DISTRICT COURT OF QUEENSLAND
CITATION:
Sanlorenzo Australia Pty Ltd v Ali [2017] QDC 93
PARTIES:
SANLORENZO AUSTRALIA PTY LTD (ACN 602 273 478)
(plaintiff)v
MARK ALLEN ALI
(defendant)FILE NO/S:
283/16
DIVISION:
Civil
PROCEEDING:
Trial
DELIVERED ON:
5 May 2017
DELIVERED AT:
Brisbane
HEARING DATE:
30 March 2017 and 7 April 2017
JUDGE:
Farr SC DCJ
ORDER:
The plaintiff’s claim is upheld.
CATCHWORDS:
CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – OTHER MATTERS – where the defendant was a director of the plaintiff – where the plaintiff was incorporated to act as an exclusive brand distributor for the sale of luxury yachts – whether the sale of a luxury yacht brokered by the defendant was on his own behalf or on behalf of the plaintiff – whether defendant was entitled to retain commission paid – where there was email correspondence between the parties in relation to the sale.
COUNSEL:
S J Forrest for the plaintiff
S D Anderson for the defendant
SOLICITORS:
MinterEllison Solicitors for the plaintiff
JHK Legal for the defendant
Introduction
This matter concerns a dispute over who was entitled to the receipt of a commission paid in respect of the sale of a luxury yacht.
The plaintiff, Sanlorenzo Australia Pty Ltd, is a proprietary limited company incorporated on 10 October 2014. It carries on business as a yacht broker. The defendant was one of the directors of the plaintiff at all relevant times.
On 1 November 2016 the commission was deposited into a bank account in the name of the defendant by the vendor of the yacht, Sanlorenzo S.p.A, an Italian luxury boat manufacturer. The plaintiff alleges that the commission belongs to the plaintiff. I note that on 15 November 2016 an order was made by Rackemann DCJ, by consent, restraining the defendant from dealing with the commission pending further order of this court.
Upon incorporation the plaintiff had the following directors:
(a) Tony Ross;
(b) Paul Taylor; and
(c) the defendant, Mark Ali.
The defendant and Mr Ross each hold 40 per cent of the shares in the plaintiff, whilst Mr Taylor holds a 20 per cent shareholding.[1]
[1]Affidavit of Paul Taylor failed 15 November 2016 Exhibit PT-01 at pp 7-8 of Exhibit 5.
The plaintiff pleads that it was incorporated specifically to act as the exclusive brand distributer in Australia for Sanlorenzo S.p.A[2] The defendant does not admit that it was incorporated for that purpose.[3] Whether that is an issue of relevance remains to be seen.
[2]Statement of Claim para 7.
[3]Defence para 7.
In contemplation of, but prior to the incorporation of the plaintiff, a written distribution agreement was signed on 18 September 2014 naming Sanlorenzo S.p.A and the plaintiff as the parties.[4]
[4]See Exhibit “PT-02”, p 5 to Affidavit of Paul Taylor filed on 15/11/16; pp 10-27 of Exhibit 5.
The signature page of the written agreement reads:
“As an evidence of this, the Parties have entered into this agreement in Viareggio on 18-09-2014 under signed in two originals.”
There are two signatures:
(a) Marco Vitti, Vice President of Sanlorenzo S.p.a; and
(b) the defendant.
The plaintiff pleads that the written agreement was signed in contemplation of the incorporation of the plaintiff.[5] The defendant admits that it was executed “in contemplation of the incorporation of the plaintiff” but says he “signed it in his own name and not as a representative of the plaintiff,”[6] even though he is not a named party. I note however, that in cross-examination the defendant conceded that he signed that agreement on behalf of the plaintiff rather than on his own behalf.[7]
[5]Statement of claim para 5.
[6]Defence para 5.
[7]Transcript pp 2-9 ll 36-38.
The plaintiff pleads that the contract was adopted by the parties upon the incorporation of the plaintiff.[8] This is denied by the defendant.[9]
[8]Statement of Claim para 8.
[9]Defence para 8.
The dispute is in relation to an amount of €250,000 that was paid in commission by Sanlorenzo S.p.A in relation to the sale of a Sanlorenzo vessel (‘SL106’) by Sanlorenzo S.p.A to a Mr Shang Jin Lin.
