Engadine Medical Imaging Services Pty Ltd as trustee for the Engadine Unit Trust v Mena Ibrahim

These proceedings are brought by the plaintiffs, Engadine Medical Imaging Services Pty Ltd (EMIS) as trustee for the Engadine Unit Trust, Dr Ali Kyatt and Advanced Imaging Pty Ltd as trustee for the Kyatt Family Trust, against various defendants being:

The scope of the plaintiffs’ claims significantly narrowed over the course of the proceedings, particularly during the three-day hearing before me when substantial claims against the defendants were dropped. The narrowing of the claims, however, still involves my consideration of a vast amount of factual material.

The allegations and relief now sought by the plaintiffs are contained in the further amended statement of claim (FASOC), which was provided to me in draft form on 16 May 2024 (after the conclusion of the hearing) and which was filed by the plaintiffs on 18 July 2024 pursuant to leave granted by me.

In short, the plaintiffs seek relief:

Initially the proceedings involved much wider allegations about an alleged joint venture agreement (JVA) between Dr Kyatt, Mr Ibrahim and Mr Chaudhry in relation to four radiology practices operating in suburbs south of Sydney (the Lakemba Practice, the Dapto Practice, the Warrawong Practice and the Engadine Practice). However, in the course of the hearing before me, the plaintiffs abandoned their allegations regarding the JVA and confined their claims to the parties’ relationships and dealings in connection with the Engadine Practice alone. This is very significant in relation to the allegations which remained in the proceedings because all of the factual allegations concerning the ownership, operation and management of the Lakemba Practice, the Dapto Practice and the Warrawong Practice were specifically removed from the FASOC.

The defendants contest the existence of the remaining alleged obligations which the plaintiffs contend have been breached. Mr Ibrahim filed his defence on 24 August 2023 (Mr Ibrahim’s defence) and Mr Chaudhry filed his defence on 16 August 2023 (Mr Chaudhry’s defence).

I note that no claims against Focus Radiology Dapto, Focus Radiology Warrawong, Dapto Imaging or Warrawong Imaging are pressed. On 15 May 2024, I made orders dismissing the proceedings against Warilla Diagnostic Imaging, with costs reserved. Although the FASOC sets out relief claimed against Engadine Medical Imaging (at prayers 12–18), the plaintiffs’ written submissions in closing state that those remedies do not require my attention, for reasons to do with a Deed of Settlement and Release dated 23 February 2023 between Engadine Medical Imaging, Mr Ibrahim, EMIS and Dr Kyatt, the precise terms and implications of which are detailed below, and the effect of which is that whether the claim against Mr Ibrahim succeeds or fails, the relief claimed against Engadine Medical Imaging will be either otiose (in the former case) or unavailable (in the latter). On that basis, I will also dismiss the proceedings against Engadine Medical Imaging, Focus Radiology Dapto, Focus Radiology Warrawong, Dapto Imaging and Warrawong Imaging.

Accordingly, this judgment only addresses the claims against Messrs Ibrahim and Chaudhry which are limited to their involvement with EMIS. The substantive issues that I am required to determine are as follows:

At the hearing, EMIS, Dr Kyatt and Advanced Imaging relied on evidence from Dr Kyatt and Ameer Al-Khigani, a business associate of Dr Kyatt.

Neither Mr Ibrahim nor Mr Chaudhry read any affidavits, gave evidence or called any witnesses in the proceedings. On this basis the plaintiffs ask that I draw a Jones v Dunkel inference in respect of their failure to give evidence as well as their failure to call Dannielle Coles as a witness in their respective cases. I have addressed the issue of the Jones v Dunkel inferences in more detail below.

Mr M Pesman SC appeared with Mr M Klooster for EMIS, Dr Kyatt and Advanced Imaging, instructed by New South Lawyers. Mr M Condon SC appeared with Mr M Collins for Mr Ibrahim, instructed by Bridges Lawyers. Mr G Sirtes SC appeared with Mr F Di Lizia for Mr Chaudhry, instructed by Madison Marcus.

At the hearing, Dr Kyatt was cross-examined by Mr Condon SC and Mr Sirtes SC on multiple issues.

The approach of a trial judge to the assessment of the credibility and reliability of a witness who gives evidence in a trial has a number of aspects which are relevant to these proceedings. The salient principles are as follows:

As will be apparent from the factual findings I have set out below, I formed an adverse view of the credibility and reliability of the evidence given by Dr Kyatt. In doing so, I recognised that Dr Kyatt is from Jordan and English is not his first language, which is apparent from the staccato and ungrammatical way he expressed himself in multiple emails and throughout his cross-examination. I did not make any of my findings about Dr Kyatt’s credibility and reliability based on his demeanour in the witness box alone. Dr Kyatt’s own counsel stated that he “struggled in cross-examination … plainly very aggrieved by what he perceives … to be the misconduct of Mr Ibrahim and Mr Chaudhry”. In the main, I have set aside the way in which Dr Kyatt conducted himself and given him the benefit of doubt in relation to the obvious infelicities in his expression when I assessed his evidence.

The views that I formed of Dr Kyatt’s evidence are primarily based on the probabilities and the objective factual surrounding material, which mainly comprise the documents in evidence. Repeatedly, Dr Kyatt evaded answering direct questions and refused to concede obvious propositions arising from contemporaneous documents. He gave answers which were internally inconsistent and objectively improbable. On critical matters relevant to the claims he propounded I have not accepted his evidence.

I have made these findings even though I have not been required to assess the credibility and reliability of Dr Kyatt’s evidence against the evidence of any other witness. Dr Kyatt’s evidence was in itself unsatisfactory on multiple occasions.

The evidence on which I have made credit findings against Dr Kyatt is set out below.

The rule in Jones v Dunkel (1959) 101 CLR 298, being the principle articulated by Kitto J at 308, Menzies J at 312 and Windeyer J at 320–321, has been distilled, summarised, expanded and explained in a number of authorities in the High Court of Australia and the Court of Appeal of this court, principally including Payne v Parker [1976] 1 NSWLR 191, Glass JA at 201; Manly Council v Byrne [2004] NSWCA 123, Campbell J (Beazley JA and Pearlman AJA agreeing) at [44]–[61]; Kuhl v Zurich Financial Services Australia Ltd (2011) 243 CLR 361; [2011] HCA 11, Heydon, Crennan and Bell JJ at [63]; Ling v Pang [2023] NSWCA 112, Kirk JA (Leeming and Mitchelmore JJA agreeing) at [20]–[28]; SSABR Pty Ltd v AMA Group Limited [2024] NSWCA 175, Stern JA (Ward P and Price AJA agreeing) at [158]–[161]. These authorities support the following legal principles:

In the present case, Mr Chaudhry and Mr Ibrahim are parties in the proceedings who were not called to give evidence, in circumstances where it would be expected that they would each do so in their own cause and where their respective absences are unexplained. As a result, I will apply the rule in Jones v Dunkel in accordance with the principles stated above in relation to their failure to give evidence to draw the particular inferences that I have identified below.

In respect of the defendants’ failure to call as a witness or put on evidence given by Ms Coles, a business operations manager employed by one or more of the radiology practices owned by Messrs Ibrahim and/or Mr Chaudhry at different times and whose involvement in relevant events is disclosed in the following section of the judgment, I will also apply the rule in Jones v Dunkel. My reasons for doing so, and the inferences I am accordingly prepared to draw, are set out below.

In around mid 2011, Dr Kyatt (a radiologist) and Mr Chaudhry (a sonographer) first met. At this time, Dr Kyatt was living in Griffith, New South Wales, and working for I-MED Radiology. Mr Chaudhry introduced Dr Kyatt to Mr Chaudhry’s business partner, Shahid Iqbal. Mr Chaudhry mentioned to Dr Kyatt that they were considering opening a radiology practice in Griffith and asked if Dr Kyatt would like to join them. Dr Kyatt declined to be involved.

On 21 September 2011, Mr Chaudhry sent an email to Dr Kyatt reiterating that they were seriously considering establishing a radiology practice in Griffith, and potentially expanding into the surrounding rural areas, and said that they were happy to offer Dr Kyatt the same wage as he was currently getting plus 10% of the profits with no need for Dr Kyatt to make any financial input. To Dr Kyatt’s knowledge, that proposed business venture involving Messrs Chaudhry and Iqbal did not go ahead.

In or around 2015, Mr Chaudhry called Dr Kyatt and requested his assistance with performing certain medical procedures, including nerve root injections, performing biopsies under ultrasound guidance and joint injections, at a practice that Mr Chaudhry operated, jointly with a neurologist, in Kingswood, New South Wales (Kingswood Practice). Dr Kyatt subsequently performed work as a contractor at the Kingswood Practice on several occasions on weekends.

On 11 May 2015, Mr Chaudhry sent an email to Dr Kyatt in which he said he would like to offer Dr Kyatt a proposal to come and work at the Kingswood Practice, that they were able to match what Dr Kyatt was on in Griffith and that they could even give him equity in the businesses. Mr Chaudhry asked Dr Kyatt to let him know if he was interested and said that they could meet up and discuss further.

In about November 2015, Dr Kyatt was approached by Mr Chaudhry and Mr Ibrahim, who offered him employment at their three radiology practices in the Sutherland Shire and Illawarra areas, in the suburbs of Engadine, Warilla and Woonona. In an email dated 8 November 2015 to Dr Kyatt, Mr Chaudhry said that with Dr Kyatt working with Mr Chaudhry and Mr Ibrahim, they could grow and expand in the future. In the letter dated 8 November 2015 on the letterhead of Woonona Medical Imaging which was attached to that email, Mr Chaudhry formally offered Dr Kyatt employment as a radiologist working at each of the Engadine Practice, the Warilla Practice and the Woonona Practice at a daily rate of $3,800 inclusive of GST. The term of the employment was expressed to be “until Dr Ali Kyatt needs to leave for overseas”. The letter also included the following statement under the sub-heading “Equity Partnership”:

In early 2016, Dr Kyatt relocated from Griffith to Sydney and began working for Mr Chaudhry and Mr Ibrahim at the Engadine Practice, the Warilla Practice and the Woonona Practice as a contractor radiologist paid by session. Also around this time, Dr Kyatt, Mr Chaudhry and Mr Ibrahim entered into discussions and negotiations, which took place in person, to enter into business together. Messrs Chaudhry and Ibrahim proposed that Dr Kyatt would purchase shares in one or more of the Engadine Practice, the Warilla Practice and the Woonona Practice. Those discussions continued to around mid-2016 but did not result in any agreement being reached.

In 2009, the Engadine Practice was established by Mr Ibrahim and was conducted by Advanced Medical Imaging Pty Ltd (AMIS, which later changed its name to Advanced Medical Fitouts Pty Ltd), of which Mr Ibrahim was the sole director and shareholder. As a result, Mr Ibrahim was managing the Engadine Practice from that time until the events of February 2018 which are outlined below.

In around April 2016, Dr Kyatt was provided with access to the financial books and records of the Engadine Practice for the 2013, 2014 and 2015 financial years.

On 23 June 2016, EMIS was incorporated, with Dr Kyatt as its sole director and secretary and Advanced Imaging as its sole shareholder. Dr Kyatt is the sole director of Advanced Imaging and Dr Kyatt and his wife are the equal shareholders of Advanced Imaging.

On 1 February 2017, the Lease of premises at Suite 3/24–28 Station St, Engadine (Engadine Premises) was entered into between Peter and Robyn Thompson (as lessors) and Pulse Medical Imaging Engadine Services Pty Ltd (as lessee). Pulse Medical was a company controlled by Messrs Ibrahim and Chaudhry. The Lease was signed by Messrs Ibrahim and Chaudhry on behalf of Pulse Medical.

The Lease had a commencement date of 1 February 2017 and a termination date of 31 January 2022. The Lease included an option to renew for a further five-year term, which had to be exercised within a period of three months before the expiry of the Lease, namely by 31 October 2021. I infer that as signatories to the Lease, each of Messrs Ibrahim and Chaudhry knew that the option had to be exercised under the Lease by 31 October 2021 and that the Lease expired on 31 January 2022.

In October 2017, negotiations resumed concerning the potential acquisition by Dr Kyatt of an interest in the radiology practices owned and operated by Messrs Chaudhry and Ibrahim, the Engadine Practice in particular. Dr Kyatt offered to buy a 51% interest in the Engadine Practice and considered it was important for him to have a majority interest in that business and that he would handle the day-to-day management of it.

On 30 October 2017 at 11:52pm, Mr Chaudhry sent an email to Rizwan Inayat (an accountant for Dr Kyatt who attended a meeting on 28 October 2017 between Dr Kyatt, Mr Chaudhry and Mr Ibrahim), copied to Dr Kyatt, Mr Ibrahim and Imran Khan (the solicitor for Messrs Chaudhry and Ibrahim). Mr Chaudhry’s email forwarded (and expressed approval in answer to) an email sent earlier that evening at 6:46pm by Mr Inayat, which stated that Dr Kyatt, Mr Chaudhry and Mr Ibrahim contemplated having a shareholders agreement with the following main points:

This corporate structure did not proceed and no shareholders agreement was ever entered into between Dr Kyatt, Mr Chaudhry and Mr Ibrahim. Dr Kyatt confirmed this in cross-examination (T135–136). Several of the themes concerning Dr Kyatt having full control of the Engadine Practice which were raised in this email did, however, find their way into the structure which was ultimately adopted by Dr Kyatt, Mr Chaudhry and Mr Ibrahim. I will now turn to that structure.

Dr Kyatt gave evidence in cross-examination (T63 and T70) that Mr Inayat commenced to be his personal accountant in 2017 and has remained his personal accountant since then.

In about early February 2018, after lengthy negotiations, Dr Kyatt had a meeting with Mr Chaudhry and Mr Ibrahim in which Dr Kyatt said he was prepared to pay $319,000 for a majority stake in the Engadine Practice, saying that he would like a 51% interest in it and ultimate control of the company. Each of Mr Chaudhry and Mr Ibrahim agreed.

On 1 February 2018, the Engadine Imaging Trust (a unit trust) was created, pursuant to a deed (Engadine Trust Deed) executed between Advanced Imaging as trustee for the Kyatt Family Trust, Chaudhry Radiology Services Pty Ltd as trustee for the Nabeel Chaudhry Family Trust, MI No. 2 Family Pty Ltd as trustee for the MI No. 2 Family Trust (an entity associated with Mr Ibrahim) and EMIS.

The Engadine Trust Deed, which provided that EMIS would be trustee of the Engadine Imaging Trust, was executed by Dr Kyatt, Mr Chaudhry and Mr Ibrahim, on behalf of their respective unit holders of a total of 100 units in the Engadine Imaging Trust, as follows:

The Engadine Trust Deed was also executed by Dr Kyatt on behalf of EMIS as its director and secretary.

Under the Engadine Trust Deed, EMIS had the power to institute, set up and administer the Engadine Practice, being the radiology practice known as Engadine Imaging (cl 21.1(a)). The “business” was defined in the Engadine Trust Deed as the radiology practice situated at the Engadine Premises or such other location as agreed by EMIS (cl 1.1(b)).

The Engadine Trust Deed also provides that there is no relationship of principal and agent between EMIS and the unit holders, no relationship of partners as between EMIS and the unit holders and no relationship of partners as between the unit holders amongst themselves (cl 19.1). In addition, the Engadine Trust Deed provides that no unit holder is under any obligation to personally indemnify EMIS or any creditor of EMIS in the event of there being any deficiency of the assets of the Engadine Imaging Trust as compared to its liabilities (cl 19.2).

