was not satisfied with his legal representation at the time of the ATO interview).

65. [1596]

    In any event, it is said by the AKA Parties that, even if aspects of Andre Abou-Antoun’s evidence are rejected, the plaintiffs still have not proved the requisite knowledge of the material aspects of the conspiracy for him or the entities of which he is or was a director, to be liable for any breaches of duty by the director of Bluemine.

66. [1597]

    As to the knowledge of Michael Abou-Antoun, the AKA Parties say that no adverse inference should be drawn from the fact that Michael Abou-Antoun did not go into evidence in these Proceedings. As already noted, Michael Abou-Antoun claimed self-incrimination at the pleading stage of the Proceedings, resulting in him (personally and on behalf of entities over which he is or was a director) not being required to plead to certain paragraphs of the statements of claim in the Earth Civil and the Bluemine Proceedings, including those paragraphs dealing with the fraud alleged. It is said that the fact that he did not go into evidence is consistent with that claim, as he could not voluntarily give evidence with the protection of a certificate under s 128 of the Evidence Act. The AKA Parties say that the procedure adopted for Andre Abou-Antoun was unusual, and overcame difficulties associated with the plaintiffs’ proposed tender of compulsory transcripts, which the AKA Parties submitted would, if freely admitted, impermissibly interfere with the accusatorial process of criminal justice.

67. [1598]

    The AKA Parties otherwise rely upon the fact-finding principles set out in Appendix A to their submissions (at [10]-[26], [31]-[37]) concerning inferences which may or may not be drawn against a person claiming the privilege.

68. [1599]

    Specifically, in response to the plaintiffs’ submissions as to their knowledge, the AKA Parties said the following.

69. [1600]

    First, that knowledge that three companies associated with Andre and Michael Abou-Antoun were wound up by way of a creditors’ voluntary winding up while Banq was their tax agent does not give rise to an inference that Andre or Michael Abou-Antoun knew that Bluemine (a company with which they were not associated in the Corporations Act sense) would later be wound up by others. I agree. I cannot infer from the fact that certain of the AKA companies were wound up while Banq was their tax agent (Tip and Fill, ACN 121913488 (formerly, AKA Civil Contracting) and then later Earth Civil) that the Abou-Antoun brothers were on notice of any plan to wind up other companies associated with Banq.

70. [1601]

    Second, again, that there is nothing unique or unusual about the “structural advice” that it is said Banq gave to the AKA Parties; rather, that this kind of advice is a common form of asset protection advice given to businesses by advisers once an enterprise reaches a certain size; and that nothing can be inferred about the giving of such advice. The AKA Parties further submit that no inferences would be drawn from the giving of coincidental structural advice to other companies, nor should it be concluded that the conspiracy alleged is more likely due to the commonplace structural advice given.

71. [1602]

    Pausing here, the coincidence of the giving of such advice (and there is no doubt in my opinion as to the coincidence of such advice, albeit that there were what might be called some “variations on a theme”), as to the structuring of the group companies, goes to my mind to different issues as to the involvement in particular of Gino Cassaniti in the affairs of various of the Insolvent Companies. More significant is the way in which the invoicing occurred and the coincidence of large payments without documentation or credible commercial explanation in what seems to be often a round robin of transactions. Again, however, the AKA Parties were not on notice of what advice was being given to other clients; so any such knowledge could not be inferred on their part.

72. [1603]

    Third, it is not contested that Banq was the registered tax agent for the AKA Parties (and the AKA Parties were aware of this).

73. [1604]

    Fourth, as to the evidence that Andre Abou-Antoun spoke to Michael Abou-Antoun about a conversation Michael Abou-Antoun had with Fred Khalil, it is noted by the AKA Parties that that the evidence of this conversation was limited to the fact of a conversation having occurred and not the truth of those matters. Pausing here, the fact that Andre Abou-Antoun deposed to his brother having conveyed such a conversation to him at least establishes that Andre Abou-Antoun was being told at the time certain matters (whether or not they were true) and hence his state of knowledge (and whether he was on notice of matters that would put a reasonable and honest person on enquiry for the purposes of the fourth category of Baden Delvaux knowledge) must be assessed on the basis that this was what his brother told him had been the advice conveyed to his brother. Michael Abou-Antoun did not give evidence to dispute this conversation (though, as already noted above, it is said that no adverse inference can be drawn against Michael in this regard).