It is not in dispute that:
(a) the vessel was sold by Sanlorenzo S.p.A to Mr Shang Jin Lin;
(b) the vessel was second-hand; that is, it had been acquired by Sanlorenzo S.p.A from a previous customer pursuant to a trade-in before it was sold to Mr Lin;
(c) Sanlorenzo S.p.A paid a commission in the amount of €250,000 in relation to the sale of the vessel to Mr Lin.
The plaintiff pleads that the sale was negotiated by the plaintiff,[10] and that the plaintiff was entitled to the payment of the commission pursuant to cl 3.1 of the written agreement.[11]
[10]Statement of Claim para 10.
[11]Statement of Claim para 12.
Alternatively, the plaintiff pleads that there was a separate agreement (that is, separate from the written agreement) between the plaintiff and Sanlorenzo S.p.A for the payment by Sanlorenzo S.p.A of the commission in relation to the sale of SL106.[12]
[12]Statement of Claim para 14.
Those allegations are denied by the defendant. He pleads that:
(a) “the plaintiff played no role in negotiating the sale of the vessel” which the defendant claimed was negotiated “by the defendant”[13];
[13]Defence para 10.
(b) “if the plaintiff became entitled to a commission from the sale of a Sanlorenzo S.p.A vessel in Australia (which is denied) it would not have become entitled to a commission on the sale of a second-hand vessel” because the contract only applied in respect to the sale of new vessels[14]; and
(c) no agreement was reached between Sanlorenzo S.p.A and the plaintiff “on a commission payable.”
[14]Defence para 12.
On 21 October 2016 the defendant sent an invoice in the name of “Mark Allen Ali as Trustee for the Cotton 15 Trust” to Sanlorenzo S.p.A in relation to the commission.[15]
[15]Affidavit of Mark Taylor filed 15 November 2016 Exhibit PT-07; pp 46 and 47 of Exhibit 5.
On 25 October 2016 the defendant sent an email to Mr M Perotti, Chairman of Sanlorenzo S.p.A[16] It is stated:
“…the shareholding of the Sanlorenzo Australia Company and its control by my entity Mark Allen Ali ATF the Cotton 15 Trust is still to be untangled as the two other shareholders who have given nothing to this enterprise debate weather (sic) they will pursue a litigious route.
In the meantime I would ask that you consider and respond to the following:
(1)That the Dealer representation of Sanlorenzo in Australia be transferred to my entity until such time as Sanlorenzo Australia Pty Ltd is secured 100 per cent.
(2)That the proceeds of the sale of SL 106/610 be paid to my entity (As invoiced to Carlo Ciriani last week).
[16]Affidavit of Paul Taylor filed 15/11/16, PT-08; pp 48 and 49 of Exhibit 5.
….”
On 27 October 2016 Carlo Ciriani, Sales Manager of Sanlorenzo S.p.A, sent an email to the defendant.[17] It stated:
“can you kindly send us a declaration stating that the Ensign Broker has never been involved in the deal and should this company claim any commission this will be at your charge through the new company Mark Allen Ali as Trustee for the Cotton 15 Trust.”
[17]Email of Paul Taylor filed 15 November 2016 at PT-08; p 50 of Exhibit 5.
On 27 October 2016, the defendant sent a declaration to Sanlorenzo S.p.A[18] It stated:
“Declare that the sale of Sanlorenzo SL106 build number 601 to Aqualand Pty Ltd was sold by Mark Allen Ali individually and that this sale was entered into without the input or consequence or representation of any other third party or company, specifically Ensign Brokers or its counterparts or associated entities.
The agreed commission payable of €250,000 to Mark Allen Ali as Trustee for the Cotton 15 Trust will be redistributed to any parties that have verified their involvement on a commercial basis and this distribution will be transferred outside of any direct commission paid by Sanlorenzo S.p.A who will not be responsible or held responsible for any distribution that may occur as a result of the commission paid to the selling entity now or in the future.”
The defendant signed this declaration as Trustee for the Cotton 15 Trust.
[18]Affidavit of Paul Taylor filed 15.11.16 at pt-09; p 51 of Exhibit 5.
On or about 1 November 2016, Sanlorenzo S.p.A deposited the commission into the defendant’s bank account.
The plaintiff pleads that the defendant’s conduct constitutes breaches of his fiduciary and statutory duties to the plaintiff.[19]
[19]Statement of Claim para 26.