Clause 13.2 of the Engadine Trust Deed provides that unit holders may inspect the financial statements and books of account in relation to the Engadine Imaging Trust.

The Engadine Trust Deed expressly provides that control and management of the Engadine Practice is the responsibility of the majority unit holder, Advanced Imaging, and contains particular provisions which establish the special position of Advanced Imaging in control of the Engadine Practice.

The relevant terms of the Engadine Trust Deed are bespoke in this regard, providing particular rights in favour of Advanced Imaging (which were not given to the entities controlled by Messrs Chaudhry and Ibrahim) as follows:

Dr Kyatt agreed in cross-examination that he acquired 51% of the units because he wanted to have control of the business of the Engadine Imaging Trust and the Engadine Practice and that he was intent on managing it (T136–137).

On 12 February 2018, Dr Kyatt paid $319,218.91 to Mr Ibrahim to acquire a 51% controlling interest in the Engadine Practice on behalf of Advanced Imaging. Given that this was an arms-length transaction, this placed the value of the Engadine Practice as at 12 February 2018 at $625,919.43.

At that time, through Dr Kyatt’s position as the sole director of each of Advanced Imaging and EMIS, Advanced Imaging’s sole shareholding in EMIS, Advanced Imaging’s 51% unit holding in the Engadine Imaging Trust and its rights under the Engadine Trust Deed, Dr Kyatt took over the total control of the day-to-day management of the Engadine Practice and assumed the capacity to make all decisions in relation to it.

Upon taking over the total control of the day-to-day management of the Engadine Practice in February 2018, Dr Kyatt made numerous changes to the Engadine Practice in an attempt to make it profitable, including:

By contrast, in February 2018, Mr Ibrahim went from being the sole director, manager and shareholder of AMIS (the company previously operating the Engadine Practice) to being a director of a minority unit holder of the Engadine Imaging Trust which beneficially owned the Engadine Practice. From February 2018, Mr Ibrahim had no power to manage the Engadine Practice as Advanced Imaging alone, acting through Dr Kyatt, had total control of the day-to-day management of, and decision-making in relation to, the Engadine Practice. Mr Ibrahim was a director of MI No. 2, which held 30% of the units in the Engadine Imaging Trust as trustee for the MI No. 2 Family Trust.

On 22 February 2018, Mr Inayat sent an email to All Star Property Group, the managing agent for the lessor of the Engadine Premises, introducing himself and stating that he acted as the accountant for EMIS and was responsible for all the payments. In the email, Mr Inayat asked that all correspondence be sent to his email address and also provided his mobile number.

On 23 February 2018, Nicole Hartnett of All Star Property Group replied by email to Mr Inayat stating that she had updated their system to include him as the main contact in relation to the Lease.

In February 2018, the Engadine Premises were transferred from Peter and Robyn Thompson to new owners, Don and Helen Zafiropoulos, who bought the Engadine Premises subject to the Lease.

In May 2018, Pulse Medical assigned the Lease of the Engadine Premises to EMIS.

At all relevant times, the Engadine Practice traded from the Engadine Premises.

In September 2018, Dr Kyatt, Messrs Ibrahim and Chaudhry and Dr Haider Jasim (a general practitioner) had discussions about establishing a radiology practice in Dapto. Those exchanges took place at least in part via WhatsApp messaging and email. Among the matters discussed was the presence of an existing radiology practice in Dapto.

In late September 2018, Dr Kyatt, Messrs Ibrahim and Chaudhry, and Dr Jasim exchanged WhatsApp messages in the course of which:

On 25 September 2018, Mr Chaudhry sent an email to Dr Kyatt, Mr Ibrahim and Dr Jasim, attached to which was a spreadsheet setting out the prospective pay rates and total expense of hiring six members of staff from the existing practice in Dapto. In the body of the email, Mr Chaudhry stated:

One of the members of the staff in the existing practice in Dapto listed on the spreadsheet was “Danielle Coles” (her correct first name is “Dannielle”).

On 6 February 2019, Mr Inayat sent an email to Dr Kyatt, Mr Ibrahim and Mr Chaudhry in which he said there was a fair bit of money in Engadine and he was proposing that $50,000 be taken out as profit share. Mr Inayat said that he would transfer the $50,000 according to the percentage of units held by each unitholder and asked for them to confirm their bank account details.

On 19 April 2019, Mr Inayat sent an email to Dr Kyatt, Mr Ibrahim and Mr Chaudhry in which he said there was quite a fair bit of money sitting in the Engadine account so they had decided to take a $150,000 profit share. Mr Inayat said that because Dr Kyatt had 51% of the shares he would take $76,500 as profit share. Mr Inayat said that each of Mr Ibrahim and Mr Chaudhry should take out their share based on the percentage of shares they had in the business.

The financial statements for EMIS for the year ending 30 June 2019 show that the total income was $1,505,173.49 and total expenses were $1,561,054.14 (including a consulting fee of $136,363.64), making the net loss of $55,880.65. Those financial statements also demonstrate that there was a total equity deficiency of $61,119.40. Dr Kyatt saw these financial statements at the end of that financial year (T85).

The plaintiffs submit that despite the recording of a net loss, the financial statements for the year ending 30 June 2019 reveal that the Engadine Practice was profitable because the unit holders took out their profit share in the form of the consulting fee of $136,363.64 which, when added back to the net loss of $55,880.65, reveals a net profit of $80,482.99. They also say that Dr Kyatt’s 51% share of the consultancy fee was $69,545.46.

In mid-2019, some time prior to July 2019, Dr Kyatt informed Mr Chaudhry that he was relocating overseas. Although the evidence shows that Dr Kyatt had mentioned a proposed relocation overseas during discussions in November 2015 with Messrs Ibrahim and Chaudhry about an earlier business negotiation, Dr Kyatt did not tell Mr Ibrahim or Mr Chaudhry of his intention to leave for Jordan any earlier than mid-2019 and it came as a surprise to them (T137–138).

On 24 July 2019, Dr Kyatt, Dr Jasim, Mr Chaudhry, Mr Ibrahim and Roz Rhoden (the Business Development Manager of Southern Imaging Group) held a meeting at the Novotel at which a number of issues were discussed. The minutes of the meeting were taken by Ms Roden and then emailed by her to all of the other participants on 5 August 2019.

In the minutes of the meeting, Mr Ibrahim is recorded as discussing with Dr Kyatt:

Below this entry, the minutes record “Dr Kyatt considering”.

The minutes of the meeting also state:

The minutes also contain a record of discussion about issues concerning the Dapto Practice and the Warrawong Practice, such as whether an MRI machine and a 3D mammogram machine should be purchased for the Dapto Practice, the anticipated arrival of a bone density machine that had been ordered, whether a female radiologist should be offered shares in the various practices, whether Dr Kyatt and Dr Jasim wished to buy into the practices at Woonona and Warilla and various staffing issues such as the hiring of a marketer and an operational manager.

On 26 September 2019, Mr Chaudhry was appointed as a second director and secretary of EMIS. Dr Kyatt remained a director and secretary of EMIS.

In October 2019, Dr Kyatt moved from Sydney to Jordan for family reasons. Dr Kyatt had access to the Engadine Practice bank account and could monitor the financial performance of the Engadine Practice to the extent it was disclosed in the bank account statements. Dr Kyatt also communicated frequently with Mr Inayat as his own accountant and the accountant for EMIS. Over the following month, Dr Kyatt continued to provide reporting services remotely to the Engadine Practice.

In cross-examination (T58–62), Dr Kyatt stated that after he moved to Jordan, he provided radiology services remotely to independent radiology practices located in Australia, being IDXT (since October 2019) and I-MED (since April 2021). Dr Kyatt’s best estimate is that since late 2019 he has worked for IDXT and continues to do so. Dr Kyatt’s best estimate is that he has worked for IDXT for between six and eight hours per day for five or six days each week. Also in cross-examination (T69), Dr Kyatt said that he did not provide any services to any medical practitioners or sonographers in Jordan.

After Dr Kyatt relocated to Jordan in October 2019, Mr Chaudhry took over management of the Engadine Practice and assumed primary responsibility for the Engadine Practice’s day-to-day operations. This included Mr Chaudhry having unrestricted access to the books and records of the Engadine Practice.

On 28 October 2019, Mr Chaudhry sent an email to Dr Kyatt reporting that the Engadine Practice, as well as the Lakemba Practice and the Dapto Practice, had been doing well since Dr Kyatt had gone and the revenues at all sites were good with no real drop.

On 17 November 2019, Dr Kyatt sent a WhatsApp message to Mr Chaudhry informing him that he would cease to do any further reporting at all for the practices, including the Engadine Practice, saying:

On the same day, Mr Chaudhry responded “no problems”.

Dr Kyatt was cross-examined about the messages he sent to Mr Chaudhry informing him that he was stopping work for all of the practices (T131–134). In light of the views that I have formed about the credibility of Dr Kyatt as a witness, I consider that he stopped doing work for the Engadine Practice and the other practices because he considered that he would be paid more money doing work for IDXT, not because he thought that he would be endangering lives if he continued to do that work (as he claimed in cross-examination). The primary reason he gave to Mr Chaudhry in his message was one relating to money, not any other cause concerning patient care which would have been very simple and powerful for him to say if it was the true reason.

On 7 February 2020, Dannielle Coles sent an email to Mr Chaudhry requesting a pay rise due to her job role and working hours increasing.

On 11 February 2020, Mr Chaudhry sent an email to Dr Kyatt, Mr Ibrahim and Ms Rhoden, forwarding Ms Coles’ email of 7 February 2020 and expressing his approval to give Ms Coles a pay rise, stating “she is a massive asset to the company”.

On 14 February 2020, Ms Rhoden (signing off as Business Development Manager, Southern Imaging Group) responded by email to Mr Chaudhry, copied to Dr Kyatt and Mr Ibrahim, agreeing to the proposed pay rise for Ms Coles.

On 12 March 2020, Mr Ibrahim sent an email to Mr Inayat, the accountant for EMIS, requesting access to the Xero (accounting software) account for the Engadine Practice. Mr Inayat subsequently sent Mr Ibrahim a Xero invitation.

From this time, Mr Ibrahim had unrestricted access to the books and records of the Engadine Practice.

On 1 March 2020, Mr Inayat sent an email to Dr Kyatt, Mr Chaudhry and Mr Ibrahim saying that he had had a chat with Dr Kyatt on the weekend and since there was $150,000 sitting in Engadine they thought it would be a good idea to take some money out as a profit share. Mr Inayat said that they were thinking of taking out $100,000, Dr Kyatt would take out $51,000 and the remainder could be taken out by each of Mr Chaudhry and Mr Ibrahim based on their percentages.

On 12 March 2020, Mr Inayat sent an email to Dr Kyatt, Mr Chaudhry and Mr Ibrahim saying that the money that Dr Kyatt had withdrawn would be classified as a consulting fee for radiology work and expensed in the accounts for EMIS and that the profit share to be taken out by each of Mr Ibrahim and Mr Chaudhry would also get classified as a consulting fee in the books of EMIS.

The financial statements for EMIS for the year ending 30 June 2020 show that the total income was $1,407,461.30 and total expenses were $1,429,435.88 (including a consulting fee of $240,909.09), making the net loss of $21,974.58. Those financial statements also demonstrate that there was a total equity deficiency of $83,093.98. Dr Kyatt saw these financial statements at the end of that financial year (T85).

The plaintiffs submit that despite the recording of a net loss, the financial statements for the year ending 30 June 2020 demonstrate that the Engadine Practice was profitable because the unit holders took out their profit share in the form of the consulting fee of $240,909.00 which, when added back to the net loss of $21,974.58, reveals a net profit of $218,934.42. They also say that Dr Kyatt’s 51% share of the consultancy fee was $122,863.59.

On 22 June 2020 and 5 August 2020, Mr Inayat sent emails to Messrs Ibrahim and Chaudhry and Dr Kyatt concerning the proposed deferral and/or waiver of rental payments for the Engadine Premises from the lessor during the COVID-19 pandemic, with the lessor chasing the rent for the Engadine Premises and offering a 10% waiver of the rent for two months and Mr Inayat planning to go back with a 20% waiver for 6 months starting in April 2020. On 5 August 2020, each of Messrs Chaudhry and Ibrahim sent an email to Mr Inayat asking him to negotiate the waiver.

I infer from this exchange that each of Messrs Chaudhry and Ibrahim were involved in a decision concerning the rent paid by EMIS for the Engadine Premises under the Lease.

On 14 April 2021, Dr Kyatt and Mr Chaudhry had the following exchange over WhatsApp:

In cross-examination (T60–62), Dr Kyatt said that he commenced providing remote radiology services to I-MED in April 2021, which he estimated he did for about one year, involving him working three to four hours a day, maybe two to three shifts a week. Dr Kyatt said that I-MED is the largest radiology practice in Australia and the cases he reported on came from all over Australia, other than Sydney and Wollongong.

On 28 January 2021, Mr Ibrahim sent an email to Dr Kyatt and Mr Chaudhry, copied to Mr Inayat, stating:

There is no evidence of what, if any, action was taken in response to this suggestion by Mr Ibrahim. In any event, the distribution of the income of the Engadine Imaging Trust was entirely the decision of Advanced Imaging under cl 10.3(a) of the Engadine Trust Deed and not something over which Mr Ibrahim had any control.

On 2 May 2021, Mr Ibrahim sent an email with an attached letter to Jong Min Son, an employee of the Engadine Practice, copied to Mr Chaudhry. That letter, on the letterhead of Pulse Medical Imaging, concerned the termination of Jong Min Son’s employment with the Engadine Practice.

Under the heading ‘Termination of Your Employment’, the text of the letter relevantly stated:

I infer that Mr Ibrahim had to investigate and establish what had taken place before sending the notice of termination. There is no evidence that Mr Ibrahim consulted with either Dr Kyatt or Mr Chaudhry before taking the step of terminating the employment of Jong Min Son, although I infer from the copying in of Mr Chaudhry to the email that the termination did not come as a surprise to him.

There is evidence that on 2 September 2022 the original recipient of the email, Jong Min Son, forwarded to Dr Kyatt the email of 2 May 2021.

The financial statements for EMIS for the year ending 30 June 2021 show that the total income was $1,591,392.57 and total expenses were $1,559,148.99 (including a consulting fee of $450,000), making the net profit of $32,243.58. Those financial statements also demonstrate that there was a total equity deficiency of $50,850.40. Dr Kyatt saw these financial statements at the end of that financial year (T85).

The plaintiffs submit that despite the recording of the small net profit, the financial statements for the year ending 30 June 2021 demonstrate that the Engadine Practice was more profitable that it appears because the unit holders took out their profit share in the form of the consulting fee of $450,000.00 which, when added back to the net profit of $32,243.58, shows a greater net profit of $482,243.58. They also say that Dr Kyatt’s 51% share of the consultancy fee was $229,500.00.

On 17 August 2021 at 1:39pm, Mr Chaudhry sent an email to Paula Milsted, the Property Administrator of All Star Property Group, asking for an update on the time remaining for the Lease in respect of the Engadine Premises.

On 17 August 2021 at 2:00pm, Ms Milsted sent an email to Mr Chaudhry in reply, stating that the Lease was due to expire on 31 January 2022.

On 17 August 2021 at 9:35pm, Mr Chaudhry forwarded Ms Milsted’s response to Mr Ibrahim, asking Mr Ibrahim what he wanted Mr Chaudhry to reply with.