74. [1605]

    Fifth, as to the evidence that Andre Abou-Antoun gave in his ATO interview (see above) to the effect that Peter Abboud and Fred Khalil approached “us” and said they could arrange inflated and exaggerated invoices, which would be paid and that they would return the money back less a fee, it is submitted, that this evidence should be interpreted through the lens of the timing issue, to which I refer above (and as set out in Appendices B and C to the AKA Parties’ closing submissions, which I do not here reproduce). Additionally, it is noted that the interviews with the ATO where the above was recounted occurred in 2018, some five years after the actual events, and in the course of an audit of the AKA Group concerning tax liabilities of the Group which Andre Abou-Antoun was trying to resolve, after engaging PwC for that purpose. It is said that Andre Abou-Antoun has been consistent in saying that he came to understand these matters well after the fact.

75. [1606]

    Pausing here, the difficulty I have with that last submission is that in Andre Abou-Antoun’s answer at 60 of the ATO transcript he makes clear that he was “answering this [a question as to the moneys that were transferred being returned back to other entities in the AKA Group] to the best of [his] memory on what [he] remember[ed] back then”. It was in the context of that answer that he said “during the course of – of the period of time” that “they told us” about the inflated invoices and tax benefits. Unfortunately, there is a degree of revisionism in Andre Abou-Antoun’s now evidence that this was not his recollection of events at the relevant time.

76. [1607]

    Sixth, that there was a valuable opportunity characterised by tax benefits flowing from false invoices. It is submitted that there was no such conversation with Fred Khalil or Peter Abboud and Andre Abou-Antoun (see my comments above and see below).

77. [1608]

    Seventh, that Banq had access to the AKA Group companies’ MYOB. This is not contested.

78. [1609]

    Eighth, that Banq gave directions for the payments in from the AKA Paying Entities and out to the AKA Receiving Entities. It is said that there was some confusion about what Andre Abou-Antoun understood “direction” to mean; and that it was clarified in the course of the hearing that it meant for the internal accountant to cause the payment “actually [to] get paid”.

79. [1610]

    The AKA Parties say that (by reference to the evidence as to directions) that the plaintiffs are relying on evidence Andre Abou-Antoun gave in his ATO interviews (see plaintiffs’ closing submissions [1082]) which in cross-examination he explained was information he learned after the fact.

80. [1611]

    Pausing here, Andre Abou-Antoun’s evidence (again given in a highly confused fashion) seemed to me, properly understood, to be to the following effect. First, that Peter Abboud had given advice as to the relationship between AKA Civil and AKA NSW and at least in general terms for the transfer (at least in principle) of funds between those companies. Andre Abou-Antoun referred to advice “to set up our companies and do that would be from Banq Accountants”, expressly there referring to the initial explanation from Peter Abboud (see T 634.34ff). He then said that it would be “we” (presumably meaning he and Michael Abou-Antoun) who would approve payments but that he, Andre Abou-Antoun, never personally made any actual payments himself – that being done by the internal accountants in the AKA Group (including someone called Dillon). Where the confusion arose was that he said that internal accountant would “naturally by default” make the payments “because that was his job that’s what he did” and he confirmed that there was a distinction between approving a payment and the making of the payment. What was not clarified (but would be consistent with the above evidence) was that the general invoicing structure (or direction that payments would go between companies) was given or explained by Banq (specifically by Peter Abboud). Understood in that way it is consistent with the transfers between companies being as advised by Banq but the internal mechanism for transfers being handled by the internal accountants (which makes sense). What would not make sense would be that some internal accountant “naturally by default” knew when and how much to transfer between companies or to issue invoices between the companies.