The plaintiff has pleaded its case in the alternative:
(a) that the sale of the vessel was negotiated or brokered by the defendant whilst acting in his capacity as a director of the plaintiff and on behalf of the plaintiff;
(b) the defendant acquired for himself property which pursuant to the agreement, or alternatively, in equity, belonged to the plaintiff; and
(c) that the defendant is liable to account to the plaintiff for a benefit obtained in circumstances where by reason of his fiduciary positon or by reason of him taking advantage of an opportunity or knowledge which was derived in consequence of occupation of his fiduciary position.
The plaintiff submits that any profit or benefit obtained by a fiduciary in either of the two situations in paragraph 22(b) and (c) above, is held by a fiduciary as a constructive trustee. It is further submitted that if the benefit was obtained pursuant to the situation described in paragraph 22(a) above, then the benefit belongs to the plaintiff.
The defendant denies that he negotiated or brokered the deal whilst acting in his capacity as a director of the plaintiff and on behalf of the plaintiff. He also denies breaching any fiduciary or statutory duty to the plaintiff and pleads:[20]
[20]Defence para 26.
(a) that he “was the promoter who negotiated the contract without the input of the plaintiff”;
(b) that “the contract did not apply to second-hand vessels of Sanlorenzo S.p.A”;
(c) that the sale of the vessel “was not an opportunity which arose for the plaintiff, but it was an opportunity which arose for the defendant in his own personal capacity”;
(d) in the alternative, that “the contract was never adopted by the plaintiff and therefore the defendant remained the person who was entitled to benefit and was responsible for the obligations of the contract”.
Issues for determination
The key issues for the determination by the court are therefore the following:
(a) Was the contract with Sanlorenzo S.p.A signed by the defendant on behalf of the plaintiff or on his own behalf?
(b) Was the contract adopted by the parties upon the incorporation of the plaintiff?
(c) Did the contract apply in respect of second-hand vessels, or only in respect of new vessels?
(d) Alternatively, was there a separate agreement between the plaintiff and Sanlorenzo S.p.A covering the sale of SL106?
(e) Was the sale of SL106 negotiated by the defendant on behalf of the defendant or on his own behalf?
(f) Was the commission on the sale of SL106 payable:
(i) to the plaintiff (either pursuant to the contract or pursuant to a separate agreement between the plaintiff and Sanlorenzo S.p.A)?; or
(ii) to the defendant?
(g) If it was payable to the defendant, was the defendant’s entitlement to that commission nevertheless:
(i) an opportunity which, in equity, belonged to the plaintiff?; or alternatively
(ii) a benefit that he obtained by reason of his fiduciary position or by reason of him taking advantage of an opportunity or knowledge which was derived in consequence of occupation of his fiduciary position?
In my view, the first issue which requires determination is that listed in paragraph 25(e) to (f) above – i.e. was the sale of SL106 negotiated by the defendant on behalf of the plaintiff or on his own behalf and was the commission on its sale payable to the plaintiff pursuant to a separate agreement between the plaintiff and Sanlorenzo S.p.A or payable to the defendant?
If the sale of SL106 was negotiated or brokered by the defendant acting in his capacity as the director of the plaintiff and on behalf of the plaintiff, then the plaintiff would be successful in this matter as the commission would belong to the plaintiff. Issues of fiduciary or statutory duties and contract interpretation only become potentially relevant if the commission was payable to the defendant.
The evidence
The plaintiff had two witnesses, Mr Ross and Mr Taylor. Mr Taylor has sworn two affidavits and Mr Ross has sworn one. The defendant has also sworn an affidavit which was filed on 15 November 2016.
In his first affidavit, Mr Taylor gave the following evidence:
(a) the plaintiff was incorporated for the purpose of selling boats in Australia for Sanlorenzo S.p.A;[21]
[21]Affidavit of Paul Taylor at para 6.
(b) upon incorporation of the plaintiff, the contract with Sanlorenzo S.p.A was adopted by the plaintiff and the plaintiff worked closely with Sanlorenzo S.p.A to achieve sales and marketing targets;[22]
[22]Affidavit of Paul Taylor filed 15 November 2016 at para 7.