On 18 August 2021 at 12:01pm, Mr Ibrahim emailed Mr Chaudhry with a draft response to Ms Milsted in the following form:

On 18 August 2021 at 12:10pm, Mr Chaudhry sent an email to Ms Milsted in the precise form of the draft suggested by Mr Ibrahim.

On 18 August 2021 at 12:42pm, Ms Milsted replied to Mr Chaudhry, stating that she would pass on his correspondence to the lessors and would be in touch with the suggested terms in the future.

On 8 September 2021, Ms Milsted sent an email to one of the lessors of the Engadine Premises, Don Zafiropoulos, in the following form:

On 13 October 2021, Abbey Freeman (the Leasing Administrator of All Star Property Group) sent an email to Mr Inayat noting that the Lease for the Engadine Premises was due to expire on 31 January 2022 and asking whether he intended to renew the Lease or continue to occupy the Engadine Premises and if so, what length of lease he was interested in securing with the lessors. Ms Freeman concluded by asking Mr Inayat to provide a prompt reply, as if he did not wish to renew they would need to market the Engadine Premises to secure a replacement tenant for the lessors.

On 14 October 2021 at 8:18am, Mr Inayat forwarded Ms Freeman’s email of 13 October 2021 to Mr Chaudhry, Mr Ibrahim and Dr Kyatt, saying:

On 14 October 2021 at 8:20am, Mr Inayat sent an email responding to Ms Freeman, stating that his firm acted as the accountants, he had passed on her email to the client, and that he would ensure that they would get back to her as soon as possible.

Also on 14 October 2021 at 8:20am, Mr Inayat sent an email to Dr Kyatt asking if he wanted to discuss the Lease renewal further and suggesting that Dr Kyatt speak with Mr Chaudhry to discuss the terms of renewal. On the same day at 5:36pm, Dr Kyatt sent an email in reply to Mr Inayat stating:

On 31 October 2021, the period within which the option to renew the Lease of the Engadine Premises could be exercised expired.

On 25 November 2021 at 3:27pm, Mr Chaudhry sent an email to Mr Inayat, in reply to Mr Inayat’s email of 14 October 2021 at 8:18pm forwarding Ms Freeman’s email of 13 October 2021. In that email, Mr Chaudhry said:

On 25 November 2021 at 3:46pm, Mr Inayat then sent the following email to Ms Freeman, copied to Mr Chaudhry:

I infer that Mr Inayat sent this email after speaking to Mr Chaudhry and receiving instructions to take steps to renew the Lease.

Dr Kyatt said in evidence that from this email, he understood that Messrs Chaudhry and Ibrahim had agreed to the renewal of the Lease and that it would be renewed. But the email, on its face, was not sent or copied to Dr Kyatt, and he did not give evidence that he spoke to Mr Inayat about the issue so the correctness of his evidence may be doubted.

I infer from this email that at that time, Mr Chaudhry would have believed that the Lease would be renewed, having directed Mr Inayat to inform the agent of that request and having seen that Mr Inayat had done as he instructed.

On 31 January 2022, the Lease expired in accordance with its terms and EMIS became a month-to-month tenant of the Engadine Premises.

On 23 February 2022 at 7:05pm, Mr Ibrahim sent an email to Mr Chaudhry, being an email that Mr Ibrahim proposed to send to All Star Property Group concerning the Lease. That email, addressed to Ms Freeman, was in the following terms:

The reference to “our lease” and “our relationship” in the draft email can only be to the Lease then held by EMIS (which had become month-to-month) and the relationship between EMIS and one of the lessors, Mr Zafiropoulos.

On 23 February 2022 at 7:24pm, Mr Chaudhry replied to Mr Ibrahim via email, saying “[p]erfect” and directing him to also copy the email to the email address used by Ms Milsted.

On 25 February 2022 at 12.00pm, Mr Ibrahim sent an email to Ms Freeman and Ms Milsted in substantially the same form as his proposed draft of 23 February 2022, with the final line reading ‘Rizwan Inayat is no longer the account [sic] for the company as such do not send him any correspondence.’ This email was copied to Mr Chaudhry and Jabran Chaudhry and attached the original Lease agreement as a pdf document. Tellingly, it was not copied to Dr Kyatt.

The evidence before me is that the new lessee proposed by Mr Ibrahim, Logan Medical Imaging Pty Ltd, is an entity of which Messrs Ibrahim and Chaudhry are the directors and equal shareholders. There is no evidence that Mr Inayat had ceased to be the accountant for EMIS at this time. In fact, the contemporaneous documents during 2022 suggest that Mr Inayat remained the accountant for EMIS. I find that the statement in the email that Mr Inayat had ceased to be the accountant was false and that the statement that Mr Inayat should not be sent any correspondence by All Star Property Group was said to ensure that it did not come to Mr Inayat’s notice that an attempt was being made to renew the Lease for the Engadine Premises in the name of Logan Medical Imaging.

On 28 February 2022 at 12:32pm, Ms Milsted sent an email to Mr Zafiropoulos as lessor of the Engadine Premises informing him that the tenant of the Engadine Premises, Mr Ibrahim, had contacted the agents regarding the Lease and had indicated that he wished to ‘scrap’ what had previously been done and have a new lease put in place. In her email, Ms Milsted noted that Mr Ibrahim had requested the following changes:

I infer from the matters contained in Ms Milsted’s email of 12:32pm that between 12:00pm and 12:32pm, Mr Ibrahim spoke to Ms Milsted to provide her with additional details about the proposed terms of the new lease.

On 28 February 2022 at 4:40pm, the lawyers for the lessors of the Engadine Premises, GA Lawyers, sent an email to Ms Milsted confirming that Mr Zafiropoulos had instructed them to prepare the new lease document and asking her to confirm what the rent was prior to 1 February 2022 and what the rent increased to on 1 February.

On 14 March 2022, GA Lawyers sent Ms Milsted a draft of the new lease with a commencing date of 1 February 2022, a terminating date of 31 January 2026 and 3 x 4 year option periods, which named Logan Medical Imaging as the lessee, Mr Ibrahim as the guarantor, and provided for Messrs Ibrahim and Chaudhry as the directors of Logan Medical Imaging to sign on the execution page.

For reasons not disclosed by the evidence, this proposed leasing transaction did not proceed.

On 21 March 2022, Engadine Medical Imaging (the second defendant in these proceedings) was incorporated, with Mr Ibrahim as its sole director, secretary and shareholder. The difference between the full names of Engadine Medical Imaging and EMIS (Engadine Medical Imaging Services) is that the latter includes the word “Services” and the former does not.

In around May 2022, steps were commenced to rebrand and bring the Woonona Practice, the Warrawong Practice, the Warilla Practice, the Dapto Practice and the Engadine Practice, all previously part of Southern Imaging Group (SIG) and/or Pulse Medical Imaging, under the umbrella business name of ‘Focus Radiology Group’. The evidence indicates that the rebranding process was embarked upon by Mr Chaudhry, unbeknownst to Dr Kyatt, and substantially with the assistance of Ms Coles who was working for the businesses using SIG and/or Pulse Medical Imaging as their trading names.

Ms Coles is a former staff member at the previous Dapto radiology practice, who appears to have commenced employment either with the Dapto Practice upon its establishment jointly by Mr Ibrahim, Mr Chaudhry, Dr Kyatt and Dr Jasim, or with one or more associated entities controlled by Mr Chaudhry and/or Mr Ibrahim and forming part of SIG. Before the change to Focus Radiology, her email address was dcoles@sig.health and her email sign off was:

On 30 May 2022, Ms Coles sent an email to Chris Germon, a consultant at Crowd IT, copied to Mr Chaudhry, in which she requested that the following, among other items, be actioned by the end of July 2022:

Throughout June 2022 and into July 2022, Ms Coles had further email correspondence in connection with the rebranding process with Mr Germon of Crowd IT to find out how it was progressing, as well as with professional design and printing services engaged to design and/or supply, inter alia, Focus Radiology letterheads, appointment cards, business cards, referrals, marketing folders, film bags, and signage, including a Focus Radiology logo sign above the entrance to the Engadine Premises and a Focus Radiology logo lightbox to be hung from the awning outside the Engadine Premises. Mr Chaudhry was copied in to most of this correspondence.

On 15 June 2022, Mr Chaudhry registered the business name ‘Focus Radiology’. Also on this date, Mr Chaudhry incorporated Focus Radiology Warrawong and Focus Radiology Dapto, with Mr Chaudhry as the sole director, secretary and shareholder of both companies.

An ASIC search of the business name ‘Focus Radiology’ reveals that:

On 17 June 2022, the Dapto Practice was sold by Dapto Imaging Pty Ltd as trustee for the Dapto Medical Imaging Unit Trust to Focus Radiology Dapto Pty Ltd as trustee for the Focus Radiology Dapto Trust for $1 and the assumption of specified liabilities. Mr Ibrahim signed the contract on behalf of Dapto Imaging Pty Ltd and Mr Chaudhry signed on behalf of Focus Radiology Dapto Pty Ltd.

On 20 June 2022, the Warrawong Practice was sold by Warrawong Imaging Pty Ltd as trustee for the Warrawong Imaging Unit Trust to Focus Radiology Warrawong Pty Ltd as trustee for the Focus Radiology Warrawong Trust for $1 and the assumption of specified liabilities. Mr Ibrahim signed the contract on behalf of Dapto Imaging Pty Ltd and Mr Chaudhry signed on behalf of Focus Radiology Warrawong Pty Ltd. (It appears that the vendor name is incorrectly listed as ‘Dapto Imaging Pty Ltd’ on the execution page of this contract).

On 4 July 2022, Ms Coles and Mr Chaudhry exchanged emails about the proposed referral form for Focus Radiology, which included the details of the Engadine Practice at the address of the Engadine Premises with a map of its location.

On 9 July 2022, Ms Coles sent an email to Mr Germon seeking an update on the rebranding process and stipulating a deadline of 8 August 2022.

On 11 July 2022, Mia Coles, Focus Radiology’s Marketing Liaison Officer, sent an email to a number of physiotherapy, dental, podiatry and massage practices to announce the launch of Focus Radiology, relevantly stating:

On or about 7 July 2022, Engadine Medical Imaging entered into a lease for the Engadine Premises (New Lease). The circumstances in which that transaction occurred are not disclosed by the evidence. The New Lease itself is not in evidence.

On 12 July 2022 at 8:00pm, Mr Ibrahim sent a letter by email to Dr Kyatt and Mr Chaudhry. The letter was addressed to EMIS and stated the following (emphasis in original):

The letter was signed by Mr Ibrahim in his capacity as director of Engadine Medical Imaging.

On 12 July 2022 at 8:59pm, Mr Chaudhry replied by email to Mr Ibrahim, copying in Dr Kyatt, stating:

On 12 July 2022 at 9:06pm, Mr Chaudhry sent an email to Mr Inayat and Dr Kyatt, forwarding Mr Ibrahim’s email and attached letter of that day and saying:

The fact that Mr Chaudhry was consulting with Mr Inayat in relation to the lease of the Engadine Premises in July 2022 (whether or not this consultation was sincere, or a disingenuous performance intended for Dr Kyatt) indicates that Mr Inayat continued to serve as the accountant for EMIS and the Engadine Practice, contrary to what had been communicated by Mr Ibrahim to All Star Property Group in Mr Ibrahim’s email of 25 February 2022 (referred to above). Mr Chaudhry had been copied to that email and had also been sent the email in draft form before it was sent to All Star Property Group.

In light of the February 2022 correspondence with All Star Property Group and the Focus Radiology rebranding project which was occurring at this time, I was invited by the plaintiffs to infer that the emails sent by Mr Chaudhry on 12 July 2022 were “theatre” for the benefit of Dr Kyatt and intended to conceal Mr Chaudhry’s true involvement in steps taken by Mr Ibrahim to procure the New Lease of the Engadine Premises on behalf of Engadine Medical Imaging. The available inference I draw is that Mr Chaudhry knew that Mr Ibrahim was taking steps to obtain the New Lease in the name of Engadine Medical Imaging because the Focus Radiology rebranding process was being coordinated by Mr Chaudhry and included the Engadine Practice located at the Engadine Premises. However, there is no conclusive evidence that Mr Chaudhry was directly or actively involved in obtaining the New Lease and I cannot use a Jones v Dunkel inference to fill gaps in the evidence.

Dr Kyatt was cross-examined at length about the significance to him of receiving Mr Ibrahim’s letter of 12 July 2022 (T98–99) as follows:

In my assessment of this evidence, from the time at which Dr Kyatt received Mr Ibrahim’s letter of 12 July 2022 at 8:00pm, Dr Kyatt was well aware that Mr Ibrahim wanted to take the business of the Engadine Practice and run a business in place of it. Dr Kyatt’s refusal to concede that this would or would not be a competing business relative to the Engadine Practice is of no importance. Dr Kyatt knew that from this time the Engadine Practice was at risk, due to the looming prospect of a practice that Mr Ibrahim wished to establish in place of it.

On 13 July 2022 at 10:49pm, Dr Kyatt sent an email to Ms Milsted of All Star Property Group in which he introduced himself as the majority shareholder and one of the directors of EMIS at the Engadine Premises. Dr Kyatt said he had received a letter from one of his partners (being Mr Ibrahim’s letter of 12 July 2022, which Dr Kyatt attached to his email) “claiming leasing” of the Engadine Premises and warning EMIS to vacate the Engadine Premises within 30 days. Dr Kyatt said that the letter had caused a huge shock and disturbance to everyone and the business and that he was currently seeking legal advice and action. Dr Kyatt said (grammatical errors left in place):

On 14 July 2022 between 8:45am and 11:16am, several emails were exchanged between Dr Kyatt and Ms Milsted in which:

Around this time, Dr Kyatt retained solicitors, New South Lawyers, to assist him in seeking to recover the Lease on behalf of EMIS.

On 19 July 2022, New South Lawyers sent a letter to Mr Ibrahim responding to Mr Ibrahim’s letter of 12 July 2022. In that letter, New South Lawyers:

On 21 July 2022, the lawyers for Mr Ibrahim, Bridges Lawyers, sent a letter to New South Lawyers replying to their letter of 19 July 2022. Bridges Lawyers confirmed that they acted for Mr Ibrahim and Engadine Medical Imaging and sought clarification as to whether New South Lawyers acted on behalf of Dr Kyatt personally or EMIS.

On 1 August 2022, Mr Ibrahim sent an email to Ms Milsted asking her to send the bond back to EMIS and provide EMIS with a notice to vacate the Engadine Premises, asking her to ensure that it was done that evening or the following day, and to send him a copy or blind copy him in.

On 4 August 2022, New South Lawyers wrote to All Star Property Group confirming that they acted for EMIS; asserting that the New Lease of the Engadine Premises had been negotiated and entered into by the lessors and Mr Ibrahim for Engadine Medical Imaging without the consent or knowledge of EMIS and in circumstances where EMIS had previously sought to exercise the option to renew the Lease; and asking that they be furnished with copies of all communications between Mr Ibrahim and All Star Property Group regarding the Lease and entry into the New Lease. New South Lawyers also noted that EMIS would not capitulate to Mr Ibrahim’s request that they vacate the Engadine Premises by 10 August 2022, and referred to the potential need (should Mr Ibrahim and Engadine Medical Imaging fail to preserve the status quo pending resolution of the dispute) to join the lessors to any application commenced in this court seeking urgent injunctive relief to resist the eviction of EMIS from the Engadine Premises.

Between August and November 2022, New South Lawyers, Bridges Lawyers and GA Lawyers (the lawyers for the lessors) exchanged further written correspondence about the matter (described in more detail below).