81. [1612]

    What Andre About-Antoun seemed to me to be confused about (both in his ATO interview (at 60) and in Court (T 656) was as to what the tax benefit would be or how it would arise or be calculated. He did not accept that the Scheme was attractive because of the tax deductions but he accepted that he probably said that in his ATO interview; and he accepted that in the interview he said that there would be inflated or exaggerated invoices and said that that was the best answer he could give at the time “due to the knowledge [he] had of the matter”. It seems to me that Andre Abou-Antoun’s resistance was largely to the proposition that he understood about the tax deductions not that he did not understand that there would be inflated or exaggerated invoices (although I accept that he ultimately was adamant that that was his understanding “now”).

82. [1613]

    Ultimately, the position with Andre Abou-Antoun was that he knew that there was not much, if anything, being provided by way of management or supervision services and he understood (whether from what his brother, Peter Abboud or anyone else at Banq had said or otherwise) that there would be some form of tax benefit to the transaction (or perhaps that this would be the most tax effective structure – although I doubt that he thought that precisely about it) and he had a recollection of a reference of some kind to inflated or exaggerated invoices but he did not understand the mechanics of any of that. To my mind, that is knowledge that would put an honest and reasonable person on enquiry as to the dishonest and fraudulent design (i.e., Baden Delvaux notice in the third and fourth categories).

83. [1614]

    As to the remaining matters identified in the plaintiffs’ closing submissions (up to [1105]) that go to tax benefits and fees paid to Banq, the AKA Parties refer to their closing submissions at Appendix B. I have considered those and addressed them either in dealing with the issues as to Andre Abou-Antoun’s credit or above.

84. [1615]

    Finally, insofar as the matters relied upon by the plaintiffs (see at plaintiffs’ closing submissions [1106]-[1107]) relate to matters concerning the eventual winding up of Bluemine, the AKA Parties again submit that an inference of knowledge as to this aspect of the pleaded conspiracy is not open. The AKA Parties say that the natural and probable consequences of the alleged actions of the director of Bluemine (if found to have occurred) to cause the company to issue purported invoices with the effect that funds paid into the company appeared to be in respect of services provided, and then to pay those moneys out to a related entity, to a third-party observer, do not reasonably include: seeking to wind up the company with outstanding debts to the Commissioner of Taxation; failing to lodge tax returns (even though the due date for those returns had not arrived by the time of the creditors’ winding up in August 2013); failing to prepare and lodge accurate BASs; default assessments under s 166 (which include: assessing income on the financial statement analysis; and imposing administrative penalties of 75% for failure to file a return and for giving false or misleading statements in a document).

85. [1616]

    It is submitted that no reasonable person in the circumstances of the AKA Parties could have known these things were intended (if they were intended) by the director of Bluemine and it should not be inferred that they did have that knowledge.

86. [1617]

    Pausing here, insofar as emphasis is placed in this context on the content of the tax assessments or the penalties that were issued, I do not accept that the alleged accessory needed to know or understand how a tax assessment might issue. It seems to me sufficient to give rise to the requisite knowledge that an alleged accessory be on notice of fact that would indicate to an honest and reasonable person a risk that tax assessments might issue and that, if money was paid out of the companies (as it was apparently always intended it would be – in that Andre Abou-Antoun accepted that he understood it was always to be paid back) then the companies would be at risk of being unable to meet those tax liabilities and that penalties might then be imposed.

87. [1618]

    The Earth Civil AKA Parties in respect of the Earth Civil breach claims submit that the plaintiffs have not proved that Michael Abou-Antoun was a director or shadow or de facto director of Earth Civil and, as such, he did not owe any duties to Earth Civil; and they say that the plaintiffs have not proved that Michael Abou-Antoun had knowledge sufficient to be liable as an accessory to any breach or contravention of duty by Gino Cassaniti, who was the sole director of Bluemine as per the ASIC Form from 1 July 2012 to 18 March 2014).