(c) the plaintiff negotiated the sale of SL106, acting through the defendant who was in regular contact with Sanlorenzo S.p.A and the buyers’ representatives;[23]
(d) the defendant kept Mr Ross and Mr Taylor “up to date” with the negotiations.[24]
[23]Affidavit of Paul Taylor filed 15 November 2016 at para 14.
[24]Affidavit of Paul Taylor filed 15 November 2016 at para 15.
Mr Taylor exhibited to his first affidavit copies of various emails which passed between he, Mr Ross and the defendant between 30 September and 7 October 2016 in relation to the potential sale of SL106. To fully understand the relevance of those emails they need to be repeated in this decision:
(a) In an email dated 30 September 2016 sent by the defendant from his “sanlorenzoaustralia.com” email address he wrote:
“I have been negotiating this offer for some days and reached agreement with Mr Perrotti finally at 7.30am this morning, unfortunately with only 30 minutes left to try to get Mr Lins’ executed document returned and banks in Australia about to close he has left the country and as you see below we have nothing other than this declaration.
I have instructed legal counsel to seek permission from the buyer to have the deposit sent from Shanghai on Monday morning which would give us a 4 hour head start on Turkish banks opening and allowing the next buyer to have his deposit transferred. It has been nail-biting again after loosing [sic] last weeks [sic] deal, The commission will be crap as the Turkish offer is some euro 150k better and the selling dealer is the dealer taking this as part exchange. Both Perrotti and now Murat will honour my deal if contract is executed and depositer copy is received prior.
Please be very clear that I have been instructed this negotiation is confidential and any breach of trust will preclude any dealing now or in the future – that is why you know nothing of it, no other reason.
Transport from Turkey on 26th October is already booked, the contract really becomes unconditional immediately as Sanlorenzo undertake as part of this agreement to rectify any and every fault found by RINA survey, as well they service engines and gensets etc.
As you can imagine I have had little sleep these last nights going back and forwards so please understand I will just ring the bell if we are successful.
If we miss this sale the buyer is hell-bent on having “A BOAT” in Sydney by xmas, so I am pursuing others as well to try to keep him in my loop bit [sic] there are no guarantees.
Mark Ali
CEO Sanlorenzo Australia
” [emphasis added]
(b) In an email dated 4 October 2016 sent by the defendant in reply to an email from Mr Ross asking “how did our buyer go??” [emphasis added], he wrote:
“I arrived home today, have been asleep
4 lots of contract back and forth at 6.7m now agreed but client only sent 50k euro so far. Balance of 20% in next 49 hours to be sent before Sanlorenzo will countersigned [sic], it’s been nonstop
We are nearly there
Shipp [sic] booked at inspection by captain 11th with final settlement seven days later. Nothing more I can do at the moment except keep peddling.
I will be going back next week
Mark Ali” [emphasis added]
(c) In an email dated 6 October 2016 sent by the defendant from his “sanlorenzoaustralia.com” email address, he wrote:
“I have nearly lost this sale twice during the past three days as communication and pressure by Sanlorenzo for the buyer to perform has been extraordinary. The buyers have had a change of Lawyers from Clyde & Co who realised halfway through this that they also represent Sanlorenzo and had to bow out. The new Lawyers are MinterEllison Sydney and overnight the final deed is with MinterEllison London.
So: provided these lawyers do not again substantially change the intent of the deed the sea trials and due diligence will commence the morning of the 12th and unconditional contract by 15th. Settlement will be on or before the 19th
We will have to invoice on the 15th but probably will not get paid til end of month
Commission has been fully agreed after I have fought with all stakeholders in the trade all week. Total commission will be Euro 250k however we will have to pay euro 50k directly to Mr Jeffrey Zhang, the chinese [sic] introducer – Net 200k euro
All these documents and deposit balances will have to be in Sanlorenzo’s hands by tomorrow morning Italy time and they will then execute and proceed. The Captain and Mr Zhang have already booked to arrive Istanbul on the 11th. The Sales director and his Captain along with the Turkish dealer will also attend to ensure that I have a smooth transition to unconditional
I have not been very well for some weeks and have been organising doctors and eye specialists this week for immediately my return from Turkey
I will be in tomorrow by lunch
Mark Ali
CEO Sanlorenzo Australia” [emphasis added]
On 7 October 2016, the day after the defendant sent the email referred to in paragraph 30(c) above, he sent a further email to Mr Ross. That email contains a numbered list of grievances that the defendant apparently felt in relation to his involvement with the plaintiff generally and Mr Ross specifically. They mostly relate to complaints of lack of support for the plaintiff’s business.