On 29 July 2022, Ms Coles sent an email to various Pulse Medical Imaging personnel, copied to Mr Chaudhry, stating that they would be rolling out new software for the practices which needed all contracts to be uploaded and asked that anyone with a contract email a copy to her. Taylah Bampton, an employee of EMIS, was among the recipients of this email.

On 9 August 2022, a meeting was held and attended by staff existing and prospective of the radiology practices forming part of the Focus Radiology Group (Focus staff). The minutes of that meeting, circulated by Ms Coles and copied to Mr Chaudhry, record the following agenda item:

On 11 August 2022 at 11:04am, Ms Coles sent an email to Focus staff, copied to Mr Chaudhry, directing them to start sending out a template email notifying referrers that ‘Focus Radiology (located at Dapto, Warrawong, Woonona, Warilla, Engadine) (formerly Pulse Medical Imaging and Southern Imaging Group)’ had upgraded its imaging and reporting systems. Ms Coles said that the Focus URL had to start being used from that day.

On 11 August at 11:51am, an email was sent to Ms Coles by a Focus staff member, Eva Guyer, attaching screenshots of a fax and email in the form of a template advertisement intended for distribution to service providers, advising them as follows (emphasis in original):

On 14 August 2022, Ms Coles sent an email to Focus staff, copied to Mr Chaudhry, informing them that all email correspondence from Ms Coles going forward would be to their ‘@focusrad.com.au’ emails only and suggesting that they turn on forwarding from their Pulse emails to their Focus emails.

On 15 August 2022, Ms Coles sent an email to Focus staff, copied to Mr Chaudhry, with the subject line ‘Referrals / Film Bags / Appointment Cards’, informing them that new referrals, film bags and appointment cards were going to be delivered to the clinics in the coming week. She also said (emphasis in original):

The referral forms attached to this email indicated the practice locations for Focus Radiology, which included the Engadine Premises.

On 16 August 2022, a Focus staff member, Erin Furlong (efurlong@focusrad.com.au), sent an email to Crowd IT, copied to Ms Coles, requesting that email forwarding be set up as follows:

On 22 August 2022, digital mock-ups of Focus Radiology Group-branded imaging request forms were sent by email to Ms Coles and other Focus staff. These proofs identify Southern Imaging Group Dapto as the client. These forms also indicated the practice locations for Focus Radiology, which included the Engadine Premises.

On 22 August 2022, a promotional Instagram post by the Focus Radiology Group account (using the handle ‘@focus_radiology’) was published. That post read:

On 30 August 2022 at 1:42pm, Mr Ibrahim sent an email to Bradley Garland, the ‘Licensee in Charge’ of All Star Property Group, copied to Ms Milsted, with the subject line ‘Urgent meeting request – Suite 3, 24 Station Street, ENGADINE NSW, 2233’, asking if the two of them could meet to “discuss frankly what the landlord wants”.

On 30 August 2022 at 1:47pm, Mr Garland replied by email to Mr Ibrahim, saying “the landlord has a lease, so they are satisfied with the situation” and indicating that Mr Ibrahim should be more specific about his reasons for wanting to meet.

On 30 August 2022 at 3:08pm, Mr Ibrahim sent an email to Mr Garland stating that he was happy that the lessors were satisfied, detailing his history of operating radiology practices out of the Engadine Premises over the past 16 years, and observing that Dr Kyatt had relocated to Jordan and seemed to have “lost interest in his Australian [business] commitments”. Mr Ibrahim concluded by issuing Mr Garland with the following ultimatum:

On 30 August 2022 at 3:29pm, Mr Garland responded by email to Mr Ibrahim, stating that the lessors were not in any position of conflict and had a legally executed and enforceable lease, Mr Ibrahim’s “internal matters in relation to directorship/shareholdings of companies and any fiduciary obligations past or present are a matter for you and your business associates”, and that he (Mr Garland) was available to meet with Mr Ibrahim next week if he wished to discuss the matter further. Mr Garland concluded:

On 31 August 2022 at 8:21am, Mr Ibrahim sent an email to Mr Garland in which he denied that the situation had anything to do with “alleged fiduciary obligations”; emphasised that his concern was Dr Kyatt’s attempts to recover the Lease of the Engadine Premises (stating “[i]f I evict [Dr Kyatt], he will sue [the lessors] and myself for Relief against forfeiture and try to have the new lease transferred to him”); again urged Mr Garland to issue EMIS with a 30-day vacate notice and to officially terminate any prior month-to-month lease; and again stated that if Dr Kyatt was the preferred tenant, he was content to “walk away and start a new practice up the road with my team”.

On 31 August 2022 at 8:51am, Mr Garland responded by email to Mr Ibrahim as follows:

On 2 and 5 September 2022, Mr Ibrahim and Mr Garland exchanged emails about them meeting on 6 September 2022. There is no evidence of whether this meeting occurred and, if it did, what took place at the meeting.

On 15 September 2022, Mr Ibrahim emailed Mr Garland asking him to let Mr Ibrahim know urgently who the lessors of the Engadine Premises had chosen as tenant and indicating that the lessor at alternative premises at 1–3 Station Street, Engadine (Focus Engadine Premises) “is very happy for my team and me to be there, and there is room also to have an MRI machine there”.

Following on from their correspondence in July 2022 (referred to above), throughout August and September 2022, New South Lawyers for Dr Kyatt and EMIS and Bridges Lawyers for Mr Ibrahim exchanged emails and letters about allegations concerning the New Lease, an alleged JVA and alleged fiduciary obligations said to be owed by Mr Ibrahim.

On 4 August 2022, New South Lawyers sent a letter by email to Bridges Lawyers referring to EMIS occupying the Engadine Premises pursuant to the Lease and the negotiation of the New Lease by Mr Ibrahim, which, they alleged, had been done without the consent or knowledge of EMIS. New South Lawyers stated:

New South Lawyers concluded by inviting discussions to resolve the dispute, failing which they had instructions to apply to this court for urgent ex parte injunctive relief to prevent the eviction of EMIS from the Engadine Premises.

On 5 August 2022, Bridges Lawyers responded in a letter sent by email to New South Lawyers which relevantly stated (emphasis in original):

Bridges Lawyers concluded by stating that their clients agreed without admissions and without prejudice to preserve the status quo for the continuing occupation of the Engadine Premises by EMIS until the earlier of 72 hours after notice was given by or on behalf of their client that resolution of the dispute was not possible, or resolution of the dispute.

On 18 August 2022, Bridges Lawyers sent a letter by email to New South Lawyers which, amongst other things, stated:

On 23 August 2022, New South Lawyers sent a lengthy letter by email to Bridges Lawyers responding to their letter of 18 August 2022. The letter covered numerous matters, including Mr Ibrahim’s interest in the Engadine Practice, allegations that Mr Ibrahim was an officer of EMIS owing fiduciary obligations to EMIS and the Engadine Practice and that he breached those obligations by negotiating the New Lease and seeking to evict EMIS from the Engadine Premises. In the letter, New South Lawyers also alleged that Dr Kyatt, Mr Ibrahim and others were joint venture partners although there were no formal joint venture or partnership agreements.

On 1 September 2022, Bridges Lawyers responded in a letter sent by email to New South Lawyers asking them to identify the terms of the alleged JVA, including when it was entered into and the precise parties to the alleged agreement. In response to the allegation that Mr Ibrahim was an officer of EMIS, Bridges Lawyers stated that Mr Ibrahim was not a formally appointed director of EMIS, and that he had no involvement or control of the day-to-day conduct of the Engadine Practice.

On 21 September 2022, GA Lawyers (on behalf of the lessors of the Engadine Premises) wrote to New South Lawyers via email, referring to the New Lease, indicating that the lessors did not wish to involve themselves further in any internal dispute between Engadine Medical Imaging and EMIS and stating that they were instructed that the lessors were agreeable to assigning the New Lease to EMIS.

Throughout all of these communications, EMIS remained in occupation of the Engadine Premises.

On 5 September 2022, a distribution of profits from the Engadine Practice occurred. At 4:04pm that day, Mr Inayat sent an email to Mr Chaudhry with the subject line ‘Engadine Distribute’, noting that each of Dr Kyatt, Mr Chaudhry and Mr Ibrahim should receive $61,200, $25,080 and $39,600 respectively into their business accounts. At 7:15pm that day, Mr Chaudhry emailed Dr Kyatt and Mr Ibrahim to confirm that the distribution had been made and that Dr Kyatt’s amount had been transferred to his UAE bank account.

This email indicated that Mr Inayat was acting as the accountant of the Engadine Practice, which is again contrary to what had been stated in Mr Ibrahim’s email of 25 February 2022 to All Star Property Group (referred to above).

In late September and early October 2022, communications took place between Mr Ibrahim and Anthony Bouteris of Raine and Horne Commercial regarding the Focus Engadine Premises.

On 27 September 2022, Mr Ibrahim attended the Focus Engadine Premises and met with Mr Bouteris, who later sent an email to Mr Ibrahim with an attached brochure, survey and building plans of the entire site and building.

On 29 September 2022, Mr Ibrahim sent an email to Mr Bouteris stating proposed terms for a lease of the Focus Engadine Premises, asking Mr Bouteris to let him know urgently if the lessor would like to process it and noting that he had “approval at another location up the road that I can only delay for a day or two”.

On 30 September 2022, Mr Bouteris sent an email to Mr Ibrahim saying that he had passed Mr Ibrahim’s email on to the owner and was waiting for him to come back. Mr Bouteris said he would get back to Mr Ibrahim straight away.

On 5 October 2022, Mr Bouteris sent an email to Mr Ibrahim setting out the final agreed terms of a lease of the Focus Engadine Premises (Focus Engadine Lease), as previously discussed by the two of them over the phone. Those agreed terms included:

On 7 October 2022 at 10:09am, Mr Ibrahim sent an email to Mr Bouteris indicating his readiness to enter into the Focus Engadine Lease, confirming that the lessee would be Engadine Medical Imaging, noting his own details for the purposes of the personal guarantee and stating that for the purposes of the transaction his solicitors would be Madison Marcus.

On 7 October 2022 at 10:15am, Mr Bouteris replied by email to Mr Ibrahim to say that he would do the memorandum of lease that day.

On 10 October 2022, Mr Ibrahim paid the deposit in respect of the Focus Engadine Lease. On 11 October 2022, Raine and Horne Commercial sent an email to Mr Ibrahim confirming receipt of his deposit in their trust account.

As stated below, the Focus Engadine Lease was executed on 22 November 2022.

On 13 September 2022, an employee of EMIS, Ms Bampton, sent an email to a specialist medical practice in Miranda, Sports Medicine Institute, using a Focus Radiology email address and a sign off of (emphasis in original):

Also on 13 September 2022, Focus Radiology’s Marketing Liaison Officer, Erin Furlong, sent an email to various medical practices, which relevantly stated:

On 30 September 2022, an email exchange took place between Focus staff members (Ms Furlong and Ms Coles) concerning a proposed email communication to local medical practices with a brochure advertising the availability of PRP injection procedures at Focus Radiology’s Dapto and Woonona clinics. The brochure is not in evidence. Ms Coles was asked by Ms Furlong whether the email when sent to medical practices in the Engadine area should be identified as Focus Radiology, and Ms Coles replied:

I was invited by the plaintiffs to find that this was an effort made to conceal the Focus Radiology rebranding from EMIS. I do not make that finding. The brochure is not in evidence and the email only refers to a service being offered at the Dapto and Woonona clinics. It is therefore an advertisement of the Focus Radiology business at those clinics.

On 26 October 2022, Focus Radiology made a Facebook post with graphics introducing Focus Radiology in Engadine, Woonona, Dapto, Warrawong and Warilla, stating:

On 7 November 2022, Ms Coles sent an email to Ms Bampton, Ms Furlong and Karen Davison of Focus Radiology asking whether any referral pads had been dropped off for the Engadine Practice. That day by email in response, Ms Davison said that they no longer had any of the EMIS referral pads left, just the Focus Radiology ones.

On 3 November 2022, Bridges Lawyers sent a letter to New South Lawyers marked “Without Prejudice Save as to Costs”, advancing a settlement offer including the following proposed terms:

In cross-examination (T71–72), Dr Kyatt said that he read this letter carefully upon receiving it and that he had the benefit of legal advice about the interpretation of it from his lawyer, Dragan Gasic of New South Lawyers. Dr Kyatt said that the legal advice was provided in communications he had with New South Lawyers, including by telephone. Dr Kyatt said that from November 2022 to July 2023 in general he followed and agreed with the advice provided by Mr Gasic (T72–73).

Dr Kyatt also said in cross-examination that in late 2022 and early 2023 he also took and followed advice from Toufic Bazouni of New South Lawyers (T80).

In further cross-examination, Dr Kyatt initially denied that at the time the offer in the 3 November 2022 letter was made, he understood that the $700,000 figure represented consideration for both the transfer or redemption of Mr Ibrahim’s units in the Engadine Imaging Trust and the assignment of the New Lease (T71 and T73), but maintained that he had read the letter containing the offer carefully (T72 and T73–74). When Dr Kyatt was later questioned about his understanding of this offer in the context of a counter offer made by Dr Kyatt through a letter of 21 November 2022 from New South Lawyers to Bridges Lawyers (dealt with in more detail below), Dr Kyatt conceded that Mr Ibrahim was offering the two components in the offer of 3 November 2022 (T82–83).

Based on this, I consider it is damaging to Dr Kyatt’s credit that his initial evidence about his understanding of the offer cannot be accepted as any careful reading of it shows that the $700,000 payment was plainly proposed for the transfer of Mr Ibrahim’s units in the Engadine Imaging Trust in addition to the assignment of the New Lease. Further, when confronted in later questioning, Dr Kyatt readily conceded what he should have conceded in the initial questioning but did not. It was suggested to Dr Kyatt that his earlier evidence on this matter was false but he claimed that his later evidence was merely clarifying his earlier evidence. In my assessment, Dr Kyatt’s earlier evidence was incorrect and unreliable. I do not need to go so far as to find that it was deliberately so.

In cross-examination, Dr Kyatt said that he had access to the bank statements for the Engadine Practice and also agreed that around this time (late 2022), he arrived at his own assessment of the profitability of the Engadine Practice on the basis of those financial records, from which he developed a general impression that the business was in good health (T74–75). Dr Kyatt agreed that he communicated frequently with his accountant, Mr Inayat, in 2022 but denied that he had a conversation with him in late 2022 about the value or profitability of the Engadine Practice (T74–76).

On 10 November 2022 at 2:01am, Dragan Gasic of New South Lawyers sent an email to Dr Kyatt, referring to Bridges Lawyers’ settlement offer of 3 November 2022, stating:

When asked in cross-examination whether he proceeded to provide Mr Gasic with the financial information on the value of the Engadine Practice’s business sought, Dr Kyatt indicated that he most likely had, and that it would have been in documentary form (T76) and sourced from Mr Inayat in the form of up-to-date information about the Engadine Practice's financial performance (T76–77). Throughout this line of questioning, however, Dr Kyatt maintained that his own assessment of the value of the Engadine Practice’s business at this time was based on his prior appraisal of the company’s bank statements from time to time and the figure arrived at by Mr Ibrahim and set out in the offer of 3 November 2022. Dr Kyatt resisted the suggestion that he knew that Mr Ibrahim’s initial offer in the 3 November 2022 letter was unsupported by any evidence about the value of the business (T78–79).