88. [1619]

    As to the breach claims, the Earth Civil AKA Parties summarise the evidence of Andre Abou-Antoun concerning Earth Civil as follows: that he could have been a signatory on the account, but he was not sure (as to which it is noted that the account authorisation documentation in evidence reflects only Michael Abou-Antoun as a signatory; not Andre Abou-Antoun); that he had a conversation with Michael Abou-Antoun concerning a conversation Michael Abou-Antoun had with Gino Cassaniti (as to which it is noted that this evidence was admitted only for the fact of the conversation and not for its truth); that Andre Abou-Antoun did not speak to Gino Cassaniti about Earth Civil’s affairs, or about withdrawing money from its bank account (as to which it is submitted that Andre Abou-Antoun should not be disbelieved – see Appendix B to their submissions, item 12); that Andre Abou-Antoun and Michael Abou-Antoun withdrew cash amounts and those amounts were paid to employees in wages (as to which it is said that Andre was candid about withdrawing money to the effect that Andre Abou-Antoun was directed to do so by his brother and that the money went into the safe to pay wages and other business expenses; and it is submitted that his evidence is consistent with what he said to the ATO); that Andre Abou-Antoun did not understand, at the time, that Earth Civil may have tax liabilities in respect of the money being paid in (as to which it is submitted that Andre should not be disbelieved).

89. [1620]

    It is noted that, throughout the relevant period, Andre was a young labourer in his early 20s without any tertiary education and that, even at the time of his evidence, after years of ATO audit and receiving advice from lawyers and accountants, he had only the most rudimentary understanding of tax, finance, accounting and bookkeeping. It is submitted that it would not be inferred that in 2012 and 2013, Andre Abou-Antoun had such knowledge or that he did not place complete reliance on his accountants.

90. [1621]

    The Earth Civil AKA Parties submit, first, that it should not be found that Michael Abou-Antoun was a deemed or shadow director of Earth Civil. It is noted that the evidence relied on by the plaintiffs for the contention of his de facto or shadow directorship is: that he had previously been a director of Earth Civil; that he was the sole signatory on the bank account of Earth Civil; that Earth Civil employed persons in the AKA Group including members of Michael’s family; that AKA Civil and AKA NSW paid $986,000 to Earth Civil; and that within a week or less of each transfer comprising the $986,000, withdrawals were made by either Andre Abou-Antoun, Michael Abou-Antoun and unknown person(s) totalling $965,000. It is said that there is no additional or better evidence from which any of the de facto director factors (see plaintiffs’ closing submissions at [46]) could be established.

91. [1622]

    It is submitted by the Earth Civil AKA Parties that the bare facts that Michael Abou-Antoun had a conversation with Gino Cassaniti and then at some stage asked Andre Abou-Antoun to withdraw cash from Earth Civil’s bank account does not establish that Michael was a director of Earth Civil. It is submitted that there is insufficient evidence to ground a finding or reasonable inference that Gino Cassaniti acted in accordance with the directions of Michael Abou-Antoun with respect to Earth Civil during the period from 1 July 2012 onwards.

92. [1623]

    The Earth Civil AKA Parties say that the above matters, taken individually or together, are insufficient to establish that Michael Abou-Antoun was a de facto or shadow director of Earth Civil; and that this aspect of the plaintiffs’ claim is not made out.

93. [1624]

    Second, it is submitted by the Earth Civil AKA Parties that the plaintiffs have not proved that Michael Abou-Antoun had knowledge sufficient to be an accessory to the pleaded dishonest and fraudulent design, if found, on the part of Gino Cassaniti and others and Banq Accountants. The Earth Civil AKA Parties repeat the submissions in this regard made by the AKA Parties in the Bluemine Proceeding.

94. [1625]

    The Earth Civil AKA Parties say that, despite Michael Abou-Antoun not giving evidence (on the basis of a claim of self-incrimination privilege referred to earlier) the above does not give rise to an inference that: Michael was a shadow or de facto director; or Michael’s evidence could not have assisted him as to directorship; that Michael had sufficient knowledge to be an accessory; or that Michael’s evidence could not have assisted him as to his knowledge.

95. [1626]

    As above, I have found that Gino Cassaniti was the de facto director of Bluemine during the relevant period and that his breaches of duty were fraudulent and dishonest.