After the list of complaints, the defendant continued that email with the following:
“As of Today these deals are still very much in play
(A) SL106 to Sydney client Aqualand – Mr Jin – DEADLINE today to perform
…
If the deal on the SL106 comes off I am suggesting that you take your $40k investment in SL Australia out first from this income and apply whatever portion is appropriate to pay back some of Paul’s debt from his share of this sale – I calculate that I should at worst receive $120k plus GST but let’s see how your numbers work for you.I want you to relinquish your 40% share of Sanlorenzo Australia completely as I cannot work under this system
The Dealer agreement with the Shipyard runs out in December and it will only be renewed if any office is open and a new boat is sold. I know that others are circulating on the brand for Australia but I will take the punt on my own.
I am doing this for many reasons but ALL are for once selfish, I will not help, carry, train or give of myself anymore. I have not been well for nearly 2 years and I am not going to waste my time and expertise for another day.
If Paul or any other brings a SL client it will of course be a conjunction with Ensign” [emphasis added]
When cross-examined about these emails:
(a) In relation to the email on 30 September 2016 to Mr Taylor, the defendant said he “wasn’t reporting to Paul; rather, being communitive”, but he denied communicating because it was the plaintiff’s business. [25] He conceded however that the pronoun “we” in that email was a reference to Sanlorenzo Australia Pty Ltd.[26]
[25]Transcript p 2-15, ll 40-44; p 2-16, L 14; p 2-16; ll 35-40.
[26]Transcript p 2-17, L 1.
(b) In relation to the email dated 4 October 2016, the defendant agreed that it was an email he sent to Tony Ross. He denied that the pronoun “we” meant Sanlorenzo Australia Pty Ltd.[27]
[27]Page 2-17, L 19.
(c) In relation to the email dated 6 October 2016, the defendant agreed that it was an email he sent to Tony Ross and Paul Taylor and that it related to the vessel SL106. He agreed that he was updating them with this email but not because it was Sanlorenzo Australia Pty Ltd business. When asked why he was updating them he replied:
“To answer your question sir, I have been very aware that Mr Taylor and Mr Ross had been working in concert against me for some time, and that this particular deal had no – there was nothing in relation to Sanlorenzo Australia business and I knew it. I was testing the waters to see what was going to happen with these people. I was very aware of what was going on behind my back.”[28]
[28]Transcript p 2-17, ll 36-41.
On this occasion when it was suggested to the defendant that “we” meant Sanlorenzo Australia Pty Ltd, he was evasive until he ultimately conceded that it did,[29] although he qualified that shortly thereafter by stating that he was “still testing them”.
[29]Page 2-18, ll 3-15.
Finally, when it was put to him that the sentence “we will have to pay euro 50k directly to Mr Jeffrey Zhang, the chinese introducer – Net 200k euro” meant that Sanlorenzo Australia Pty Ltd would have to pay that money he said “I’ll answer yes, within the context of that email, sir”.[30]
[30]Transcript p 2-18, L 39.
(d) In relation to the email of 7 October 2016, the defendant listed his grievances against Mr Ross yet still updated him regarding potential deals, including the situation relating to SL106. When it was suggested to the defendant that he proposed that Mr Ross take his seed money of $40,000 out of the commission from the sale of that vessel, the defendant replied:
“Sorry sir, as I eluded to prior to that particular contact there, I was trying to establish Mr Ross’ intent.”[31]
The defendant also maintained in evidence that Mr Taylor was not entitled to a share of the commission income despite writing “…and apply whatever proposition is appropriate to pay back some of Paul’s debt from his share of this sale”.[32]
[31]Transcript p 2-20, L 17.
[32]Transcript p 2-20, ll 39-47.
In addition to the above there is another telling piece of evidence before the court. In paragraph 30 of his affidavit filed 15 November 2016 the defendant refers to a contract with Mr Zhang for the payment of €50,000 as a spotters or introducers fee arising upon the sale of SL106. A copy of that agreement is exhibited at MA3.[33]
[33]Page 77 of Exhibit 5.