It does not reflect well on Dr Kyatt’s credit that his affidavits in the proceedings did not reveal that he was communicating with Mr Inayat to form his own assessment of the value of the Engadine Practice at this time (T77–78). Nor does it reflect well on Dr Kyatt’s credit that he resisted the suggestion that the amount of $700,000 contained in the 3 November 2022 letter was unsupported by any evidence (when it obviously was not) and was simply a negotiating position adopted by Mr Ibrahim (which it obviously was) (T78–80). Mr Gasic was clearly looking to Dr Kyatt to provide him with information to support the valuation of the business in any counter offer as no such information had informed or been provided to support Mr Ibrahim’s offer.

On 10 November 2022 at 4:31pm, Dr Kyatt responded to Mr Gasic via email, saying:

I have dealt with the cross-examination of Dr Kyatt about this email in the course of my consideration of the cross-examination of Dr Kyatt about his email of 21 December 2022 at 5:03pm set out below.

On 11 November 2022 at 8:30am, Mr Gasic of New South Lawyers sent an email to Dr Kyatt stating:

In the email, Mr Gasic then outlined two issues, being, firstly, that EMIS did not exercise its right to exercise the option within the time prescribed by the Lease of which Mr Ibrahim took advantage and turned into an opportunity to take over the Lease and, secondly, seeking specific performance of an agreement to assign the New Lease which Mr Ibrahim withdrew from by his letter dated 3 November 2022. Mr Gasic recommended that advice be obtained from a barrister on the legal merits and obstacles of these issues. Mr Gasic recorded his understanding that Dr Kyatt was “costs sensitive” and also outlined the estimated costs of the three options of obtaining a barrister’s advice, drafting a letter to Bridges Lawyers with a counter offer (subject to Mr Ibrahim furnishing New South Lawyers with EMIS’s financial records) or drafting a letter to Bridges Lawyers demanding that Mr Ibrahim proceed with the agreement to assign the New Lease, failing which Dr Kyatt would commence legal proceedings.

On 11 November 2022 at 4:18pm, Dr Kyatt sent an email to Mr Gasic saying that he would go with option 3, being to draft a letter to Mr Ibrahim and the lessors’ lawyers “to correct their mess and reassign the lease within a specific time frame”, noting “[i]f they dont, we will go to proceed to court without further notice”. In cross-examination, Dr Kyatt denied that he selected this option because it was the cheapest of those which were contained in Mr Gasic’s email of 11 November 2022 at 8:30am (T91–93).

On 21 November 2022, GA Lawyers for the lessors of the Engadine Premises sent an email to New South Lawyers and Bridges Lawyers asking for an urgent update as to whether the internal dispute between their respective clients had been resolved. GA Lawyers also confirmed that the party in occupation of the Engadine Premises was required to continue to make payment of all rent and outgoings due and payable and asked for confirmation as to which entity was to remain the lessee of the Engadine Premises.

On 21 November 2022, New South Lawyers wrote to Bridges Lawyers, responding to their settlement offer of 3 November 2022 (defined in New South Lawyers’ letter of 21 November 2022 as the “Letter”). In their letter, New South Lawyers set out the chronology of the dealings between the parties in seeking to resolve the dispute and asserted that Mr Ibrahim’s settlement offer of 3 November 2022 was contrary to the position that had already been established and agreed between them by that time. In the letter of 21 November 2022, an earlier letter of 15 September 2022 from Bridges Lawyers to GA Lawyers is defined as the “Offer”, an email of 21 September 2022 from GA Lawyers to the parties is defined as the “Acceptance” and an email of 28 September 2022 from New South Lawyers to the parties is defined as the “Agreement”.

In their letter of 21 November 2022, New South Lawyers asserted (emphasis in original):

New South Lawyers’ letter of 21 November 2022 then contained the following counteroffer, open for acceptance until 5:00pm on 25 November 2022:

In cross-examination, Dr Kyatt agreed that he gave instructions to Mr Bazouni to send this letter and approved its contents before it was sent (T80–81). Dr Kyatt conceded that he knew that the counter offer in the letter of 21 November 2021 contained two components, which is the offer in paragraph 13(a) read with paragraph 11, being the buyout of Dr Kyatt’s units and an assignment of the New Lease. These were the same two components which Dr Kyatt ultimately conceded in cross-examination had been contained in the letter of 3 November 2022, which evidence and my assessment of it are dealt with above.

In further cross-examination, Dr Kyatt also answered that he agreed with the comment in paragraph 12(c) of New South Lawyers’ 21 November 2022 letter that Mr Ibrahim's assertion of the value of the business of the Engadine Practice contained in the letter of 3 November 2022 was unsupported by any valuation evidence (T83–84). Yet that evidence is directly contrary to the answers Dr Kyatt gave when he was cross-examined about the very same aspect of the 3 November 2022 letter as set out above (T78–79). This was further unsatisfactory evidence from Dr Kyatt which is damaging to his credibility as a witness.

On 22 November 2022, New South Lawyers sent an email to GA Lawyers, copied to Bridges Lawyers and All Star Property Group, in response to GA Lawyers’ email of 21 November 2022, stating that the dispute between the parties remained unresolved and confirming that EMIS would continue to pay rent in accordance with the terms of the Lease.

On 24 November 2022, GA Lawyers sent an email in response to New South Lawyers, copied to Bridges Lawyers and All Star Property Group, setting out the basis on which the lessors of the Engadine Premises would be willing to consent to an assignment of the New Lease from Engadine Medical Imaging to EMIS to enable EMIS to remain in occupation of the Engadine Premises.

On 28 November 2022, Bridges Lawyers sent a letter by email to New South Lawyers responding to New South Lawyers’ letter of 21 November 2022 denying the existence of a binding settlement agreement and denying that Mr Ibrahim owed and had breached any fiduciary obligations because he was not a director of EMIS, did not have any involvement or control of the day to day conduct of the business of EMIS and was not a party to any joint venture agreement. Bridges Lawyers also made a Further Counteroffer involving the assignment of the New Lease but excluding the redemption or sale of any units in the Engadine Imaging Trust. The Further Counteroffer was expressed to be open for acceptance until 5pm on 5 December 2022 and was put in these terms:

On 28 November 2022 at 5:45am, Mr Gasic forwarded the letter of that day from Bridges Lawyers to Dr Kyatt, stating that they would review and revert to him with a recommended response shortly.

On 28 November 2022 at 1:35pm, Bridges Lawyers sent an email to GA Lawyers and New South Lawyers responding to GA Lawyers’ email of 24 November 2022 to the parties, stating that:

In his affidavit sworn 31 January 2024, Dr Kyatt said:

Dr Kyatt was pressed at length on the truthfulness of this evidence in cross-examination by reference to Bridges Lawyers’ letter of 28 November 2022 and Bridges Lawyers’ email of 28 November 2022 (T110–115). Neither of those communications support an understanding of the sort to which Dr Kyatt deposed. The passage of the questions and answers Dr Kyatt gave in cross-examination on this issue reinforced my impression of Dr Kyatt as an unsatisfactory witness. Dr Kyatt was unable to identify the parts of either of these communications which gave his claimed understanding.

In effect, Dr Kyatt sought to distance himself from the sworn evidence contained in his affidavit of 31 January 2024 and instead tried to say that his understanding came from the legal advice that he received at that time. The manner in which Dr Kyatt answered these questions was very unimpressive, highlighted in the following excerpt (T111-114):

The fact is, Dr Kyatt did not gain the understanding he claimed on oath to have formed from Bridges Lawyers’ letter of 28 November 2022 and I reject his evidence to the contrary.

On 30 November 2022, Dr Kyatt sent an email to Mr Gasic stating:

Dr Kyatt was cross-examined about his reference in this email to what was being requested of him as “ransom” (T96). I have dealt with this cross-examination at my consideration of the cross-examination of Dr Kyatt about his email of 21 December 2022 at 5:03pm set out below.

On 1 December 2022 at 6:25am, Mr Gasic sent an email to Dr Kyatt containing his review of the Further Counteroffer and his recommendation that Dr Kyatt accept the Further Counteroffer. Importantly, Mr Gasic said:

In cross-examination (T95–96), Dr Kyatt agreed that in November or December 2022, Mr Gasic gave him some advice or spoke to him orally about the release that Mr Ibrahim was then offering, Dr Kyatt carefully considered Mr Gasic's advice about it and he paid particular attention to the release because it was something Dr Kyatt regarded as important.

On 1 December 2022 at 3:04pm, Dr Kyatt sent an email to Mr Gasic in reply, instructing him to accept the Further Counteroffer.

On 2 December 2022, New South Lawyers sent a letter by email to Bridges Lawyers responding to the Further Counteroffer, confirming that they were instructed to agree to all terms of the Further Counteroffer (subject to the provision of tax invoices supporting the Reimbursement request for $10,000 plus GST) and requesting that Bridges Lawyers furnish a draft deed of settlement and release at their earliest convenience.

On 19 December 2022, Bridges Lawyers sent an email to New South Lawyers which was marked “Without Prejudice, Save as to Costs” and attached a draft Deed of Settlement and Release between Engadine Medical Imaging, Mr Ibrahim, EMIS and Dr Kyatt. The draft Deed included the following provisions:

On 20 December 2022 at 4:00am, Mr Gasic sent an email to Dr Kyatt to which he attached his recommended amended draft Deed to propose to Bridges Lawyers for Dr Kyatt’s review. Mr Gasic stated:

In cross-examination (T96), Dr Kyatt said that he did not read the whole of the amended draft Deed but did read the important parts of it to satisfy himself, and that he trusted his lawyers and followed their advice.

On 20 December 2022 at 5:33pm, Dr Kyatt sent an email responding to Mr Gasic, relevantly stating (all grammatical errors left in place):

Under cross-examination (T97–98), Dr Kyatt said that by this time (late November 2022) he suspected that Mr Ibrahim might want to do something on his own in terms of business but denied that he knew in late 2022 that Mr Ibrahim might want to set up his own business and said he did not know anything of what Mr Ibrahim was doing at that stage. Dr Kyatt said (T98):

Dr Kyatt was then pressed on this evidence by reference to Mr Ibrahim’s letter of 12 July 2022, sent by email at 8:00pm, regarding the New Lease (T98–99). I have set out above my conclusions on the cross-examination of Dr Kyatt about the letter of 12 July 2022.

In my view, the statement made by Dr Kyatt in his email of 20 December 2022 at 5:33pm to Mr Gasic that “[w]ho knows what they plan next, it look like they are preparing for something else as they failed with this attempt” directly reflected Dr Kyatt’s state of mind that although he did not know the detail of what Mr Ibrahim was planning he thought it would be another “attempt” to take the business of the Engadine Practice from EMIS.

It is also abundantly clear from the email of 20 December 2022 at 5:33pm that Dr Kyatt regarded EMIS as “his”, with Dr Kyatt saying that Mr Ibrahim “fired one of my employees” (emphasis added). Further, the email also betrays Dr Kyatt’s view that he wanted to hold back documents he regarded as supporting a potential claim against Mr Ibrahim related to the firing of the employee so he could keep them “for the court if he doesn’t want to resolve the issue”.

On 21 December 2022 at 4:14pm, Dr Kyatt sent an email to Mr Gasic asking him if had time to talk.

On 21 December 2022 at 4:18pm, Mr Gasic sent an email to Dr Kyatt stating that they were preparing an email to Dr Kyatt with their recommended amendments to the draft Deed. Mr Gasic asked that Dr Kyatt give him a few hours, saying it would be best if they chatted after Dr Kyatt had considered the email and the proposed amended draft Deed.

On 21 December 2022 at 5:03pm, Dr Kyatt sent an email to Mr Gasic saying (all spelling and grammatical errors left in place):

Dr Kyatt agreed in cross-examination (T100) that in all likelihood he spoke to Mr Gasic over the phone after he sent this email.

In cross-examination (T93–96), Dr Kyatt agreed that he was referring to Mr Ibrahim as a “hijacker asking for a ransom” in his email of 10 November 2022 at 4:31pm, that he considered that Mr Ibrahim was seeking “ransom” in his email of 30 November 2022, and called Mr Ibrahim a “thief” in his email of 21 December 2022 at 5:03pm, but endeavoured to characterise each of these references as “reactive response[s]” or “frustration”. Under challenge that Dr Kyatt simply had no trust in anything Mr Ibrahim said to him in November 2022, whether by himself or through his lawyers, and did not want any more business dealings with him, Dr Kyatt’s evidence that he is a very patient person and 100% prepared to keep doing business in partnership with Mr Ibrahim is not believable in my assessment. Nor do I believe Dr Kyatt’s following further evidence in cross-examination (T104) about the reference to Mr Ibrahim as “the thief” in the email of 21 December 2022 at 5:03pm:

I consider that by this time Dr Kyatt truly believed that he could not trust anything that Mr Ibrahim or his lawyers said to him and he considered Mr Ibrahim to be a “thief” as a person, not just limited to these incidents.

Dr Kyatt also gave evidence in cross-examination that by this time he thought that Mr Ibrahim could not do business with Dr Kyatt and would not reciprocate in their business relationship (T96).

Dr Kyatt’s credibility as a witness was also further damaged by the cross-examination of him (T105) about his statement in the email of 21 December 2022 at 5:03pm, “I do like to put a condition on Mena to act in the best interest of Engadine services from now on”. I do not believe the answers he gave in the following passage (T104–105):

Dr Kyatt understood that the statement in the email did not assist his case in these proceedings, which at the time of the cross-examination included allegations of breaches of fiduciary duties against Mr Ibrahim based on the alleged JVA, so he sought to limit the perceived damage of the words he had used in the email. Such an approach is not in accord with a witness of truth to this court.

On 21 December 2022 at 10:02pm, Mr Gasic sent an email to Dr Kyatt to which he attached the draft Deed with recommended changes for Dr Kyatt’s review. Mr Gasic specifically noted that they had narrowed the definitions of Claim, Loss and Dispute in the draft Deed to apply to claims, losses and disputes that arise directly from the circumstances surrounding entry into the New Lease by Mr Ibrahim and his company as the lessee. Mr Gasic stated:

Dr Kyatt was cross-examined at length about these paragraphs in Mr Gasic’s email (T105–108). He said that Mr Gasic correctly recorded what Dr Kyatt had informed him as appears in the email but Dr Kyatt refused to accept that at this time, at least in late 2022, he believed that Mr Chaudhry and Mr Ibrahim were working against him and the interests of EMIS and their interests were aligned against Dr Kyatt’s interests. Dr Kyatt said that he had a suspicion (which he assessed as a 20% chance or less), not a belief (which he assessed as a 90% chance or more) that their interests were aligned against his, and it remained that way until February 2023 when he says that Mr Chaudhry refused to sign the guarantee for the lease of the Engadine Premises.

Whatever Dr Kyatt’s own claimed internal assessment of the probabilities representing a belief versus a suspicion, Dr Kyatt ultimately accepted that he knew that Mr Ibrahim and Mr Chaudhry might do things to hurt EMIS (T107.14–16).

Amongst Mr Gasic’s comments on the formalities of the draft Deed in the email of 21 December 2022 at 10:02pm was the following:

In cross-examination (T108–109), Dr Kyatt refused to concede that this passage of the email gave him an understanding that his lawyers were suggesting that Mr Ibrahim was under no obligation to act in the best interests of EMIS until there had been some form of document. I accept Dr Kyatt’s evidence about this point because I do not read Mr Gasic’s email to necessarily mean that his lawyers had such an understanding.

Mr Gasic concluded with his recommendation that Dr Kyatt instruct New South Lawyers to propose the draft Deed to Bridges Lawyers as amended and continue discussions.