96. [1627]

    I have commented above on my observations of Andre Abou-Antoun’s evidence. The difficulty I have with Andre Abou-Antoun’s evidence is that, at the very least, Andre Abou-Antoun understood at the time that advice had been received by Michael Abou-Antoun (leaving aside the truth of what was communicated to Michael Abou-Antoun) that the company restructuring was to be for a tax benefit (though he did not understand what that was or how it was to be effected) and that it was to involve the use of an invoicing company; and, that when the invoices were in fact issued, Andre Abou-Antoun appreciated that they were not correctly describing services that had been rendered. In those circumstances, whether or not he also understood that there were to be payments made as between the companies for proposed property purchases, he was on notice of facts that would have put an honest and reasonable person on enquiry as to why the invoices were being structured in that way; and therefore, whether or not his knowledge that the invoices were “inflated” or “exaggerated” or as to the way in which the tax benefits were achieved was gained at a later stage, it does not affect the fact that at the time the arrangements were being put in place – and when they were implemented – he was on notice of the facts that comprised the dishonest and fraudulent design on the part of Gino Cassaniti in which Fred Khalil and Peter Abboud were involved and that he assisted in that design.

97. [1628]

    As to Michael Abou-Antoun, the fact that he communicated to his brother the essence of the Scheme advice (whoever had communicated it to him and whatever were its precise terms as to the way in which tax benefits were to be achieved or the like) establishes that he was on notice of the proposal to structure the companies so as to render invoices for services that he also must have known were not being rendered. There simply is no evidence that management or supervision services were being rendered to the extent stated in the invoices. Moreover, as director of AKA NSW and AKA Civil, Michael Abou-Antoun must have known of the large sums being paid out to Bluemine and then repaid to LAM Haulage, MAL Land and The Great Brothers (The Great Brothers being another company of which he was a director). Therefore, I find that Michael Abou-Antoun had knowledge of the circumstances that would indicate the facts to an honest and reasonable person and that he assisted in Gino Cassaniti’s dishonest and fraudulent design.

98. [1629]

    A finding that LAM Haulage, MAL Land and The Great Brothers are accessorially depends on whether there is to be imputed to them knowledge of the dishonest and fraudulent design. Andre Abou-Antoun was the director of LAM Haulage; Michael Abou-Antoun was the director of MAL Land; and both Andre and Michael Abou-Antoun were directors of The Great Brothers during the relevant period.

99. [1630]

    There is nothing to indicate that Andre or Michael Abou-Antoun were acting outside of their authority as directors of the respective companies in accepting the funds paid in. However, even if it is considered that Andre and Michael Abou-Antoun were acting in “fraud” of each of the companies, it is clear that their actions were partly for the respective companies’ benefit, in that each of these companies received large sums of money for seemingly no consideration. I consider that the knowledge of Andre Abou Antoun should be attributed to LAM Haulage, the knowledge of Michael Abou-Antoun to MAL Land and the knowledge of each of Andre and Michael Abou-Antoun to The Great Brothers. Finally, I find that in receiving the impugned transactions each of LAM Haulage, MAL Land and The Great Brothers assisted in the dishonest and fraudulent design.

100. [1631]

     As to Michael Abou-Antoun’s liability in the Earth Civil Proceeding, I similarly consider that he had Baden Delvaux knowledge. I am not persuaded by Andre Abou-Antoun’s evidence that some of the large cash withdrawals made by Michael Abou-Antoun (as admitted in his defence) were used to pay employees wages, and in this regard, I would have expect some documentary evidence to support this claim. I also consider that the payment of large sums into Earth Civil and then withdrawal of large sums by Michael Abou-Antoun from Earth Civil, including cash withdrawals, for no apparent commercial purpose, must have put him on notice of the facts that would put an honest and reasonable person on enquiry. Moreover, his assistance in the Scheme can be inferred from his role involvement in the impugned transactions.