That agreement, dated 9 November 2016, is not signed by Mr Zhang. The defendant said that he had a problem with Docusign that day.[34] Yet, an almost identical agreement, which is signed by Mr Zhang and dated 4 November 2016 is also before the court.[35] Apart from the absence of Mr Zhang’s signature on the second document, the only differences between the two agreements relate to the removal of any reference to Sanlorenzo Australia Pty Ltd in the second agreement and an amendment whereby the second agreement was said to be signed by the defendant as “Mark Ali in his personal capacity and as trustee of the Cotton 15 Trust” whereas in the earlier agreement it was signed by him as “Mark Ali in his personal capacity and for and on behalf of Sanlorenzo Australia”.[36]
Whilst the defendant accepted that he was notified on 4 November 2016 that Sanlorenzo Australia Pty Ltd intended to commence this proceeding against him, he denied that he prepared the second version of the agreement because he realised that the original version of it contradicted his claim that he did not negotiate the deal on behalf of Sanlorenzo Australia Pty Ltd.
[34]Transcript p 2-22, L 11.
[35]Page 118 of Exhibit 5.
[36]Transcript p 2-22, ll 25-36.
Determination
That an agreement existed such that Sanlorenzo S.p.A would pay a €250,000 commission upon the successful sale of SL106 is beyond doubt – despite there being no evidence as to its terms. The only issue relates to the identification of the party to whom it was due and payable.
The defendant claims that it was due and payable to him. He says that the buyer’s advocate for SL106 contacted him personally and not in his capacity as CEO or as a director of Sanlorenzo Australia Pty Ltd,[37] and that all subsequent endeavours to broker that sale were undertaken solely by him and were undertaken only in his private capacity. The defendant places much emphasis on the fact that he was the person who did all the work to secure the sale and suggests that that in itself constitutes evidence that the transaction was completely removed from the pecuniary interests of the plaintiff.
[37]Transcript p 2-15, ll 4-15.
Unfortunately for the defendant there is no documentary evidence to support his claim yet there is much to contradict it.
The repeated use of the plural pronouns in the aforementioned emails are, when considered in the context of each email, only consistent with the defendant reporting to co-directors and shareholders of the plaintiff about the progress of a potential sale that he was brokering whilst acting on behalf of the plaintiff. The defendant’s evidence that he was “testing the waters” or “being communicative” with Mr Ross and/or Mr Taylor was nonsensical, inherently improbable and completely unbelievable.
The defendant’s credibility is further damaged upon examination of the “contract” that was struck to pay Mr Zhang a €50,000 introducer’s fee. The original agreement dated 4 November 2016 identified the parties to the agreement as being Mr Zhang personally and the defendant acting on his own behalf and on behalf of Sanlorenzo Australia Pty Ltd. It is necessary for me to repeat the body of that agreement:
“Whereas
A.Mark Ali is a principal of Sanlorenzo Australia which represents Sanlorenzo SPA in Australia.
B.Jeffery Zhang has assisted in the sale and purchase of a vessel SL106 – 610.
C.Sanlorenzo SPA is making a payment to Sanlorenzo Australia in connection with the sale and purchase of SL106 – 610.
D.a fee agreement between the parties is hereby reduced to writing.
It is agreed
1.In consideration of assistance provided by Jeffery Zhang, a fee of EUR50,000 equivalent AUD is payable to Jeffery Zhang by Mark Ali and by Sanlorenzo Australia.
2.Upon receipt of a fee payment to Sanlorenzo Australia made by Sanlorenzo SPA in connection with the sale and purchase of SL106 – 610, Mark Ali will cause a net sum of EUR50,000 to the AUD account of Jeffery Zhang at:
COMMONWEALTH BANK
(Bank details not reproduced)
3.Such transfer will be made forthwith on receipt of funds by Mark Ali from Sanlorenzo SPA. Upon the transfer of EUR50,000 a remittance receipt shall be forwarded to Jeffery Zhang at (email address not reproduced).”
The second version of this agreement, dated 9 November 2016, purports to identify the defendant as a party in “his personal capacity and a trustee of the Cotton 15 Trust”. The body of it states:
“Whereas
A.Mark Ali is involved with boat brokerage.
B.Jeffery Zhang has assisted in the sale and purchase of a vessel SL106 – 610.
C.Sanlorenzo SPA is making a payment in connection with the sale and purchase of SL106 – 610.
D.A fee agreement between the parties is hereby reduced to writing.