In cross-examination (T105), Dr Kyatt said that he had carefully considered Mr Gasic's advice about the terms of the proposed release.

Among the marked changes proposed in the amended draft Deed (marked up in blue text) were the following:

In cross-examination (T101–102), Dr Kyatt could not specifically recall whether he had a conversation with Mr Gasic about the amended draft Deed after receiving it. In reading the amended draft Deed, Dr Kyatt understood that the text additions and crossings out in blue had been made by New South Lawyers (T102).

Dr Kyatt agreed in cross-examination (T103) that the lack of any amendment to recital H of the amended draft Deed means that he was content for it to be sent unamended to Bridges Lawyers, that he agreed with it and that leaving recital H unamended was a conscious decision on his part. Recital H read:

In further cross-examination (T103), although Dr Kyatt could not confirm that he read the amended draft Deed carefully before it was sent to Bridges Lawyers, he agreed that his practice would have been to read it carefully before it was sent to Bridges Lawyers.

On 22 December 2022 at 11:06am, Mr Gasic sent an email to Dr Kyatt referring to a telephone discussion between them the previous day where they took Dr Kyatt through the draft Deed as amended and explained to Dr Kyatt the operation and effects of each of the provisions of the draft Deed. In the email Mr Gasic confirmed a number of points on which he had received instructions from Dr Kyatt and attached the final version of the draft Deed with minor amendments concerning the narrowing of the scope of the definitions of Claim, Dispute and Loss following the discussion with Dr Kyatt. Mr Gasic concluded by asking Dr Kyatt to confirm his instructions to send the amended draft Deed to Bridges Lawyers later that day.

On 22 December 2022, New South Lawyers emailed Bridges Lawyers attaching Dr Kyatt’s proposed amendments to the draft Deed (in the form set out above).

There were comments in the margin of the amended draft Deed to make clear the basis of the suggested changes, which were said to limit the form of claims which were to be released to adhere to the terms of the Further Counteroffer so as not to extend beyond the dispute about the New Lease.

The profit and loss statement for EMIS for the year ending 31 December 2022 shows that the total income was $1,876,014.72 and total expenses were $1,766,170.54 (including a consulting fee of $188,487.27), making the net profit of $114,588.23.

There is no balance sheet for EMIS for the year ending 31 December 2022 so the equity position is unknown.

Another aspect of Dr Kyatt’s evidence which I reject is his attempt in cross-examination to suggest that he did not understand the financial statements of EMIS that were prepared each year and which he agreed he saw (T85). His evidence on this topic is not credible.

The evidence Dr Kyatt gave in cross-examination about this subject was as follows (T86–91):

The effect of this evidence is that Dr Kyatt said he was sent the financial statements by Mr Inayat for his approval which he signified by signing them but did not read them or understand the financial position of EMIS as set out in them because he was too busy doing his work as a radiologist to have time to do so. Dr Kyatt says that he took his information about the financial performance of the Engadine Practice from the bank account statements and that he relied on others to help him with his investments. I reject the central assertions in this evidence.

The evidence demonstrates that Dr Kyatt was an experienced business person whose personal accountant, Mr Inayat, sent him investment opportunities, such as child care centres, radiology practices and properties, for his consideration on a regular basis. It also shows that it was Dr Kyatt who insisted on having a 51% unitholding and management control of the Engadine Imaging Trust at the time it was established in February 2018. The central claim in Dr Kyatt’s evidence that he was not interested in the quantum of the income or expenses of the Engadine Practice and that he took all he needed to know about the financial state of the business from the balances in the bank account is simply not credible. Further, the fact that it was Dr Kyatt who attached the financial statements of EMIS to his April 2023 affidavit to rely on them in these proceedings without drawing attention to the fact that he claimed to have never read or understood them is also not to his advantage, to say the least.

In tandem with the events concerning the draft Deed, the business of Focus Radiology Engadine was being established at the Focus Engadine Premises.

On 22 November 2022, the Focus Engadine Lease was executed.

On 22 November 2022 at 3:55pm, Ms Coles sent an email to Ms Bampton (an employee of EMIS) attaching a written formal warning letter — significantly, on Focus Radiology letterhead — regarding her conduct in the workplace, citing instances of Ms Bampton arriving late, going home early and not checking referrals.

Also on 22 November 2022, Chris Germon of Crowd IT and Mr Ibrahim corresponded via email about a quote that had been provided by telecommunications company TPG Telecom for the price of installing internet at the Focus Engadine Premises.

From late November 2022 through to late February 2023, various steps were taken to get the radiology business of Focus Radiology Engadine up and running, many of them involving Ms Coles. Over this period, the following took place:

With few exceptions, the email address used by Ms Coles in the course of the correspondence described above was her gmail address, rather than her Focus Radiology email address. Given that Ms Coles did not give evidence, I infer that this was done to ensure that Ms Coles was not seen to be doing this work for Focus Radiology and not seen to be associated with Mr Chaudhry.

The plaintiffs submit that I should find that the rebranding of the various practices to Focus Radiology was discussed and agreed by Mr Ibrahim and Mr Chaudhry prior to 11 August 2022 and that Mr Ibrahim took active steps to take the business of EMIS and to set up the competing business on and from July 2022 to the knowledge of Mr Chaudhry. For the reasons set out below, I am prepared to draw those inferences.

Mr Ibrahim was in control of Engadine Medical Imaging setting up the Focus Radiology practice at the Focus Engadine Premises. Mr Chaudhry was in control of least Focus Radiology Dapto and Focus Radiology Warrawong. Ms Coles was employed by one of the Focus Radiology businesses, although it is not clear exactly which one. The rebranding was a fundamental matter to each of those businesses. The rebranding was a lengthy and coordinated exercise, spanning many months. There is evidence of the personal involvement of Mr Ibrahim and Mr Chaudhry in the rebranding at different times. Neither of them has given any evidence.

Ms Coles, who was clearly instrumental to the overall rebranding project, must have been working at the direction of Mr Ibrahim in relation to the Focus Radiology Engadine rebranding and at the direction of Mr Chaudhry in relation to the Focus Radiology Dapto and Warrawong rebranding. Ms Coles has not given evidence.

In light of the fact that Ms Coles was working at the direction of Mr Ibrahim and Mr Chaudhry at various times and employed by one or more of the entities that became part of the Focus Radiology Group, I consider that either of Mr Ibrahim or Mr Chaudhry would be expected to call Ms Coles as a witness to give evidence in their respective cases and that their failure to do so is unexplained.

The combination of all of these matters makes available an inference that the uncalled evidence of each of Mr Ibrahim, Mr Chaudhry and Ms Coles would not have assisted the respective cases of Mr Ibrahim and Mr Chaudhry. The unexplained failure to call evidence from each of Mr Ibrahim, Mr Chaudhry and Ms Coles also enables me to draw, with greater confidence, an inference unfavourable to each of Mr Ibrahim and Mr Chaudhry, since those witnesses, had they been called, clearly would have been in a position to cast light on whether that (unfavourable) inference should be drawn.

To be clear, the unexplained failure to call evidence from Mr Ibrahim and Ms Coles affects the inferences that can be drawn in the case against Mr Ibrahim and the unexplained failure to call evidence from Mr Chaudhry and Ms Coles affects the inferences that can be drawn in the case against Mr Chaudhry.

I also find that there is no evidence that Dr Kyatt knew or consented to the rebranding of the Engadine Practice to Focus Radiology Engadine. However, as I have already found above, I consider that from the time of the letter of 12 July 2022 at 8:00pm from Mr Ibrahim to Dr Kyatt and Mr Chaudhry, Dr Kyatt was well aware that Mr Ibrahim wanted to take the business of the Engadine Practice and install a business in place of it and Dr Kyatt knew that from this time the Engadine Practice was, accordingly, at risk.

On 15 February 2023, Bridges Lawyers emailed New South Lawyers, copying in GA Lawyers, with a further (third) version of the draft Deed which reinstated the previous form of the clauses that had been amended by New South Lawyers on the last occasion, stating:

The email also attached comments on a draft of the Deed of Assignment (draft Assignment Deed) to assign the New Lease to EMIS.

On 16 February 2023 at 7:05am, Mr Gasic forwarded to Dr Kyatt the Bridges Lawyers’ email of 15 February 2023 and its attachments, saying that he would review the documents and make a recommendation during the course of that day.

On 16 February 2023 at 9:37am, New South Lawyers sent a reply email to Bridges Lawyers, copied to GA Lawyers, stating that they were obtaining instructions.

On 16 February 2023 at 10:44am, Bridges Lawyers replied by email to New South Lawyers, copied to GA Lawyers, saying:

On 16 February 2023 at 4:28pm, Mr Gasic sent an email to Dr Kyatt forwarding him the email of 15 February 2023 from Bridges Lawyers which attached the amended draft Deed and the draft Assignment Deed. Mr Gasic noted as follows:

In the email, Mr Gasic also outlined the estimated costs for performing further work on the matter for Dr Kyatt.

In cross-examination (T115), Dr Kyatt agreed that when he read this email and the email of 15 February 2023 from Bridges Lawyers with the attachments he understood that Mr Ibrahim was suggesting that the releases be substantially widened in his favour, Mr Ibrahim wanted to change the proposed deed in a way that favoured him and Dr Kyatt saw that Mr Ibrahim was doing this to benefit himself. Dr Kyatt denied that he thought Mr Ibrahim was doing this in order to assist himself in running a competing business through Engadine Medical Imaging. I do not accept this evidence in light of the finding that I have made that from July 2022 Dr Kyatt was aware that Mr Ibrahim wanted to take the business of the Engadine Practice and install a business in place of it.

On 16 February 2023 at 7:00pm, Dr Kyatt sent an email to Mr Gasic in which he asked to be told the final cost for the further work, and indicated:

On 21 February 2023 at 3:59am, Mr Gasic sent an email to Dr Kyatt in which he provided advice on the amended draft Deed and the amended draft Assignment Deed. Wherever they appeared in the amended draft Deed, Mr Gasic highlighted the references to “and the Allegations” which had been added on Mr Ibrahim’s behalf to the end of each of the definitions of Claims, Dispute and Loss and in cl 5.2 of the amended draft Deed. Mr Gasic gave these comments about those provisions (all grammatical errors left in place):

Mr Gasic concluded his comments on the amendments to the draft Deed by saying that New South Lawyers did not see any issues arising from them and recommending that Dr Kyatt instruct them to write to Bridges Lawyers to say that they had no issue with them.

In cross-examination (T116), Dr Kyatt agreed that he understood when he got that email that Mr Gasic was recommending that the changes be accepted because he thought it was to Dr Kyatt’s advantage and that he accepted this advice.

During the course of further cross-examination about this email (T117–118), Dr Kyatt was questioned about the last paragraph of it set out above. Despite the first sentence of that paragraph clearly recording that Dr Kyatt had instructed Mr Gasic that Mr Ibrahim had taken money from an account held in the name of EMIS, Dr Kyatt sought to distance himself from that suggestion in a wholly unconvincing way. The following passage of the cross-examination shows Dr Kyatt seeking to give contradictory and evasive answers to what were straight-forward questions of him:

On 21 February 2023 at 4:25pm (this time may be an overseas time zone), Dr Kyatt sent an email to Mr Gasic thanking him for his email and saying:

On 21 February 2023 at 8:28am, Mr Gasic replied by email to Dr Kyatt saying that the red highlights were the amendments proposed by Mr Ibrahim and Engadine Medical Imaging and were to be included. Mr Gasic said that they did not see any issue arising from the request for these inclusions.

In cross-examination (T115–116), Dr Kyatt agreed that he understood that Mr Gasic was advising that these amendments should be approved.

On 21 February 2023 at 4:37pm, Dr Kyatt responded by email to Mr Gasic saying, “[t]hen that’s fine”.

On 22 February 2023 at 10:22am, New South Lawyers sent an email to Bridges Lawyers saying that they were still in the process of obtaining instructions and would revert as soon as they received them.

On 22 February 2023 at 3:00pm, Dr Kyatt called a meeting of the shareholders of Advanced Imaging, the sole shareholder of EMIS, and passed a resolution removing Mr Chaudhry as a director and secretary of EMIS. This left Dr Kyatt as the only director of EMIS. In cross-examination (T127–128), Dr Kyatt agreed that this was done without Mr Chaudhry’s knowledge or awareness as Dr Kyatt was in Jordan at that time and did not telephone Mr Chaudhry to give him notice of his proposed removal.

In cross-examination (T72–73), Dr Kyatt conceded that he neglected to send Mr Chaudhry an email notifying him of his removal as a director of EMIS, which he identified as the only occasion between November 2022 and about July 2023 on which he failed to act on the advice he received from New South Lawyers.

Dr Kyatt had received an email on 24 February 2023 from Mr Gasic with the draft form of an email to send to Mr Chaudhry informing him of his removal, which he did not send (T126–127).

There is no evidence that before the Deed of Settlement and Deed of Assignment (referred to below) were executed Mr Chaudhry was asked to sign them on behalf of EMIS. Dr Kyatt admits that he did not ask Mr Chaudhry to do so and Mr Inayat was not called as a witness to say that he had done so (T128).

In cross-examination (T129–130), Dr Kyatt was challenged about his failure to tell Mr Chaudhry that he was removing him as a director of EMIS even though it was a simple matter for Dr Kyatt to telephone or email Mr Chaudhry to inform him. In my assessment and having regard to Dr Kyatt’s credibility, Dr Kyatt deliberately did not tell Mr Chaudhry that he was removing him as a director of EMIS, despite his denial and his evidence that he simply forgot to do so. To my mind, it was too significant a matter to have simply been forgotten.

On 22 February 2023 at 3:00pm, Dr Kyatt also passed a resolution as the sole director of EMIS to approve the terms of the Deed of Settlement and Release and the Deed of Assignment of the New Lease and authorise Dr Kyatt to sign each of them on behalf of EMIS.

On 23 February 2023, the Deed of Settlement was executed between Engadine Medical Imaging, Mr Ibrahim, EMIS and Dr Kyatt, in a form that included the release in cl 5.2 that Bridges Lawyers had sought to retain. Relevant terms of the Deed of Settlement as executed are as follows:

It is abundantly clear that, throughout the negotiations of the Deed of Settlement and its execution, Dr Kyatt and EMIS were represented by solicitors, New South Lawyers, who provided advice, specific comments and proposed amendments to various clauses in the draft Deed of Settlement to Dr Kyatt and EMIS, including in relation to the matters the subject of the release in cl 5.2 and whether or not the “Allegations” as defined should form part of it.

In cross-examination (T118–120), Dr Kyatt suggested that he did not understand the references in recital H and cl 5.4(b) of the Deed of Settlement to be asserting that Mr Ibrahim had never been an officer or a director of EMIS, claimed that those were the conditions implied by Mr Ibrahim's lawyer not Dr Kyatt and then said that he had been forced to agree to them and he had no option other than to agree to them. The relevant passage of the cross-examination proceeded in the following way:

Ultimately, Dr Kyatt accepted that he could have refused to enter into the Deed of Settlement containing the provisions which had been requested by Bridges Lawyers on behalf of Mr Ibrahim and he conceded that he had not been forced or had no other option but to sign it. This cross-examination is illustrative of Dr Kyatt’s evasive approach to being questioned about multiple topics and then finally accepting the obvious, which is damaging to his credit and reliability as a witness.

Dr Kyatt conceded that in February 2023 there was nothing to stop Mr Ibrahim and Engadine Medical Imaging from acting in a way that might hurt the best interests of EMIS (T120–121).