101. [1632]

     As to whether Michael Abou-Antoun’s knowledge, as director, can be imputed to AKA Civil and AKA NSW, it appears that Michael Abou-Antoun was acting in fraud of these companies. AKA Civil paid out $400,000 to Earth Civil, which was then paid to Andre and Michael Abou-Antoun. AKA NSW paid $586,000 to Earth Civil that was then mostly paid to Michael Abou-Antoun ($565,000). I have not been taken to any benefit received by AKA Civil or AKA NSW for entering into these transactions and in those circumstances, I consider that Michael Abou-Antoun was acting in fraud of these companies and that they cannot be imputed with his knowledge.

102. [1633]

     I have concluded that Andre Abou-Antoun, Michael Abou-Antoun, LAM Land, MAL Haulage and The Great Brothers were on notice of facts that would have put an honest and reasonable person on enquiry as to the issuing of the invoices (and hence the making of the payments). I do not find that they were on notice of those aspects of the Scheme that related to the winding up of the companies but I do not accept that such knowledge is necessary to make good the claims made against them of accessorial liability.

103. [1634]

     Therefore, subject to issues of causation and loss (and the joint release defences), which I consider in due course below, I find that liability has been established on the part of the AKA Parties.

Submissions and findings – George Said and Involved Recruitment

1. [1635]

   As to the claims against George Said and Involved Recruitment, I have already noted the evidence given by George Said, and the relevance of that evidence to the claims against Gino Cassaniti and do not here repeat those matters. I add that George Said’s evidence was that he did not visit Banq only for his accounting work prior to being engaged with Involved Recruitment in 2012, but also because he was friends with people at Banq (T 847.1-11; 847.50-848.4). George Said (despite the ASIC records) regarded himself to “be a director of Involved Recruitment” (T 846.5).

2. [1636]

   In summary, the plaintiffs say that it is clear from the effect of George Said’s evidence that Gino Cassaniti was the real controller of Involved Recruitment (referring to George Said’s evidence (at T 869.40-871.14) and, in relation to his appointment as a director, George Said’s evidence (at T 871.9-13) that Gino Cassaniti must have put his name down as a director of the company; and the evidence at T 871.37-43 that Gino Cassaniti had never discussed with him anything to do with changes of directorship for Involved Recruitment). The plaintiffs say that the effect of George Said’s evidence (at T 872.35-47) is that he primarily or entirely received his instructions regarding Involved Recruitment from Gino Cassaniti alone; and that the fact that Gino Cassaniti controlled Involved Recruitment is demonstrated by the conflicting Form 484s lodged with ASIC (see above).

3. [1637]

   Further, it is noted that: Form 484s appointing Gino Cassaniti to RCG CBD and Earth Civil were also purportedly signed on 1 January 2013 and all lodged on 28 May 2013; and the Forms purportedly backdated the appointment of Gino Cassaniti as a director to 16 May 2012 (RCG CBD and Involved Recruitment) and to 1 July 2012 (Earth Civil); each of the three companies, Involved Recruitment, RCG CBD and Earth Civil, went into liquidation on the same day, 28 June 2013; and those three liquidations were all instigated by Gino Cassaniti as the director of each of the three companies, that is, Gino Cassaniti signed the respective resolutions appointing Mitchell Warren Ball in a creditor’s voluntary winding up.

4. [1638]

   When coupled with George Said’s evidence (see above), that he was acting on Gino Cassaniti’s instructions, the plaintiffs say that it is obvious that Gino Cassaniti controlled Involved Recruitment. Reference is made again to George Said’s evidence as to the work he did on his laptop in relation to invoices. The plaintiffs say that George Said’s evidence to the ATO in that regard was the truth.

5. [1639]

   The plaintiffs say that clearly Gino Cassaniti controlled payments from Involved Recruitment, noting George Said’s evidence in this regard (at T 843.44-844.1; T 844.28-32). The plaintiffs also point out that the bank statements for Involved Recruitment were addressed to “the Director” at George Said’s home address in Belmore over a 21-month period and note that his evidence was that he received the bank statements for Involved Recruitment (T 845.21-846.4).

6. [1640]

   It is noted that Fred Khalil also had involvement with Involved Recruitment. Of the payments from Involved Recruitment to RCG CBD totalling $934,339.28 (Table 3.13), one of those payments was of $17,500 from Involved Recruitment to RCG CBD on 14 May 2013. RCG CBD then paid $17,500 to Sivasli (Fred Khalil’s company) on 14 May 2013.