It is agreed
1.In consideration of assistance provided by Jeffery Zhang, a fee of EUR50,000 equivalent AUD is payable to Jeffery Zhang by Mark Ali.
2.Upon receipt of a fee payment to Mark Ali made by Sanlorenzo SPA in connection with the sale and purchase of SL106 – 610, Mark Ali will cause a net sum of EUR50,000 to the AUD account of Jeffery Zhang at:
COMMONWEALTH BANK
(Account details not reproduced)
3.Such transfer will be made forthwith on receipt of funds by Mark Ali from Sanlorenzo SPA. Upon the transfer of EUR50,000 a remittance receipt shall be forwarded to Jeffery Zhang at (email address not reproduced).”
The defendant testified that he did not prepare the first agreement,[38] yet gave no evidence as to the identity of the person who did draft it and provided no explanation as to why he drafted a second agreement. He also did not testify that anyone other than himself was in contact with Mr Zhang in relation to the brokerage of this deal.
[38] Transcript p 2-22, l 19.
In the absence of any evidence as to who prepared or drafted the first agreement, the only rational inference open in the surrounding circumstances of the defendant’s involvement in brokering the sale of SL106, is either that he drafted it or that it was drafted on his instructions. In either event, it is not disputed that he signed it. Furthermore, the contents of that first agreement are entirely consistent with the emails that the defendant had been sending to his co-directors/shareholders of the plaintiff.
The defendant agreed in cross-examination that he first learned of the plaintiff’s intention to institute this proceeding against him on 4 November 2016.[39] He denied however drafting the second agreement because he realised the damaging effect the first agreement would potentially have if he claimed that the commission was due and payable to him. Despite that denial, given the fact that the second agreement is dated just five days later, and that there is no evidence as to why the defendant signed the first agreement, in circumstances where he alleges that it was factually inaccurate and positively misleading, the only reasonable inference is that he did draft the second agreement because of that realisation. I am further supported in this conclusion when I note that the defendant did not exhibit nor refer to the first agreement in his material and that it was only discovered when Mr Ross caused a search to be undertaken of the plaintiff’s email records and discovered that Mr Zhang emailed a copy of the first agreement to the defendant on 9 November 2016 at 5.03pm. The defendant’s failure to refer to the existence of the first agreement is suspicious and further damages his credibility.
[39] Transcript p 2-22, l 43.
Furthermore the defendant’s email to the Chairman of Sanlorenzo S.p.A on 25 October 2016 is quite inconsistent with his claim that he only acted as a broker in the potential sale of SL106 in his private capacity.[40] In that email he requested “that the proceeds of the sale of SL106/610 be paid to my entity (As invoiced to Carlos Siriani last week)”. If his involvement in this deal was only ever in his private capacity, then one wonders why this request would be necessary. It is a request which is indicative only of a change of attitude on the part of the defendant as to his entitlement to the payment of the commission amount.
[40] Pages 62 and 63 of Exhibit 5.
I note also, that on 4 October 2016, Tony Ross emailed the defendant asking:
“Hi mate,
How goes things on the ground?
How did our buyer go?
Anything we can do from here?” [emphasis added]
In his response the defendant made no attempt to correct Mr Ross’ apparent view that the defendant was brokering the deal on behalf of Sanlorenzo Australia Pty Ltd nor did he seek to clarify why Mr Ross would claim the potential purchaser of SL106 as “our buyer”, and why he would be offering to help in relation to a transaction that had nothing to do with the plaintiff. Once again, I conclude that the only reasonable explanation is that the defendant was acting on behalf of the plaintiff when brokering this deal.
For these reasons I am satisfied on balance of probabilities that the sale of SL106 was brokered by the defendant on behalf of the plaintiff and not on his own behalf. The combination of documentary evidence results in an overwhelming inference to that effect. Furthermore, the defendant’s evidences lacked creditability and, at times, was inherently improbable.
Remaining considerations
Given my conclusion above it is unnecessary for me to consider the interpretation of the written contract entered into between Sanlorenzo S.p.A and the plaintiff on 18 September 2014 and whether it also supports the plaintiff’s case. It is also unnecessary to consider whether the plaintiff has established that the commission amount belongs, in equity, to the plaintiff and is held by the defendant on a constructive trust.
I will hear the parties as to the terms of the order sought and as to costs.