In light of the numerous credibility findings I have already made against Dr Kyatt, I do not believe the evidence that he gave in cross-examination (T121) denying the propositions that in February 2023 he believed that Mr Ibrahim was a thief, a hijacker and a robber. I consider that in February 2023 Dr Kyatt regarded Mr Ibrahim as all of those things.

In further cross-examination (T121–123), Dr Kyatt agreed that he had carefully read the releases in cl 5 of the Deed of Settlement, he understood that he was releasing Mr Ibrahim and Engadine Medical Imaging in the terms set out in that document, he read cl 5.4 carefully and he knew that he had to agree to cl 5.4 to get the deal done to get the Lease back.

Dr Kyatt was then questioned about the “entire understanding” provisions in cl 13 of the Deed of Settlement and what he had relied upon in entering into the Deed of Settlement. The cross-examination flowed as follows (T123–124):

This last question and answer is of great significance to the factual basis to the misleading or deceptive conduct claim which Dr Kyatt has made against Mr Ibrahim, which I have dealt with below.

On 23 February 2023, the Deed of Assignment was also executed by Don and Helen Zafiropoulos as the lessors of the Engadine Premises, Engadine Medical Imaging as the assignor of the New Lease, Mr Ibrahim as the guarantor of Engadine Medical Imaging, EMIS as the assignee of the New Lease and Dr Kyatt and Advanced Imaging as the guarantor of EMIS. The effect of the Deed of Assignment was to assign the New Lease of the Engadine Premises from Engadine Medical Imaging to EMIS.

On 23 February 2023 at 5:03pm, Mr Gasic sent an email to Bridges Lawyers and GA Lawyers attaching the Deed of Settlement and Deed of Assignment, each executed by Dr Kyatt and EMIS, as well as the ASIC record for EMIS evidencing Dr Kyatt as the sole director.

On 27 February 2023, Bridges Lawyers sent an email to New South Lawyers and GA Lawyers attaching the Deed of Settlement and Deed of Assignment, each executed by Mr Ibrahim and Engadine Medical Imaging by way of exchange.

On 17 March 2023, Mr Chaudhry formally signed his written resignation as a director, manager and sonographer of EMIS with effect that day.

On 17 March 2023, Madison Marcus (the solicitors for Mr Chaudhry) wrote to Dr Kyatt adverting to the measures taken by Dr Kyatt to remove Mr Chaudhry as a director of EMIS on 23 February 2023, and stating that:

The letter attached the formal signed written notice of Mr Chaudhry’s resignation as a director, manager and sonographer of EMIS.

On 18 March 2023, the letter of 17 March 2023 from Madison Marcus to Dr Kyatt was emailed to him.

In cross-examination (T125), Dr Kyatt agreed that from the time that the New Lease was entered into by an interest concerned with Mr Ibrahim in July 2022 and throughout all of the negotiations in the background that led to the execution of the Deed of Settlement, EMIS continued to occupy the Engadine Premises, conduct the Engadine Practice in the same way and pay rent month-to-month, such that it was “business as usual” in the Engadine Practice. Dr Kyatt also agreed that in March 2023, about a month after Dr Kyatt took steps to remove Mr Chaudhry as a director, things came to a standstill at the Engadine Practice when employees left and the Engadine Practice stopped functioning (T125–126).

On 23 March 2023 at 4:13am, Mark McCudden, the Group Financial Controller of Vision Radiology, sent an email to Mr Ibrahim and Mr Chaudhry (amongst others) seeking their advice on the transfer of employees from the Engadine Practice to the Focus Engadine Practice.

On 23 March 2023 at 7:38am, Mr Ibrahim replied to Mr McCudden, copying in Ms Coles and Mr Chaudhry, saying:

On 23 March 2023, Mr Ibrahim wrote to Ms Bampton, a receptionist at the Engadine Practice, to offer her employment as a receptionist at Focus Radiology Engadine.

On 26 March 2023, five employees of EMIS at the Engadine Practice (Karen Davison, Jiawei Mei, Matthew Dyball, Taylah Bampton and Amy Marzol) each tendered their resignation via email to Mr Inayat.

On 26 March 2023, another employee of EMIS, Lindley Gomez, tendered her written resignation to Dr Kyatt.

Around this same time, EMIS employees (Karen Davison, Taylah Bampton, Matthew Dyball and Amy Marzol) accepted positions working for Focus Radiology Engadine.

On 27 March 2023, Ms Coles sent an email to Mr Chaudhry containing an announcement to doctors, practice managers and administration teams, introducing Focus Radiology Engadine as a new radiology clinic open in Engadine (at the Focus Engadine Premises) and attaching a list of services offered by the practice.

On or around 27 March 2023, after conducting some online searches, Dr Kyatt became aware that Mr Ibrahim was operating a new radiology practice (Focus Radiology Engadine) out of the Focus Engadine Premises (less than 100 metres from the Engadine Premises).

On 26 March 2023, Dr Kyatt telephoned an associate of his, Ameer Al-Khigani, from Jordan and offered to employ him as managing director of EMIS. Mr Al-Khigani accepted that offer and it was agreed that he would commence in the role on 28 March 2023. At this time, Dr Kyatt told Mr Al-Khigani that the Engadine Practice staff appeared to be working for a competing radiology practice in Engadine and instructed Mr Al-Khigani to attend the Engadine Premises and investigate.

On 29 March 2023, at Dr Kyatt’s instruction, Mr Al-Khigani attended first the Engadine Premises and then the Focus Engadine Premises in person, at which time he observed that the Engadine Practice appeared to be closed but Focus Engadine Radiology was open and operating.

On 30 March 2023, Mr Al-Khigani again visited both the Engadine Premises and the Focus Engadine Premises. On that occasion, Mr Al-Khigani approached and had a conversation with a man who was standing in front of the Engadine Premises distributing flyers, and who introduced himself to Mr Al-Khigani as Louis. Mr Al-Khigani said that in the course of that conversation:

The flyer was in fact a Focus Radiology-branded imaging request form which listed the Focus Engadine Premises under the sub-heading, ‘practice location’.

On 5 April 2023, the business name Focus Radiology Engadine was registered with ASIC, with the principal place of business the Focus Engadine Premises and the holder Engadine Medical Imaging.

On 6 April 2023, Mr Al-Khigani was appointed as a director and secretary of EMIS.

There are three claims against Mr Ibrahim:

I will deal with each in turn.

Mr Ibrahim was never a director of EMIS. His interest in EMIS was as a director of MI No. 2, which held 30 units in the Engadine Imaging Trust as trustee for the MI No. 2 Family Trust.

The plaintiffs claim that Mr Ibrahim was an officer of EMIS for the purposes of s 9AD(1)(b)(i), (ii) and (iii) of the Corporations Act which relevantly provide:

The relevant authorities on the application of these provisions of s 9AD were conveniently collected in Global Risk Alliance Group Services Pty Ltd v Harmer [2024] NSWSC 79 by Nixon J who said at [495]–[500]:

In the FASOC, the various subparagraphs of [17] plead that whilst Mr Ibrahim managed and controlled the Engadine Practice, his duties and responsibilities included:

In [18] of the FASOC, the plaintiffs plead that “[i]n the premises, [Mr Ibrahim] was an officer of EMIS within the meaning of section 9 of the [Corporations Act]”.

In [17] of Mr Ibrahim’s defence, he admits that he controlled and managed the Engadine Practice from about mid-2009 until about February 2018 and admits that his duties and responsibilities while controlling and managing the Engadine Practice included procuring medical equipment and supplies, analysing sales and profitability and accessing financial records and bank accounts of the Engadine Practice, but does not admit that he was responsible for running, managing and operating the Engadine Practice and otherwise denies the allegations in [17] of the FASOC. In [18] of Mr Ibrahim’s defence, he denies [18] of the FASOC.

In their respective closing submissions, the plaintiffs set out a catalogue of the contended facts which they assert provide the basis for a finding that Mr Ibrahim was an officer of EMIS and Mr Ibrahim provided his response to each of those contended facts. These contended facts, Mr Ibrahim’s responses to them and my findings are as follows:

In closing submissions, Mr Ibrahim referred to the pleaded allegations in [17] of the FASOC, submitting that none of them were made out other than asserting that Mr Ibrahim had access to the financial records used in the Engadine Practice. Mr Ibrahim said that he was entitled to obtain that information in his capacity as a director of MI No. 2 as trustee for the MI No. 2 Family Trust which was a unitholder in the Engadine Imaging Trust under cl 13.2 of the Engadine Trust Deed, and having such access could not bring him within the scope of the definition of officer in s 9AD of the Corporations Act.

I agree with this submission. Having access to financial documents of the Engadine Imaging Trust in his capacity as a director of one of the unit holders in that trust does not satisfy any of the disjunctive parts of the definition of officer in s 9AD of the Corporations Act.

I also agree with the closing submissions made by Mr Ibrahim that in the case made by the plaintiffs that Mr Ibrahim was an officer of EMIS they have simply failed to deal with the operation of the provisions of the Engadine Trust Deed that make the control and management of the Engadine Practice the responsibility of the majority unit holder, Advanced Imaging. This is particularly the case in relation to cl 17.5(a), which states that while ever Advanced Imaging is a unit holder, it has the right to nominate a representative who has total control of the day-to-day management of the business and make all decisions of a management, administrative and strategic nature in regard to the business of the Engadine Practice, without any money restrictions. There is no pleading to the effect that Advanced Imaging gave any authority to anyone to make decisions or so act in circumstances where it had “complete control” of the Engadine Practice.

Accordingly, I find that the allegation that Mr Ibrahim was an officer of EMIS at any relevant time is not established. As a result, it is not necessary for me to deal with the claim that Mr Ibrahim had breached any obligations owed to EMIS as an officer of EMIS and no relief can be obtained against Mr Ibrahim in relation to that claim.

Given my finding that the claim against Mr Ibrahim that he breached obligations as an officer of EMIS should fail, it is not strictly necessary for me to deal with the plaintiffs’ claim that he engaged in misleading or deceptive conduct which caused Dr Kyatt and EMIS to enter into the Deed of Settlement. That is because Mr Ibrahim does not need to rely on the releases in cl 5.2 of the Deed of Settlement in his defence of the claim that he was an officer of EMIS. In case I am wrong in my conclusion that Mr Ibrahim was not an officer of EMIS, I have dealt with the misleading or deceptive conduct claim against him below.

In essence, the plaintiffs plead in the FASOC at [31]–[33] that during the “Negotiation Period” from early July 2022 to 23 February 2023, Dr Kyatt, Mr Chaudhry and Mr Ibrahim entered into negotiations to have the New Lease assigned from Engadine Medical Imaging to EMIS, and that at this time Mr Ibrahim made each of the following representations:

The Competing Business is defined in [5.4] of the FASOC to be the radiology practice trading as Focus Radiology Engadine located at and trading from 1–3 Station Street, Engadine (which is defined in this judgment as the Focus Engadine Premises).

In the FASOC at [34]–[37], the plaintiffs plead that these seven representations were express, partly in writing and partly through conduct with:

Section 131(1) of the Competition and Consumer Act 2010 (Cth) (CCA) provides:

Schedule 2 to the CCA contains the Australian Consumer Law (ACL).

Section 18 of the ACL is within Chapter 2 of the ACL. Section 18(1) of the ACL provides:

Section 4 of the ACL concerns misleading representations with respect to future matters and provides:

In Lin v Zheng [2023] NSWCA 174, Payne JA (with whom Bell CJ and White JA agreed) at [31]–[36] helpfully summarised the principles for determining whether conduct is misleading or deceptive or likely to mislead or deceive, particularly in relation to representations of a future matter, stating:

The particular role of silence or non-disclosure in a claim for misleading or deceptive conduct has been considered at length in the authorities dating back to s 52 of the Trade Practices Act 1974 (Cth), the predecessor provision to s 18(1) of the ACL.

In Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Ltd (2010) 241 CLR 357; [2010] HCA 31, French CJ and Kiefel J at [16]–[23] outlined the following relevant principles in a case of silence as the basis for alleged misleading or deceptive conduct (footnotes omitted):

More than 20 years prior to the decision in Miller, in Lam v Ausintel Investments Australia Pty Ltd (1989) 97 FLR 458, Gleeson CJ (with whom Samuels AP and Meagher JA agreed) at 475 made the following important observations regarding silence in arms’ length negotiations:

As Bell P (as the Chief Justice then was, with whom Bathurst CJ and Payne JA agreed) said in Wormald v Maradaca Pty Ltd [2020] NSWCA 289 at [112], Lam remains an important authority in this context and has been regularly followed and applied.

In Wormald, Bell P at [111] summarised and reiterated the application of the principles from Miller and at [113]–[115] also collected a number of reinforcing principles relevant to a case of silence during negotiations, saying:

The entitlement to claim damages arising from a contravention of s 18 of the ACL is contained in s 236 which relevantly states:

A compensation order is also available to those persons who have suffered or are likely to suffer loss or damage because of conduct of another person in contravention of s 18 of the ACL, s 237 of the ACL relevantly stating:

The kinds of orders that may be made pursuant to s 237 of the ACL include those contained in s 243 of the ACL, such as a declaration that the whole or any part of a contract is void, an order varying a contract and an order refusing to enforce any or all of the provisions of a contract.

There must be a causal connection between the misleading or deceptive conduct and the loss or damage which is claimed in ss 236 and 237 of the ACL as both provisions require that the loss or damage be suffered “because of the conduct”. This language replaced the previous expression “by conduct of”. The causal connection is essentially a question of fact, to be determined by reference to common sense and experience and one into which policy considerations and value judgments necessarily enter: March v E & MH Stramare Pty Ltd (1991) 171 CLR 506; [1991] HCA 12, Mason CJ (with whom Toohey and Gaudron JJ agreed) at 515; Wardley Australia Ltd v Western Australia (1992) 175 CLR 514; [1992] HCA 55, Mason CJ, Dawson, Gaudron and McHugh JJ at 525.

In Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304; [2009] HCA 25, French CJ at [25]–[29] considered the question of characterisation of conduct which is directed at particular individuals, saying (footnotes omitted):

The issues of reliance and the effect of a contractual disclaimer in a claim of misleading or deceptive conduct were considered in Osborne v Iris Diversified Property Pty Limited [2014] NSWSC 1488, by Pembroke J, who said at [25]–[31]:

In my opinion, the plaintiffs’ claim that Mr Ibrahim engaged in misleading or deceptive conduct must fail for multiple reasons.

First, I am not satisfied that any of the alleged representations were made by Mr Ibrahim to Dr Kyatt during the Negotiation Period from early July 2022 to 23 February 2023. I have set out my consideration of each of them in turn below:

On the subject of Dr Kyatt’s reliance on the alleged conduct of Mr Ibrahim, I consider that Dr Kyatt had two further insurmountable obstacles in making that case.

First, Dr Kyatt gave evidence in cross-examination that the whole of his reliance in entering into the Deed of Settlement was placed on his lawyers. If that was indeed the case, it follows that Dr Kyatt did not rely on anything said to him by Mr Ibrahim or Mr Ibrahim’s lawyers.

Secondly, adopting the considerations raised in Osborne and the authorities referred to in it, in my opinion Dr Kyatt’s agreement to cl 13.2 of the Deed of Settlement (which states that “The Parties acknowledge that no reliance has been placed on any prior agreement, understanding or representation”) lends further support to the conclusion that Dr Kyatt did not rely on any alleged representation made by Mr Ibrahim. I consider that I should give effect to this solemn disclaimer of reliance in the present case.