7. [1641]

   Reference is made to the evidence as to the liquidation of Involved Recruitment (see above) and the lodgement of proofs of debt by Gino Cassaniti and Banq.

8. [1642]

   As to George Said’s knowledge, it is said that he was a straw director of Involved Recruitment appointed and instructed by Gino Cassaniti. It is said that, in carrying out his instructions, George Said acting as the director of Involved Recruitment was the person that: delivered large sums of cash to Gino Cassaniti from Involved Recruitment; caused Involved Recruitment to pay $934,399 to RCG CBD; and caused Involved Recruitment to receive and accept $55,590 from Bluemine; for which there was no genuine commercial documentation.

9. [1643]

   The plaintiffs maintain that, in carrying out those instructions George Said knew that he was assisting Gino Cassaniti (because on his evidence he was doing what Gino Cassaniti asked him to do). The plaintiffs contend that, from the nature of the transactions, George Said knew what Gino Cassaniti was doing was dishonest or had knowledge of circumstances which would indicate to an honest and reasonable person that Gino Cassaniti was acting dishonestly and fraudulently in instructing George Said to cause Involved Recruitment to deliver cash to Gino Cassaniti, transfer $934,399 to RCG CBD and receive $55,590 from Bluemine.

10. [1644]

    The plaintiffs say that all of the conduct referred to above involving George Said, RCG CBD and Bluemine would not have occurred in the absence of the Scheme Recommendation/Primary Conspiracy; that is, it did not occur by chance. The plaintiffs say that on the whole of the evidence it is established that the conduct occurred, was orchestrated and implemented throughout by Gino Cassaniti, Fred Khalil, Peter Abboud and George Khalil in furtherance of the conspiracy. Thus, it is said that George Said is liable to RCG CBD as an accessory, as claimed.

11. [1645]

    As to George Said’s culpability in (dishonestly) assisting Gino Cassaniti in his breach of fiduciary duty and in causing Involved Recruitment to make the impugned payments to RCG CBD (and as to his involvement in Involved Recruitment’s entry into the Scheme as effected and instructed by Gino Cassaniti), similar submissions are made by the plaintiff as to the submissions made in respect of the conduct of both Tanya Borg and Michael Borg (see below).

12. [1646]

    The plaintiffs say that whether or not George Said knew that the Scheme ultimately required the liquidation of RCG CBD and Bluemine is irrelevant; that the part of the Scheme that he did know about (the dishonest payments) was the substratum of the dishonest and fraudulent conduct that ultimately concluded with RCG CBD’s liquidation.

13. [1647]

    Again, similar submissions are made as to George Said’s culpability (as a director of Involved Recruitment) in assisting Gino Cassaniti in his breach of fiduciary duty as a director of Bluemine in relation to the impugned payment from Bluemine which was said to be for no consideration and without genuine or legitimate documentation.

14. [1648]

    It is submitted that George Said’s conduct, as a director of Involved Recruitment, in causing Involved Recruitment to receive and acquiesce to the impugned payment from Bluemine, without providing consideration and without genuine/legitimate documentation, was dishonest; and that he knew that his conduct in receiving the impugned payment was dishonest. It is said that, without George Said’s involvement, Gino Cassaniti could not have perpetrated his dishonest and fraudulent design in breach of his fiduciary duty to Bluemine and that thus, George Said is also liable to Bluemine as an accessory, as claimed.

15. [1649]

    As to George Said, the Khalil defendants note that the evidence is that George Said was a director of Involved Recruitment for one day. Insofar as the plaintiffs assert that George Said remained a director at least until the notice to ASIC was lodged, the Khalil defendants say that the late filing of notice to ASIC is not the backdating of the director’s removal from the board; it is simply a late notice. They say that the ASIC record is prima facie evidence of the matters recorded. In any event, they say that it is likely that George Said was never a director “in any real sense” pointing to George’s Said’s evidence (see as summarised earlier).

16. [1650]

    The Khalil defendants submit that it should be inferred that the guiding mind of Involved Recruitment was in fact Gino Cassaniti and not George Said. Moreover, they say that the evidence of the facts of which George Said was aware does not lead to a clear inference that the invoices which he was preparing were part of any dishonest or fraudulent design (rather, it is said that they are consistent with invoicing customers for the deployment of staff and the payment of staff, including himself).

17. [1651]

    The Khalil defendants say that George Said (who they describe as a man who ordinarily would work with his hands) gave his evidence in Court (as well as that given in the ATO interview) as frankly as he could. It is said that the concerns he expressed in relation to his earlier interview with the ATO reflected more his concern that he had misunderstood or had subsequently realised that he had been mistaken in his understanding of the questions he was actually being asked at the time, rather than any serious attempt to dissemble.

18. [1652]

    The Khalil defendants say that (contrary to the plaintiffs’ submissions at [1326]; [1328]) there was no evidence of the work which George Said actually did for Involved Recruitment, nor was there evidence of any other circumstances in connection with what he did or would have known, which meets the fourth (and lowest) category of Baden Delvaux knowledge that he was assisting in a dishonest or fraudulent design in breach of a duty owed by Gino Cassaniti to one of the five Insolvent Companies (even if he was). It is said that the proceedings should be dismissed as against George Said.

19. [1653]

    The plaintiffs say that there does not seem to be any dispute between the parties as to the following matters: that George Said became a director of Involved Recruitment at the behest of Gino Cassaniti, who was the ultimate controller of Involved Recruitment; that George Said regarded himself as a director of Involved Recruitment; that George Said’s role at Involved Recruitment centred around the changing of the letterhead for invoices that he was provided by either Banq or clients of Banq (the plaintiffs say that, to describe this process as minor clerical work, as suggested by the Khalil Parties, seeks to downplay his role in the Scheme); that Involved Recruitment made payments to RCG CBD totalling $934,339.28; that George Said could log onto Involved Recruitment’s bank account and conduct transactions on it, and that he was also able to withdraw large sums from the account; that George Said was paid for this work, either directly from the bank account of Involved Recruitment or Gino Cassaniti would give him cash payments; and that George Said would withdraw large sums of cash (in the order of $200,000), and generally that money would go to Gino Cassaniti at Banq’s premises.

20. [1654]

    It is said that George Said cannot on any view have been an innocent party in these transactions; rather, that he was the proverbial “bag man”. It is said that George Said played his part in the Scheme and he did so with knowledge; and that he admitted as much to the ATO during the course of his interview with them on 3 June 2019 (which he accepted in cross-examination was the truth). The plaintiffs say that the submission that the matters put to George Said during his cross-examination were unfair (because he ordinarily works with his hands) is without basis (noting that George Said has been a real estate agent for some 7 years). The plaintiffs say that George Said’s attempt to resile from the evidence that he gave to the ATO in cross-examination should be rejected in its entirety, and that that attempt “shredded his credibility”.

21. [1655]

    I consider that George Said’s involvement in the scheme renders him liable for knowing assistance. While there is an argument that he was simply performing an administrative task (giving rise to a question as to whether, by issuing the invoices, he was on notice of facts that rendered the invoices false or suspicious). I consider that the evidence as to the manner in which the invoices were created (confused and inconsistent as that evidence was) must have raised a question in the mind of a reasonable and honest person. That alone might not have been sufficient. However, it must be taken in the context of the circumstances in which he withdrew large sums of cash, at Gino Cassaniti’s instructions, that he delivered to him at Banq’s offices and from which Gino Cassaniti directed him to take seemingly arbitrary amounts of money. The circumstances in which that occurred surely put him on notice of facts that would put a reasonable and honest person on enquiry. I consider that George Said’s role in issuing the invoices, making the payments, withdrawing large sums and delivering them to Gino Cassaniti is sufficient to establish his assistance in Gino Cassaniti’s breaches of fiduciary duty to RCG CBD and Bluemine.

22. [1656]

    Accordingly, I find that the claim against George Said for accessorial liability for knowing assistance is made good.