I also wish to address in general terms the matters that Dr Kyatt alleges Mr Ibrahim failed to disclose to him or remained silent about during the negotiation of the Deed of Settlement. Applying the principles set out in Miller and Wormald, I consider that it was not misleading or deceptive for Mr Ibrahim to stay silent about the detail of the plans he had for establishing a new radiology practice in Engadine in competition with the Engadine Practice. As I have found, Mr Ibrahim was not a director or an officer of EMIS. He did not owe any fiduciary or other duties to Dr Kyatt. Mr Ibrahim and Dr Kyatt were in a competitive position of equal bargaining power and were equally well resourced and advised by their respective lawyers. The circumstances were not such as to give rise to any reasonable expectation that Mr Ibrahim would reveal the plans that he had to Dr Kyatt. Mr Ibrahim was free to act in his own best interests, as was Dr Kyatt. Dr Kyatt had demonstrated that he was not a stranger to acting in his own best interests by effectively abandoning the Engadine Practice in October 2019 to move with his family to Jordan and then refusing to do any remote work for the Engadine Practice, instead choosing to do work for IDXT (from October 2019) and I-MED (from April 2021) for which he evidently was paid more money.

As a result, I do not consider that any silence by Mr Ibrahim concerning his involvement in the establishment of Focus Radiology Engadine was actionable by the plaintiffs as an instance of misleading or deceptive conduct.

I reject the claims of misleading or deceptive conduct against Mr Ibrahim, and I will not make any order for relief — including an order refusing to enforce any part of the Deed of Settlement — in favour of the plaintiffs under ss 236, 237 or 243 of the ACL. This means that the Deed of Settlement applies in accordance with its terms, including the release of Mr Ibrahim in cl 5.2, which amongst other things released Mr Ibrahim from any claims or loss in connection with any allegation that Mr Ibrahim was an officer of EMIS.

The plaintiffs allege in the FASOC at [19] that during the course of Mr Ibrahim managing and controlling the Engadine Practice and/or EMIS, he had access to confidential information including:

Collectively these categories of information are defined in [19] of the FASOC as the “Confidential Information”, which it is alleged in [20] of the FASOC was imparted to Mr Ibrahim in circumstances where he was aware that it had the nature of confidentiality.

The plaintiffs then plead in [21.1] of the FASOC that Mr Ibrahim owed a duty not to misuse the Confidential Information of EMIS and he had a duty in equity to that effect (which is defined as the “Duty of Confidentiality”). The conduct of Mr Ibrahim alleged in [25] of the FASOC to be in breach of the Duty of Confidentiality is that in the period commencing early 2019 and continuing, Mr Ibrahim without the knowledge, consent or authorisation of Dr Kyatt and/or EMIS:

Setting aside the alleged breaches in (1), (2) and (4) above which are not pleaded as having any connection to the use of Confidential Information, the particulars on which the plaintiffs rely to establish the breaches in (3) and (5) are those contained in [26.10] and [26.12] of the FASOC:

Aside from Mr Ibrahim’s admissions that Engadine Medical Imaging entered into the New Lease and that Mr Ibrahim established the Competing Business, the allegations forming the breach of confidential information claim are either denied or not admitted by Mr Ibrahim ([19]–[26] of Mr Ibrahim’s defence).

The written closing submissions of the plaintiffs with respect to this claim are faintly put. Apart from simply recording the pleading they say:

No oral closing submissions were made by the plaintiffs on this claim.

In my opinion, the claim for breach of confidential information is fatally flawed for numerous reasons.

First, the alleged Duty of Confidentiality is not pleaded to be owed by Mr Ibrahim to any particular person. The equitable duty of confidence is not owed at large; rather, it is owed to certain persons having imparted information in circumstances importing an obligation of confidence: Megarry J in Coco v AN Clark (Engineers) Ltd [1969] RPC 41 at 47.

Secondly, the plaintiffs have failed to identify what precise information Mr Ibrahim is said to have (mis)used, having only done so in global terms. The need for the specific identification of the alleged confidential information in an action for breach of confidentiality has been repeatedly emphasised by the courts. In Streetscape Projects (Australia) Pty Ltd v City of Sydney (2013)85 NSWLR 196; [2013] NSWCA 2, Barrett JA (with whom Meagher and Ward JJA agreed) at [159] said:

Thirdly, no consideration has been given in the claim to the fact that on 12 March 2020, Mr Ibrahim was given access to the financial information of EMIS in accordance with the right contained in cl 13.2 of the Engadine Trust Deed which provides that unit holders may inspect the financial statements and books of account in relation to the Engadine Imaging Trust.

Finally, the plaintiffs have failed to demonstrate how Mr Ibrahim is said to have used the Confidential Information and how such a use has caused loss to the plaintiffs or gain to Mr Ibrahim.

For these reasons, I reject the claim for breach of confidentiality by Mr Ibrahim.

In the FASOC at [29], the plaintiffs plead that Mr Chaudhry has acted in breach of the duties in ss 180, 181, 182 and 183 of the Corporations Act and the following fiduciary duties:

The plaintiffs plead in [29] of the FASOC that these breaches occurred in the period commencing early 2019 to date and involved Mr Chaudhry, without the knowledge, consent or authorisation of Dr Kyatt and/or EMIS, doing each of the following:

In each case, there is no specificity in the FASOC as to which particular duty Mr Chaudhry is alleged to have breached by the relevant conduct.

In [30] of the FASOC, the plaintiffs provide a series of particulars to each of the allegations in [29]. In relation to the allegations in [29.3], [29.6], [29.7] and [29.9] the particulars that are provided at [30.3], [30.6], [30.7] and [30.9] respectively are the affidavit of Dr Kyatt sworn 24 April 2023, in two instances ([30.6] and [30.7]) in addition the affidavit of Ameer Al-Khigani affirmed 24 April 2023, and in each case “[f]urther particulars may be provided after the processes of discovery, subpoenas, notices to produce and the exchange of witness evidence”.

The FASOC at [30.4] provides particulars to the allegations at [29.4], which concerns the inducing or attempted inducing of employees or contractors of EMIS. The particulars name each of those employees or contractors as Taylah Bampton, Jiawei Kevin Mei, Karen Davison, Amy Marzol and Matthew Dyball and then refers to the affidavit of Dr Kyatt sworn 24 April 2023, once again noting “[f]urther particulars may be provided after the processes of discovery, subpoenas, notices to produce and the exchange of witness evidence”.

The FASOC at [30.8] provides particulars to the allegations at [29.8] in relation to the establishment of the Competing Business and the use of Confidential Information. Those particulars are:

The plaintiffs’ closing submissions were severally lacking in detail in explaining how each of the alleged breaches of duties were established. There was certainly no attempt made to tie particular allegations to particular breaches of duty as one might expect in a case of this sort.

The allegations in [29] and [30] of the FASOC are denied in [23] of Mr Chaudhry’s defence.

Sections 180, 181, 182 and 183 of the Corporations Act provide:

In Re Colorado Products Pty Ltd (in prov liq) [2014] NSWSC 789, Black J at [408]–[409] set out the applicable principles for an alleged contravention of s 180 of the Corporations Act as follows:

In Mudgee Dolomite & Lime Pty Ltd v Robert Francis Murdoch; In the matter of Mudgee Dolomite & Lime Pty Ltd [2020] NSWSC 1510, Black J at [100] added the following observation about the operation of s 180 of the Corporations Act:

In Colorado, Black J at [419]–[421] also conveniently summarised the principles relevant to an alleged contravention of ss 181 of the Corporations Act as follows:

In Colorado, Black J at [432]–[433] went on to summarise the principles relevant to the alleged contravention of ss 182 of the Corporations Act in the following way:

In Colorado, Black at [443] said this about the principles relevant to an alleged contravention of s 183 of the Corporations Act:

The principles relevant to the fiduciary duties owed by a director of a company were also drawn together in Colorado, Black J at [351]–[357] stating:

Mr Chaudhry was a director of EMIS at all relevant times from 26 September 2019 until 22 February 2023 when he was removed by Dr Kyatt. As a result, in that period he owed the duties contained in ss 180, 181, 182 and 183 of the Corporations Act as well as fiduciary duties to EMIS. In relation to the allegations put by the plaintiffs, in closing submissions the plaintiffs identified the duties contained in ss 181 and 182 of the Corporations Act as central to their case.

The essence of the allegations made by the plaintiffs against Mr Chaudhry is that he conspired with Mr Ibrahim to the exclusion of Dr Kyatt to deprive EMIS of its lease of the Engadine Premises, established Focus Radiology and set in train Focus Radiology Engadine.

As I have found, in May 2022 the rebranding process of the Engadine Practice as part of the rebranding of the Woonona Practice, the Warrawong Practice, the Warilla Practice and the Dapto Practice to Focus Radiology was embarked upon by Mr Chaudhry, unbeknownst to Dr Kyatt, and substantially with the assistance of Ms Coles. Further, I have inferred that while the rebranding process was continuing in July 2022, Mr Chaudhry knew that Mr Ibrahim was undertaking the step of obtaining the New Lease in the name of Engadine Medical Imaging because the rebranding process to Focus Radiology was being coordinated by Mr Chaudhry and included the Engadine Practice located at the Engadine Premises.

By inference, I have found that the rebranding to Focus Radiology was discussed and agreed by Mr Ibrahim and Mr Chaudhry prior to 11 August 2022 and that Mr Ibrahim took active steps to take the business of EMIS and to set up the competing business on and from July 2022 to the knowledge of Mr Chaudhry.

From July 2022 onwards, Dr Kyatt worked to recover the lease of the Engadine Premises for EMIS, entering into drawn-out negotiations with Mr Ibrahim through their respective lawyers, ultimately resulting in the Deed of Settlement between them. This resulted in the rebranding process for the Engadine Premises to Focus Radiology coming to a halt in some respects from August 2022 until around November 2022 when it was revived. This is evidenced by the email on 15 August 2022 from Ms Coles sent to Focus staff, copied to Mr Chaudhry, with the subject line ‘Referrals / Film Bags / Appointment Cards’, informing them that new referrals, film bags and appointment cards were going to be delivered to the clinics in the coming week but warning that their use at the Engadine Premises should be held off and that they should “continue to use the [EMIS] stuff until further notice”.

There is no evidence that Mr Chaudhry had any involvement:

In relation to the allegation that Mr Chaudhry failed to exercise the option under the Lease on behalf of EMIS and permitted the Lease to expire in order for Engadine Medical Imaging to then obtain the New Lease to the exclusion of EMIS, or alternatively assisted Mr Ibrahim to do this, there is evidence that Mr Chaudhry did act to renew the Lease. Firstly, Mr Chaudhry sent an email on 18 August 2021 to All Star Property Group expressing a desire to renew the Lease. Secondly, he sent an email on 25 November 2021 to Mr Inayat asking him if he had sent an email to renew the Lease, following which, on Mr Chaudhry’s instructions, Mr Inayat emailed All Star Property Group expressing a desire to renew the Lease. Thirdly, I have inferred that at that time, Mr Chaudhry would have believed that the Lease would be renewed, having requested Mr Inayat to inform the agent of that request and having seen that Mr Inayat had done as he instructed. As I have said above, there is no evidence that Mr Chaudhry was involved in the steps taken in July 2022 by Mr Ibrahim to obtain the New Lease of the Engadine Premises in the name of Engadine Medical Imaging. In my opinion, the plaintiffs have failed to demonstrate that Mr Chaudhry breached his duties owed to EMIS as a director of EMIS in relation to the failure to renew the Lease and the granting of the New Lease to Engadine Medical Imaging.

In relation to the allegation that Mr Chaudhry induced or attempted to induce employees or contractors of EMIS, presumably to leave EMIS and join Engadine Medical Imaging, or assisted Mr Ibrahim to do this, the only evidence of steps being taken to have employees of EMIS leave and join Engadine Medical Imaging involving Mr Chaudhry is in March 2023, by which time Mr Chaudhry was no longer a director of EMIS and did not owe any duties to EMIS. Once Mr Chaudhry was removed as a director of EMIS on 22 February 2023, he no longer owed any duties to EMIS. Accordingly, any involvement Mr Chaudhry had in the staff at the Engadine Practice resigning and accepting offers of employment at Focus Radiology Engadine is not something which is actionable by EMIS.

In relation to the allegation that Mr Chaudhry retained and used for the benefit of himself and others and other than for the benefit of EMIS, the Confidential Information, or alternatively assisted Mr Ibrahim to do this, this allegation essentially fails for the same reasons as I have stated above for the failure of the confidential information claim against Mr Ibrahim, being the failure to identify what precise information Mr Chaudhry is said to have used the failure to demonstrate how Mr Chaudhry is said to have used the Confidential Information, and how such a use has caused loss to the plaintiffs or gain to Mr Chaudhry.

In relation to the allegation that Mr Chaudhry canvassed, solicited and accepted approaches from customers of the Engadine Practice, or alternatively assisted Mr Ibrahim to do this, there is simply no evidence to support this allegation.

In relation to the allegation that Mr Chaudhry established the Competing Business and used the Confidential Information and property for its benefit to the exclusion of EMIS and other than for the benefit of EMIS, or alternatively assisted Mr Ibrahim to do this, there is no evidence that Mr Chaudhry had any involvement in establishing the Focus Engadine Practice which was established by Mr Ibrahim as the sole director, secretary and shareholder of Engadine Medical Imaging. Further, the allegation about the Confidential Information essentially fails for the same reasons as I have stated above for the alleged breach arising from use of the Confidential Information.

In relation to the allegation that Mr Chaudhry refused and/or neglected to sign documents to enable the New Lease to be assigned from Engadine Medical Imaging to EMIS, there is no evidence that he did so. Dr Kyatt admitted that he did not ask Mr Chaudhry to do so and Mr Inayat was not called as a witness to say that he had asked Mr Chaudhry to do so. The Deed of Assignment was signed on 23 February 2023 on behalf of EMIS by Dr Kyatt. Mr Chaudhry had been removed as a director of EMIS the day before.

In my opinion, all of the pleaded allegations against Mr Chaudhry to the effect that he breached his statutory and fiduciary duties as a director of EMIS fail.

In light of the findings that I have made that none of the claims against Mr Ibrahim and Mr Chaudhry have been established it is not strictly necessary for me to make any findings about any relief that I might have granted to the plaintiffs if I had upheld one or more of their claims.

I do, however, want to make these comments about the way the case in relation to monetary relief was made, noting that the trial was held to deal with all issues of liability and relief.

I was not provided with any expert evidence on behalf of the plaintiffs to assist me in establishing the alleged value of EMIS but instead was asked to infer it from:

I consider that this would be a highly unsatisfactory way in which to proceed to grant monetary relief in this case. Informing me that on 12 February 2018, Dr Kyatt paid $319,218.91 to Mr Ibrahim to acquire a 51% controlling interest in the Engadine Practice on behalf of Advanced Imaging tells me nothing about the value of those units in the Engadine Imaging Trust in 2024. Further, giving me profit and loss figures for EMIS in 2019, 2020, 2021 and 2022 does not provide me with any reliable indicator of what those units would be worth in 2024.

I agree with the closing submissions of Mr Ibrahim and Mr Chaudhry. The plaintiffs did not demonstrate by admissible evidence any loss which could support the claims against Mr Ibrahim and Mr Chaudhry.

For the reasons set out above, the plaintiffs have failed in their claims against Mr Ibrahim and Mr Chaudhry. They have also abandoned their claims against Engadine Medical Imaging, Focus Radiology Dapto, Focus Radiology Warrawong, Dapto Imaging and Warrawong Imaging. Accordingly, I propose to make the following orders: