Federal Court of Australia

Angelis v CP Pty Ltd (No 2) [2026] FCA 623

ORDERS

THE COURT ORDERS THAT:

1. The amended originating application filed on 29 May 2025 be dismissed.

2. The applicant pay the first respondent’s costs to be taxed if not agreed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

SARAH C DERRINGTON J:

INTRODUCTION

1 Wal’s Pharmacy is a 26-year old family-run Pharmacy Business, which operates from shops 2, 3, 4, and 5 of 2-4 Beverley Avenue, Warilla in New South Wales. It has an annual turnover of around $5 million. The matriarch of the Angelis Family is Hariclia Angelis, who did not give evidence in the proceedings. Hariclia’s three children, George Angelis, Angelo Angelis, and Vicki Angelis are all involved in the Pharmacy Business. George holds two tertiary degrees and is a registered pharmacist, who operates the Pharmacy Business. Angelo is also a pharmacist, who holds a Bachelor of Science and a Bachelor of Pharmacy from the University of Sydney. He generally works in the business but, during the period from March 2019 to April 2024, was the operator of the Pharmacy Business. Vicki, who also did not give evidence, is the financial controller who apparently works remotely from Greece. Hariclia works as a pharmacy assistant from time to time.

2 In addition to the Pharmacy Business, the Angelis Family has a number of corporate vehicles: Hervie Pty Ltd (of which Hariclia, Angelo, and Vicki are the directors), Aspirin Pty Ltd (of which Angelo is the sole director), Wal’s Chemist Pty Ltd (of which George is the sole director), Wal’s Pharmacy Pty Ltd (of which Angelo is the sole director), and Warfarin Holdings Pty Ltd (of which George is the sole director).

3 The Angelis Family accrued a property portfolio of at least 14 properties. Relevantly, the portfolio included the property from which the Pharmacy Business originally operated, 3-5 George Street, Warilla (the Warilla Property), and the family home in Louisa Road, Birchgrove (the Birchgrove Property).

4 On 17 October 2012, Australian Pharmaceutical Industries Ltd (API) issued a notice of default to George claiming an outstanding debt of $1.97 million. Negotiations were pursued with the aim of clearing the indebtedness. By February 2013, however, the financial position of the Angelis Family had become more precarious. On 28 February 2013, Suncorp Bank wrote to George, Angelo, Vicki and Hariclia to inform them they were in default under the terms of the security for the approximate $5.5 million facilities with Suncorp and Bankwest.

5 On 16 September 2013, Suncorp offered to refinance all the Bankwest facilities and to provide additional funding to assist with the payout of the API debt.

6 On the same day, George and Angelo entered into a Deed of Loan with Proactive Management Specialists Pty Ltd, pursuant to which $600,000 was advanced at an interest rate of 18% and which, according to Item 6 of the Deed, was to be repaid on 18 January 2013. This was clearly an error. Nevertheless, the loan was to be secured by mortgages to the extent of George’s and Angelo’s interests in nine properties and over their interests in the Pharmacy Business. Seven of those interests overlapped with those the subject of Suncorp’s offer.

7 On 14 October 2013, George executed a General Security Agreement (GSA) granting a charge over all his present and after acquired property, including the Pharmacy Business in favour of Suncorp. On 16 October 2013, the Angelis Family and Hervie executed the Suncorp offer to refinance, secured, inter alia, by mortgages over 11 properties and the GSA. They also executed a Deed of Cross Collateralisation in respect of all monies owing to Suncorp.

8 By August 2017, the Angelis Family’s financial position was again precarious. Suncorp issued formal demands to each member of the Angelis Family and Hervie in respect of multiple facilities. In December 2017, a supplier to the Pharmacy Business, Sigma, called in a debt of $1.5 million. George commenced selling off some of the secured properties, and Suncorp applied the total sale proceeds to the outstanding facilities.

9 George declared himself bankrupt on 9 July 2018. The following day, 10 July 2018, Suncorp appointed Receivers and Managers (Receivers) over all assets of Hervie and George and also appointed the Receivers as Agents for Mortgagee in Possession of the properties of which George, Vicki and Angelo were mortgagors, including the Pharmacy Business. The Receivers commenced to realise the assets.

10 What happened next in relation to refinancing the Angelis Family’s assets, including the Pharmacy Business and the Birchgrove Property, is at the core of the dispute in these proceedings.

11 On 4 April 2019, Angelo and Hervie commenced proceedings in the Supreme Court of New South Wales (Supreme Court Proceedings) to restrain Suncorp from selling the Pharmacy Business and the Warilla Property on the basis that Angelo had arranged refinancing on the Pharmacy Business and the Warilla Property in the amount of $3.6 million and that further funding was being sourced. An injunction was initially granted on payment into the Supreme Court of $3.8 million but, on 11 April 2019, the Supreme Court refused to extend the injunction because the funds were still insufficient to discharge the debts owed to Suncorp. Later that day, CP Pty Ltd provided an additional $3 million which, on 12 April 2019, was paid into the Supreme Court. On that same date, Kunc J ordered that the sum of $6,583,359.30 be paid out of Court to Suncorp and restrained Suncorp from dealing with its securities over the Pharmacy Business and the Warilla Property, and noting the undertaking by Suncorp to Angelo and Hervie to provide transfers of the existing securities at their direction upon receipt of the monies.

12 CP contends that the $6.8 million it made available for the Supreme Court Proceedings was the subject of a loan agreement between it and the Angelis Family which was secured by a mortgage over the Warilla Property and a charge over the Pharmacy Business in the form which had previously been held by Suncorp, being a GSA (and a security interest in the Birchgrove Property) (the Alleged Agreement).

13 CP is a company of which Mr Emmanuel Karamihas is the sole director and shareholder and which he used as an investment vehicle. Mr Karamihas is a close personal friend of Mr Simon Konstantinidis, a solicitor and principal of Konstan Lawyers. Although he has his own accounting practice, E. Karamihas & Co, Mr Karamihas works full-time out of the offices of Konstan Lawyers where he manages the accounts of the firm and the service companies which employ the staff, in addition to managing Mr Konstantinidis’ personal business affairs.

14 Mr John Theodoropoulos is a solicitor in the employ of Konstan Lawyers. He had the day-to-day carriage of the Supreme Court Proceedings on behalf of the Angelis Family.

15 Mr Konstantinidis has known the Angelis Family for over 38 years and has acted for them in various matters over that period, sometimes as their solicitor but also, as will become apparent, as a finance broker and lender. Whether he was required to comply with the provisions of Part 7.6 of the Corporations Act 2001 (Cth) in so doing was not a matter explored in these proceedings. Mr Konstantinidis is the sole director and shareholder of Proactive Management who arranged the loan to repay API referred to earlier.

16 CP registered its security interest over George’s personal property (recorded in the GSA) on the Personal Property Securities Register (PPSR) (registration number 202206160013468) on 16 June 2022 in purported accordance with the Personal Property Securities Act 2009 (Cth) (PPSA). In these proceedings, the Angelis Family challenge the legitimacy of that registration. It seeks a declaration that CP does not hold a security interest over any of George’s personal property and an order pursuant to s 182(4)(a), or alternatively s 182(4)(c) of the PPSA, requiring the Second Respondent, the Registrar of Personal Property Securities, to register a financing change statement removing the registration of the purported security interest with registration number 202206160013468. The Angelis Family contend that no loan agreement was ever reached with CP.

17 The question of where the onus of proof lies in an application such as this is prominent in these proceedings because of the unsatisfactory nature of much of the evidence. In Wickham Hill Investment Pty Ltd v Ding [2019] NSWSC 631, Parker J considered the question of onus in these applications. His Honour said:

[162]    … The statutory requirement for removal is negative in form. The consequence is, as Beach J said in National Australia Bank v Garrett, that the onus lies on a grantor seeking removal of the registration to demonstrate that no security interest exists.

[163]    There is nothing strange or unusual about this. If a right or entitlement depends upon a certain state of affairs not existing, then in the absence of some statutory provision to the contrary, the onus lies on the party seeking to establish that right or entitlement to negative the existence of that state of affairs…

[164]      … A party who bears the legal onus on an issue may present sufficient material to the Court for the evidentiary onus to shift to the opposing party. In a s 182 application, generally speaking it is the secured party who is best placed to lead evidence which would sustain the security interest claimed. In such circumstances, little evidence may be required from an owner of the collateral who is disputing the security for an evidentiary onus to shift to the secured party to prove that the claimed interest exists.

[165]    I also respectfully think that principle would be better served if the onus did lie on the security holder in an application under s 182. The lodgement of a finance statement on the Register, as we have seen, is purely an administrative process. It is not realistic to expect the Registrar to consider the bona fides of such statements when they are lodged. But a registration may have an important practical effect, making it harder for the owner of the collateral to raise finance. Registration also has a legal effect on the relative priorities between security holders. I think the balance will be better struck if the onus lay on the party claiming to have a security interest, once challenged, to justify that interest.

Issues in Dispute

18 Following the applicant’s filing of an interlocutory application on 16 October 2025 which sought orders amending his Points of Response, there were apparently five issues in dispute prior to the commencement of the hearing:

(a) Was there a loan agreement?

(b) Does s 32 of the PPSA have the effect that the security in the Pharmacy Business was extinguished such that George is entitled to the relief sought?

(c) Does George’s bankruptcy provide a reason why the Court should grant the relief sought?

(d) In any event, was the loan from CP repaid by George and/or the Angelis Family?

(e) Does the Ankar principle apply or result in the Court disturbing the ‘status quo’ by removing the PPSR registration?

19 In the written opening submissions made on behalf of George, those issues had reduced to four. In oral opening, Counsel for George indicated that the only significance of George’s bankruptcy was limited to its connection with his primary argument, which was directed to the only significant issue that remained in dispute – whether an agreement was reached between him, or any member of the Angelis Family, and CP in respect of the security the subject of the GSA.  No other issues were pressed.

Was there an agreement?

20 CP contends that the facts and the evidence would convey to an objective bystander that:

(a) by 4 April 2019, Mr Konstantinidis (on behalf of CP) and George and Angelo (on behalf of the Angelis Family and Hervie) had agreed that CP (as lender) would lend the Angelis Family and Hervie (as borrowers) $3.8 million in exchange for security over the Pharmacy Business and the Warilla Property;

(b) on 11 or 12 April 2019, the agreement was varied such that the loan amount was increased by $3 million to a total of $6.8 million;

(c) the monies were advanced for the purpose of discharging the debt owed to Suncorp by the Angelis Family and Hervie; and

(d) the consideration for the loan was a mortgage over the Warilla Property, a GSA over the Pharmacy Business and a security interest in the Birchgrove Property.

21 CP concedes that there is uncertainty as to what rate of interest was to be charged and as to the term of the loan. It submits such uncertainty is no reason for finding that the Alleged Agreement did not exist.

22 George submits that the only basis upon which it could be sensibly pressed that, by 4 April 2019, there was an agreement to borrow $3.8 million is on the basis that Angelo would purchase the business from the Receivers, something which never happened. He submits that the contention that the monies were to be used to pay out Suncorp only arose later when it became clear that another potential lender, Yorkdale Capital Pty Ltd, was not going to provide funds for the purchase of the Pharmacy Business.

The principles

23 The principles as to the formation of a contract are well-settled and largely uncontroversial.

24 The issue in this case is whether there is sufficient certainty as to the Alleged Agreement to support the continued registration of the GSA over the Pharmacy Business on the PPSR.

25 The parties agreed that the proper approach to the construction of the Alleged Agreement was that which accords with the objective theory of contract – what a reasonable person in the position of the parties would conclude having regard to the text of the relevant documents, the relationship between the parties and the genesis, purpose and object of the transaction: Pacific Carriers Ltd v BNP Paribas [2004] HCA 35, 218 CLR 451 at [22]; Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; 219 CLR 165. In the latter case, at [40], Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ put it this way:

This Court, in Pacific Carriers Ltd v BNP Paribas, has recently reaffirmed the principle of objectivity by which the rights and liabilities of the parties to a contract are determined. It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe.

(Footnotes omitted.)

26 It is also well established that a contract need not be express; it may be inferred from the acts and conduct of the parties as well as, or in the absence of, their words. As Allsop J (with whom Drummond and Mansfield JJ agreed) observed in Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd [2001] FCA 1833; 117 FCR 424 at [369]:

[A] number of authorities discuss the need not to constrict one’s thinking in the formation of contract to mechanical notions of offer and acceptance. Contracts often, and perhaps generally do, arise in that way. They can also arise when business people speak and act and order their affairs in a way without necessarily stopping for the formalities of dotting “i”s and crossing “t”s or where they think they have done so.  … Sometimes this failure occurs because, having discussed the commercial essentials and having put in place necessary structural matters, the parties go about their commercial business on the clear basis of some manifested mutual assent, without ensuring the exhaustive completeness of documentation. In such circumstances, even in the absence of clear offer and acceptance, and even without being able (as one can here) to identify precisely when a contract arose, if it can be stated with confidence that by a certain point the parties mutually assented to a sufficiently clear regime which must, in the circumstances, have been intended to be binding, the court will recognise the existence of a contract. Sometimes this is said to be a process of inference or implication. For my part, I would see it as the inferring of a real intention expressed through, or to be found in, a body of conduct, including, sometimes, communications, even if it be the case that the parties did not consciously advert to, or discuss, some aspect of the relationship and say: ‘and we hereby agree to be bound’ in this or that respect. The essential question in such cases is whether the parties’ conduct, including what was said and not said and including the evident commercial aims and expectations of the parties, reveals an understanding or agreement or, as sometimes expressed, a manifestation of mutual assent, which bespeaks an intention to be legally bound to the essential elements of a contract.

(Emphasis added.)

27 Although Counsel for George did “not cavil with his Honour’s analysis generally”, he sought to distinguish it in four ways from the present case. First, he pointed to the passage’s reference to the way “business people speak and act”, contrary to what was submitted to be the circumstances of this case which Counsel characterised as establishing a fiduciary relationship between Mr Konstantinidis and the Angelis Family. Secondly, Counsel contended that the present case did not involve commercial business, nor was the reaching of any purported terms clear. Thirdly, it was submitted that the Court could have no confidence that there was any sufficiently clear regime intended to be binding and, fourthly, the circumstances of the present case do not reveal an understanding or agreement or “a manifestation of mutual assent”. I will return to these submissions.

28 The post-contractual conduct of the parties also looms large in this case. Evidence of post-contractual conduct cannot aid in the construction of a written contract, but there is no impediment to its use as an aid to whether a contract was formed and when it was formed: Film Bars Pty Ltd v Pacific Film Laboratories Pty Ltd (1979) 1 BPR 9251 at 9255 per McLelland J; Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540 at 548-9 per Gleeson CJ; Brambles Holdings Ltd v Bathurst City Council [2001] NSWCA 61; 53 NSWLR 153 at [25] per Heydon JA; Sagacious Procurement Pty Ltd v Symbion Health Ltd [2008] NSWCA 149 at [69] per Giles JA. Having surveyed the competing jurisprudence on the scope of the “general rule” in Australia and positing that what difficulties remain might be removed were Australia to adopt the UNIDROIT Principles of International Commercial Contracts 2004 (particularly arts 4.1-4.3), Allsop P said in Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407; 76 NSWLR 603 at [13]:

This clearing of the ground in respect of contractual construction and interpretation leaves untouched the role, if the facts admit, of “later” conduct in: (a) ascertaining whether there was a contract formed and when it was formed: Howard Smith and Co Ltd v Varawa (1907) 5 CLR 68 at 78; Barrier Wharfs Ltd v W Scott Fell & Co Ltd (1908) 5 CLR 647 at 668–669 and 672; and Australian Broadcasting Corporation v XIVth Commonwealth Games (at 547–548) and cases there cited; (b) revealing probative evidence of antecedent surrounding circumstances; and (c) revealing probative evidence of facts relevant to rectification, estoppel or any other legal, equitable or statutory rights or remedies that may impinge on an otherwise concluded, construed and interpreted contract.

29 In like manner, in considering whether parties to an alleged contract have evinced an intention to be bound, the Full Court of the Federal Court (Derrington, Cheeseman and Jackman JJ) held that evidence that the parties dealt with each other after the alleged contract date in a manner consistent with their having entered into a contract on that day can be relevant to the assessment of whether the contractual intention existed at the earlier time: Cirrus Real Time Processing Systems Pty Ltd v Jet Aviation Australia Pty Ltd [2025] FCAFC 85; 311 FCR 408 at [156].

30 George points to three surrounding circumstances which are said to support his contention that an objective bystander would conclude that no agreement had been reached between him (and/or the Angelis Family) and CP, let alone the Alleged Agreement.

31 The first is said to be that “the unsophistication” of George and Angelo was known to Mr Konstantinidis. It was submitted that their confusion during the course of cross-examination “was not only indicative of their current understanding of matters but rather was demonstrative of their understanding at the time the November 2018 to April 2019 discussions took place”.

32 Secondly, it was submitted that Mr Konstantinidis knew that George and Angelo were indebted to him, both personally and through his company Proactive Management, in respect of the API loan and that if the Suncorp debts were not refinanced, it would not be possible for the API loan to be repaid.

33 Thirdly, it was submitted that “the participants”, presumably the members of the Angelis Family and Mr Konstantinidis, knew that George and Angelo “did not read and digest the spate of material put before them and/or did not receive the benefit of any explanation from Mr Konstantinidis as to the various refinance options which were being pursued.”

The surrounding circumstances viewed objectively

34 Despite the fact that Mr Konstantinidis is a solicitor, I do not accept that he acted in that capacity in relation to the Alleged Agreement. No case of breach of fiduciary duty was run in these proceedings but there was, in any event, little evidence that a solicitor/client relationship truly existed. Mr Konstantinidis’ conduct was, as I have already observed, in the nature of that of a finance broker and lender. Indeed, George deposed that he had “not engaged [Mr Konstantinidis] or Konstan Lawyers for any legal services for a very long time”. He said that to the best of his recollection, the last time was “about the time I declared myself bankrupt voluntarily on 9 July 2018”. Further, none of the usual indicia of a solicitor/client relationship existed. Mr Konstantinidis was unable to produce any costs agreement or any file notes of instructions taken from the Angelis Family, nor was there any evidence of written advices having been given. Mr Konstantinidis admitted in cross-examination that he had never issued any invoices for legal fees to the Angelis Family, apart from fee invoices rendered by Counsel in respect of the Supreme Court Proceedings. This was despite the fact that from October 2024 up until September 2025, Mr Konstantinidis inexplicably purported to assert a lien over the documents relating to these proceedings on the basis of unpaid fees until subpoenaed to produce the documents.

35 Moreover, contrary to George’s submissions, the evidence does not support findings that George and Angelo were unsophisticated, were not involved in commercial dealings, did not read and digest the material and/or receive the benefit of an explanation (or at least were not afforded an adequate opportunity to do so), nor that a sufficiently clear regime was not arrived at by mutual assent which bespeaks an intention to be legally bound to the essential elements of a contract. I will return to what I have found those essential elements to be.

36 I have already observed that nothing about George’s and Angelo’s background, including their business or commercial dealings, could be described as “unsophisticated”. Both have more than one tertiary qualification, and George at least has run a business for over 20 years with a typical annual turnover of $5 million. Although Angelo denied having much experience with accountants over those years, Mr Theo Kotselas, who had been the accountant for the Angelis Family over the past 20 years, gave unchallenged evidence that “[f]or a long time, I had George on a monthly retainer of about $4,000 per month. George would come to my office in North Sydney for usually between 1 to 1.5 hours just about every Friday”.

37 George deposed to the “large property portfolio” the Angelis Family had amassed, which, as I have already mentioned, comprised 14 properties. George, together with the rest of the Angelis Family had had significant financial dealings with Suncorp since 2011. These dealings included multiple facilities of which the members of the Angelis Family were guarantors. George at least was aware of the various securities held by Suncorp and of the meaning of the cross-collateralisation of those securities.

38 In evidence in chief, George deposed to having commenced discussions in late 2017, prior to his bankruptcy, with a representative of Metrofin Partners Pty Ltd named Mr Albert Callegher. George deposed that Metrofin was also known as Yorkdale. It appears that Yorkdale was one of the investors in Metrofin and, throughout the hearing, the names of the two were used interchangeably. Mr Callegher’s substantive role appeared to be that of a broker – he was CEO and Director of ACMF Project Finance and Advisory Pty Ltd. There was no suggestion that George sought the assistance of Mr Konstantinidis with respect to these discussions. In fact, George said that prior to his bankruptcy and after Sigma had called in its debt, he took “advice from multiple advisors”. Angelo also gave evidence of having independent conversations with Mr Callegher.

39 Mr Konstantinidis deposed to having had a meeting at his offices with George and George’s accountant, Mr Kotselas, on Saturday 27 October 2018. He said that George and Mr Kotselas had approached him for assistance with refinancing the Suncorp facilities and negotiating with the Receivers of the Pharmacy Business, who were also in possession of several properties including the Warilla Property and the Birchgrove Property. This was, self-evidently, not an approach for legal advice in Mr Konstantinidis’ capacity as a solicitor. Mr Konstantinidis said he was told they needed his help to save the Pharmacy Business and the home at the Birchgrove Property and that although Hariclia had already spoken to Mr Callegher, the approval they had through him was insufficient. He was also told that George was still operating the Pharmacy Business under a service agreement with the Receivers. Mr Konstantinidis said they rang Mr Callegher from the offices and arranged to have a meeting with him when he planned to come to Sydney the following Wednesday.

40 In his second affidavit, George denied any specific recollection of such a meeting but accepted it was possible it may have occurred. He said he understood that when he met with Mr Callegher, Mr Konstantinidis was there in his capacity as the family lawyer “advising on finance” and was not assisting with obtaining finance. He said he understood at all times that the full funds required to refinance the Suncorp debt and pay out the Receivers would be obtained from Yorkdale. George also disclaimed active involvement in the transactions because he was bankrupt and so he felt “there was little [he] could do to contribute”.

41 These assertions were but the first in a long line of disingenuous and obfuscating statements by which George tried to distance himself from the arrangements that were being negotiated by, and subsequently with, Mr Konstantinidis in an effort to save the Angelis Family from losing its income producing Pharmacy Business and the family home (the Birchgrove Property).

42 As to the submission that George and Angelo did not read and digest the “spate of material put before them”, it is true that the documents reveal that they received many of the documents through Mr Konstantinidis under the notation “FYI”, or by being carbon copied, or even blind carbon copied, to an email. It took some considerable effort on the part of Senior Counsel cross-examining George to get George to the point where he would even concede that he would have received an email into which he had been carbon copied. George’s default position was that if a document was not addressed directly to him, he “probably didn’t read the detail of it”. Similarly, Angelo was not willing to concede that he would have read documents into which he had only be copied.

43 None of the attempts by George and Angelo to distance themselves from knowledge of the documents that were passing to and fro between Mr Konstantinidis and the Receivers, the Receivers’ solicitors, or various prospective lenders and brokers was remotely credible. The attempts to save the Pharmacy Business and the Birchgrove Property were of the utmost importance to George and Angelo. Given the real threat that the Receivers would move to sell all the secured assets, I find Mr Konstsntinidis’ evidence that he spoke with George and/or Angelo “on the phone regularly, almost daily” to be inherently plausible. I infer that documents sent to George and/or Angelo on an “FYI”, carbon copy or blind carbon copy basis were sent in the context of conversations already had with Mr Konstantinidis. Even if George and Angelis did not read the documents as they sometimes asserted, I find that they were given ample opportunity to do so and to ask for an explanation of any of them were that required.

The documentary evidence

44 The documents show that on Friday 26 October 2018, George sent two emails to Mr Konstantinidis: the first at 1.56pm containing an email sent from Mr Jeffrey Chard about the caveats on various properties and the second at 7.58pm forwarding an email sent by his mother, apparently confirming a conversation she had had with Mr Callegher about the current financial position of Hervie. Mr Chard was a lawyer at Paul Bard Lawyers who acted for George in relation to the API loan between 2012 and about February 2013, when it appears Mr Konstantinidis took over negotiations with Bankwest. It appears that Mr Chard continued to act for George in relation to various matters at least up until 2019. Indeed, in February 2019 it is apparent that Mr Chard was acting for George in relation to the security interests over various properties.

45 An email dated 29 October 2018 sent from Mr Konstantinidis to Mr Callegher (copied to George and Angelo) referred to the telephone conversation on 27 October 2018 as occurring “in the presence of George Angelis”. That email confirmed Mr Konstantinidis’ then understanding that ACMF was in a position to arrange refinancing of the existing facilities of the freehold properties in the sum of “circa $5,800,000” and confirmed the meeting the following Wednesday. George agreed in cross-examination that, as far as he was concerned, Mr Callegher was a representative of Yorkdale and/or Metrofin, which were the same entity. Angelo recalled having a “short meeting with Albert and [Mr Konstantinidis] at [Mr Konstantinidis’] offices”.

46 Nevertheless, Angelo maintained that he did not have much contact with Mr Konstantinidis as he “was not the person who primarily gave [Mr Konstantinidis] instructions from our family”. He too contended that Mr Konstantinidis was primarily the family’s lawyer who they “trusted … was acting in [their] best interests”. Despite the Angelis Family’s various qualifications and experience, business dealings involving the Pharmacy Business, and a significant property portfolio (worth $14 million at one stage), Angelo contended that the Angelis Family was in “such a vulnerable state” in 2018 that he “trusted [Mr Konstantinidis] was acting in our best interest and didn’t ask any questions”. Angelo also attempted to assert that his purported signature on several documents was not in fact his despite there being no plea of non est factum. I reject both contentions as inherently implausible.

47 On 30 October 2018, George forwarded to Mr Konstantinidis emails he had received from Mr Gerald Uncle of Suncorp, in response to a request from George the previous day (copied to Mr Konstantinidis), which provided an indicative payout figure of $9,761,055.46 plus fees of the external administrator (BDO) and legal fees totalling approximately $250,000. In his email to Mr Uncle, George had said:

Could you please provide ,as I need to know ,the payout figure. This has been requested by the incoming Private financier/s.

(Emphasis added. Errors in original.)

48 On 4 November 2018, Mr Konstantinidis pressed Mr Callegher by email (copied to George and Angelo) for his proposal given that the Birchgrove Property was scheduled for auction on 10 November 2018. Mr Callegher responded (copying George and Angelo) on 7 November 2018, indicating that his investor was not open to proceeding with the revised loan offer, in part because “the Vendors unwillingness to meet the market quickly since last year and de gear with advice has come from their own Real Estate Agents has resulted unfortunately being caught in a market that has spiralled downwards” (errors in original). The email concluded by saying that, without extra security, “[ACMF] are unable to assist further at this stage”.

49 Two things emerge from this correspondence. First, the Angelis Family was “calling the shots”, as it were, in relation to the sale prices of their properties. There was no evidence that they were seeking Mr Konstantinidis’ advice in this respect. Indeed, they appeared to be obtaining advice elsewhere, albeit ignoring it. Secondly, there was no suggestion that the Angelis Family had any additional security to offer. Whatever possibility there might have been for Yorkdale to provide refinancing to the extent necessary to repay Suncorp, that door had by this date been firmly shut.

50 Mr Konstantinidis’ evidence was that, subsequent to this response from Mr Callegher, he received a series of emails from George and Angelo insisting that Angelo must purchase the Pharmacy Business and the Warilla Property from the Receivers and that they needed finance to do so. Angelo agreed in cross-examination that he was aware that receivers had been appointed over the Pharmacy Business pursuant to the securities held by Suncorp. He agreed that he had already put in an expression of interest to purchase the Pharmacy Business on 8 November 2018 for $3.5 million despite not having secured finance.

51 Neither George nor Angelo suggested that this had been done at Mr Konstantinidis’ instigation or in accordance with any advice from him. Mr Konstantinidis deposed that he had asked George why he had arranged for Angelo to make an offer when he knew Mr Callegher had not come through with the finance. Mr Konstantinidis deposed that “George asked me if there was any way I could help to raise funds (as I had done in the past)”. George categorically denied ever asking Mr Konstantinidis for assistance in raising funds for the Pharmacy Business, maintaining the position that, to the best of his recollection, the family was still in discussions with Yorkdale about refinancing the Suncorp debt and it was his “understanding that this is ultimately what occurred”. In the face of Angelo’s offer, and the evidence given by George, Angelo, and Mr Konstantinidis as to the importance to the Angelis Family of retaining the Pharmacy Business, it is inherently more plausible that George and Angelo took a risk that the offer would be accepted and that they expected, if they asked, that Mr Konstantinidis would come through with funds, as he had done in the past.

52 On 7 November 2018, Mr Konstantinidis asked George and Angelo to “approve [a] draft email” to Suncorp and its lawyers which conveyed the following information and proposals:

Suncorp will receive total proceeds of sale of the Wollongong Property (12/54-58 Cliff Road, Wollongong NSW), expected to be circa $2.14 million with settlement in 4 weeks.

That would reduce the aggregate debt to circa $7.9 million.

Angelo had sourced two private financiers prepared to collectively lend $8.2 million in two tranches, $2 million to purchase the Pharmacy Business (see below) and a second advance to cover the remaining real estate securities.

Payout of Real Estate Securities – there was an investor prepared to advance $6.2 million on a first mortgage basis over: sale proceeds of the Wollongong Property; the Birchgrove Property, the Glebe Property (19 and 19A Westmoreland Street, Glebe in New South Wales), and the Warilla Property.

Sale of Pharmacy Business to Angelo Angelis – there was a second investor through a firm of accountants prepared to advance Angelo for $2 million inclusive of stock to purchase the Pharmacy Business from the Receivers; they were aware this might require more time because approval of the Pharmacy Board of NSW was also required; Angelo and the incoming financier were prepared to offer Suncorp such secured position that may be agreed pending final completion.

53 Less than 20 minutes later, George responded, “Agreed”, adding that “Angelo will need to purchase pharmacy under a company name and [Mr Kotselas] suggested purchasing the properties in a trust”. Again, the evidence revealed that George and Angelo were not vulnerable to Mr Konstantinidis in respect of this matter; they were receiving advice from others, including Mr Kotselas. In cross-examination, George agreed that he understood he was giving instructions to a proposal that involved two financiers, one for the Pharmacy Business and one for the real estate, and that the incoming financier in respect of the Pharmacy Business would be taking security in respect of that business in place of Suncorp. Such an understanding was consistent with the email he had sent to Mr Uncle on 30 October 2018. He maintained his position, however, that he thought the “firm of accountants” might have been Mr Martin Reukers who introduced Yorkdale.

54 In the meantime, Hariclia had also been trying to source additional funds. She wrote independently to Mr Callegher on 7 November 2018 saying:

If Andrew Sallway does not agree to cancel auction on Saturday

Would you be able to finance a deposit so we can bid for Birchgrove

On Saturday. And then sell down Westmoreland street. And pharmacy building

In the 6 weeks settlement timeframe.

(Errors in original.)

55 The following day, 8 November 2018, George wrote to Mr Konstantinidis (without copying Angelo) saying:

Angelo must purchase the pharmacy tomorrow for $3.65mil Requires approval of Andrew Sallway. Angelo is going to Guild office first thing Then we can sell building

(Errors in original.)

56 Angelo received a response to his expression of interest to purchase the Pharmacy Business from the Receivers on 14 November 2018, informing him that the Receivers would require an unconditional offer or evidence of sufficient funds to meet the offer of $3.5 million. He forwarded this response to Mr Konstantinidis on 14 November 2018. He also forwarded the response to George and Hariclia on 14 November 2018, who in turn forwarded it to Mr Konstantinidis the following day.

57 On 7 December 2018, Mr Konstantinidis went back to Mr Callegher (copying George and Angelo) with a new proposal which included refinancing:

(a) the debt on the Wollongong Property until settlement proceeded on 15 February 2019 (at 90%);

(a) the Glebe Property listed for auction by Receivers on 15 December 2018 valued at $2.45 million (at 75%); and

(b) the Birchgrove Property valued at $4 million (at 75%).

58 The email stated that the balance of the debt owed to Suncorp (approximately $3.4 million for the Pharmacy Business and the Warilla Property) would be funded by Mr Konstantinidis’ private financiers.

59 On 18 December 2018, Mr Konstantinidis informed Mr Callegher (copying George, Angelo and Hariclia) that the Glebe Property had been passed in at auction and suggesting he obtain approval for the Glebe Property and the Wollongong Property at $4.15 million and reducing the estimate on the Birchgrove Property to $3 million. The email says he had spoken with George who was prepared to speak with the Receivers and consent to a reduced reserve for the Glebe Property of $1.95 million. The email asked Mr Callegher to “advise if you can provide indicative approval to the above”. Once again, this correspondence clearly indicates the capacity in which Mr Konstantinidis was acting vis à vis the Angelis Family.

60 Mr Callegher responded on 19 December 2018 (copying George, Angelo and Hariclia) setting out the relevant figures and observing,

Other than saving their business and talking extra time to sell Birchgrove for max possible, its almost not worth doing, UNLESS their business is sold making $1m pa and they rebuild themselves.

(Errors in original.)

61 Mr Konstantinidis’ response was in the following terms (forwarded to George and Angelo):

Saving their business is the main or only reason why they are doing this.

…

I am confident that is why I am backing them with My accountants clients’ monies.

(Errors in original.)

62 This exchange is yet further evidence that Mr Konstantinidis’ interest in this matter was financial; not legal.

63 To the extent that George remained under any misapprehension as at 7 November 2018 as to the identity of “My accountants” in the proposal put together by Mr Konstantinidis, he must have been disabused of it by this email. The language was unequivocal. George eventually conceded as much in cross-examination. George’s evidence in chief that, until the commencement of these proceedings, he was unaware of any arrangement involving Mr Konstantinidis and/or his nominated entities or representatives cannot be accepted.

64 Nevertheless, George continued to deny the proposition that finance had been provided by any entity other than Yorkdale. In cross-examination, George was shown a letter dated 20 December 2018 addressed to the Pharmacy Guild from Konstan Lawyers. George agreed that the letter was forwarded to him and Angelo by Mr Konstantinidis on that day at 4.41pm. Consistent with George’s email to Mr Konstantinidis that “Angelo must purchase the pharmacy” and with the Pharmacy Guild’s requirement of evidence of an unconditional offer of finance, the letter enclosed an unconditional offer of finance for $3.8 million to enable Angelo to purchase the Pharmacy Business and the Warilla Property.

65 The offer (13 December 2018 Offer) was addressed to Angelo from E. Karamihas & Co, Accountants, who stated finance had been arranged from “Private clients under a Unit Trust Arrangement” and included the following terms:

Amount of principal        $3,800,000.00

Term:                One (1) year

Special Conditions:    The lender is prepared to advance a 10% deposit in respect of the proposed purchase above upon a valid and binding exchange of contracts.

Interest rate    Commercial in confidence

Security    1)     Freehold 3-5 George Street, Warilla

2)     Fixed and Floating PPSR over the Plant Equipment. Inventory Goodwill Wal’s Pharmacy

3)    Other Security: To be provided by CP Pty Ltd

Terms: Commercial in Confidence

66 Nothing in this letter supports George’s insistence that this offer of approved finance “was incorporated with the Yorkdale loan”. Angelo similarly maintained the position that his understanding at this time was that the source of the finance was Yorkdale, despite the express terms of the 13 December 2018 Offer. He said he could not recall receiving or looking at the document despite its having been emailed directly to him.

67 Hariclia was apparently told about the approved finance from the clients of E. Karamihas & Co. An email between Hariclia and Mr Robert Kirk of Platinum Mortgage Management dated 20 December 2018 appears to record the contents of a telephone conversation between them in which Hariclia sought “a 3-month loan with capitalised interest and fees and an offer letter by Monday the 24th with settlements in January 2019”. She had continued to attempt to source additional finance. Mr Kirk requested a “Copy of the loan approval provided by the accountant”. On 21 December 2018, Hariclia forwarded the email to George, who almost immediately on-forwarded it to Mr Konstantinidis with the observation that it was “from Platinum Finance that we approached through the week”. In cross-examination, George denied any knowledge of an approach to Platinum Mortgage Management.

68 There appear to be no documents to explain the elapse of a month before Mr Callegher reverts to Mr Konstantinidis on 21 January 2019 asking him “to confirm exacting (sic) what you can provide net thanks”. This email is forwarded to George and Angelo by Mr Konstantinidis. He tells them:

Mr Callegher had increased his fees for the previous loan which did not proceed from $100,000 to $320,000;

Mr Konstantinidis had secured a loan from his clients for a total of $3 million (Mr Callegher had erroneously factored in $3.5 million); and

“confirming so that there is no misunderstanding, that my clients are financing a gross total of $3mil for Warrilla (sic) sale of freehold and Loan for purchasing the business for Angelo in terms of the structure last proposed and discussed with Theo Kotselas and George Angelis”.

69 Despite accepting that the prospect of losing the Pharmacy Business was a matter of significant importance to the Angelis Family, Angelo denied that there was “a lot” of talking with George and Mr Konstantinidis about how they were going to refinance to save the Pharmacy Business. This denial seems inherently implausible, particularly considering that George and Angelo worked together in the Pharmacy Business.

70 On 21 January 2019, George and Angelo are copied to an email from Mr Konstantinidis to Mr Callegher in which the refinancing split as between Yorkdale and private finance is clearly set out. It is followed by an email the following day from Mr Konstantinidis to Mr Callegher (copying George and Angelo) in which he says:

I am instructed to amend the request for finance as follows:

1. Loan Amount: $2,850,000. This represents approximately 75% of LVR even if the property is now valued at $3.8 mil down from $4mil.

2. Security: Property at 51 Louisa Road Birchgrove

…

Kindly confirm that your client will approve the above proposal and request an urgent unconditional letter of approval today please.

71 Mr Callegher responded (copying George and Angelo) that he would need an updated valuation to proceed unconditionally.

72 On 23 January 2019, Konstan Lawyers wrote to the Receivers to inform them that Angelo and Vicki had obtained approved finance to pay out Suncorp made up of $3 million from “Metro Finance Partners Pty Ltd” (Yorkdale) in accordance with an approval letter dated 22 January 2019 and $3.5 million from private sources in the names of “E Karamihas & Associates” to finance the Pharmacy Business and Warilla Property. Materially, the letter requested the Receivers to withdraw or not proceed with any sale of the Pharmacy Business. Mr Konstantinidis blind copied Angelo and George to that correspondence.

73 Over the next few days, there was correspondence between the Receivers and Mr Konstantinidis, culminating in an expression of scepticism on the part of the Receivers that the refinancing would in fact occur, “given the history of false starts”.

74 On 7 February 2019, Mr Konstantinidis assured the Receivers that “The refinance will occur!” and proceeded to highlight the benefits of the current proposal. First, it was said, “our client Angelo Angelis has been able to secure refinance for the Pharmacy business and property from private sources from a firm of Accountants via client monies”. Secondly it was said, “more significantly our client has approved finance from MFP Metro Financial Partners Pty Ltd who have agreed to fund a re finance of the Louisa Rd property as well as the exchanged contract for 19 Westmoreland street Glebe” (emphasis added). Reference was also made to terms having been reached with George’s Trustee in Bankruptcy pursuant to which the Trustee would consent to do all things necessary to transfer George’s share of the Pharmacy Business and his interests in the assets subject to the Suncorp securities.

75 This email was forwarded to George and Angelo by Mr Konstantinidis on 7 February 2019 at 4.08pm. In cross-examination, George conceded that the contents of the email were consistent with his understanding that there were two sources of finance. Angelo was not prepared to concede that he received this communication which indicated that the finance was coming from a private source, being a firm of accountants.

76 It was put to Mr Konstantinidis in cross-examination that no agreement was ever in fact entered into, there being no evidence that Angelo ever borrowed money on the terms of the 13 December 2018 Offer. Mr Konstantinidis denied that proposition and asserted that an oral agreement had been reached between himself, George, Angelo, and Hariclia for “the family to acquire the business” with Angelo as the “nominated person because he was a pharmacist”. Mr Konstantinidis conceded that repayment terms were not discussed at this time. He also asserted that the Angelis Family would “undertake refinance of the pharmacy in order to pay CP back”.

77 What was described as a “variation” of the 13 December 2018 Offer was made on 8 March 2019 in the following terms (8 March 2019 Variation of Offer):

Re: Revised letter of offer of Finance of proposed purchase of Wal’s Pharmacy and Proposed Purchase of Freehold property of 3-5 George’s Street, Warilla

We are accountants and confirm we have arranged finance from Private clients under a Unit Trust Arrangement in order to finance your abovementioned proposed acquisition of the Pharmacy business situated at the above premises including the freehold interest in the property 3-5 Georges Street, Warilla as follows:

Amount of principal        Total Loan $3,500,000.00 advanced as follows:

(A) $1,150,000 (to acquire 3-5 George St, Warilla)

(B) $2,150,000 (to acquire Pharmacy business being Wal’s Pharmacy) - $200,000 for stock

Term:                One (1) year

Loan:                Commercial Loan

Purpose:            Refinance Existing Debt with Suncorp Limited

Security:        1)     Freehold 3-5 George Street, Warilla owned

by Hervie Pty Ltd

2)    Pharmacy Business known as Wal’s Pharmacy at 3-5 George Street, Warilla

Interest rate:            1)      Seven and a half per cent (7.5%) per annum

2)      Twelve per cent (12%) per annum

Repayment:            Interest only repayments in advance

1) $7,187.50

2) $26,875.00

Lenders Loa Fee and

Application Fee:        One and a half per cent (1.5%) of Loan Amount

Legal Fees:            $2,200 plus Disbursements

Security:            1)       Freehold 3-5 George Street, Warilla

2) Fixed and floating PPSR over the business, Plant, equipment, inventory and Goodwill of Wal’s Pharmacy.

(Errors in original)

78 On 12 March 2019, Mr Konstantinidis forwarded to George a letter of the same date, sent to the Receivers, in which he requested them to refrain from entering into a contract for the sale of the Pharmacy Business and the Warilla Property. That letter referred to the approved private source of funds through “Accountants” E. Karamihas & Co for the Pharmacy Business and the Warilla Property (and enclosed the 8 March 2019 Variation of Offer) and a $3 million facility from Metrofin to refinance the Birchgrove Property.

79 On 19 March 2019, Angelo executed an Assignment of Vesting Interest in favour of Mr Konstantinidis pursuant to which Mr Konstantinidis acquired, inter alia, a “charge over the Pharmacy Business to be transferred to Angelo subject to the interests of Suncorp Limited”. As matters transpired, the Pharmacy Business was never transferred to Angelo. That does not matter, the charge was nevertheless over the Pharmacy Business which has always remained in the hands of George. An attempt was made to suggest that neither George nor Angelo would ever have agreed to the terms of this Assignment when the intention was always to keep the Pharmacy Business within the Angelis Family. However, it makes perfect sense in the shadow of the alternative, being a sale by the Receivers to a third-party unrelated to the Angelis Family. There was not a skerrick of evidence that Mr Konstantinidis had a motive to dislodge the Angelis Family from the Pharmacy Business; to the contrary, everything pointed to his desire that George and Angelo continue to run the Pharmacy Business and return it to its former success (circa $20 million annual turnover) so that his investment could be serviced.

80 On 21 March 2019, George’s Trustee in Bankruptcy acknowledged receipt of $25,000 from Angelo in respect of his vesting interest in the Pharmacy Business. The funds to enable the transfer had been provided by Mr Konstantinidis.

81 By 28 March 2019, Metrofin had reduced the approved facility to $2,812,500. Mr Konstantinidis informed George and Angelo of this and asked that Angelo, Vicki and Hariclia sign and return the offer urgently. A further revised offer from Metrofin was forwarded by Mr Konstantinidis to George and Angelo on 2 April 2019. By return, George queried the requirement to sell the Birchgrove Property at auction on the following Saturday. This was consistent with the family’s prior reluctance to accept the advice of their real estate agents as referred to in the rejection email sent by Mr Callegher on 7 November 2018 referred to above.

82 On 3 April 2019, Angelo, as a Director of Wal’s Pharmacy Pty Ltd, executed an offer of finance from Metrofin for $2,875,000 (April 2019 Metrofin Offer). George witnessed his signature. The security offered was specified as follows:

1. First mortgage 51 Louisa Road Birchgrove;

2. Clear Title with all caveats removed;

3. PPSR & GSA over the company borrower;

4. PPSR and GSA also over the pharmacy business (second ranking);

5. Second Mortgage on the commercial property (Pharmacy property) 3-5 George St Warilla NSW (We understand $3.600m ranks ahead)

6. Any other item required in the opinion of the lenders lawyers to allow the lender to secure its position that is reasonably required;

7. Guarantees by the directors.

(Emphasis in original.)

83 On 4 April 2019, Mr Konstantinidis requested, through Mr Callegher, confirmation that Summer Lawyers were acting for Yorkdale and that they had in trust the sum of $2.6 million to fund the borrower on the terms of the April 2019 Metrofin Offer. Mr Paul Reese of Summer Lawyers sent such a letter to Mr Konstantinidis at 11.36am. At 1.03pm, Mr Reese wrote again to Mr Konstantinidis informing him that he could not rely on the letter sent at 11.36am unless Angelo and Vicki agreed to pay $122,650 in various fees, regardless of whether the loan proceeded or not. Mr Konstantinidis forwarded that email to George at 1.35pm. Angelo and Vicki did not agree to pay that sum.

84 By 4 April 2019 then, the following was apparent to the Angelis Family and Mr Konstantinidis:

(a) Yorkdale had offered a loan facility of $2,875,000;

(b) the Angelis Family knew this was insufficient to repay Suncorp;

(c) the Yorkdale loan facility was to be secured by a first ranking mortgage on the Birchgrove Property, a second ranking mortgage over the Warilla Property, and a second ranking GSA over the Pharmacy Business;

(d) the statement of understanding as to the $3.6 million “ranking ahead” was consistent with the 8 March 2019 Variation of Offer (albeit the latter was for $3.5 million not $3.6 million);

(e) the Angelis Family knew that at least $3.5 million in private funds had been sourced by Mr Konstantinidis through Mr Karamihas;

(f) the term of the loan, the interest rate, the repayment terms, and the security required were specified in the 8 March 2019 Variation of Offer.

The Supreme Court Proceedings

85 On that same day (4 April 2019), Angelo and Hervie commenced proceedings in the Supreme Court against Suncorp seeking to restrain it from selling the Warilla Property and the Pharmacy Business.

86 An affidavit of Angelo dated 4 April 2019 was read in support of the application. In that affidavit, Angelo deposed:

[51]     I have arranged a refinance of the Pharmacy business of Wal’s Pharmacy, and the Warilla Property. This is for $3.6 million.

[52]    In addition, I have arranged a refinance of the Birchgrove Property. That is for a loan facility of $2.875 million, the funds of which (being $2,504,000, after capitalised interest and costs) will be available in the lender’s trust account tomorrow, and is ready to proceed following execution of security documentation. A letter from Summer Lawyers to Konstan Lawyers dated 4 April 2019 is at page 45 of exhibit AA-1. A copy of the loan agreement is at page 46 of exhibit AA-1.

87 Angelo agreed in cross-examination that he “would have read” the affidavit and that he understood it was evidence he was giving before the Supreme Court. He agreed that he would have been careful to ensure that it was accurate before he signed. He nevertheless continued to maintain that he did not remember anything about Mr Konstantinidis’ clients being one source of the funding.

88 It is to be recalled that by this time, two conditional offers of finance had been made by Metrofin (Yorkdale). One, dated 2 April 2019, contemplated the incorporation of a Special Purpose Vehicle to be known as “Angelis & Co” and was for the amount of $3.75 million, conditional on acceptance and final negotiation with Suncorp on a settlement. The second was dated 3 April 2019 with Wal’s Pharmacy Pty Ltd as borrower but this time for the amount of $2.875 million and with the same condition, together with payment of Metrofin’s legal fees of $11,000. As referred to above, the latter document had been signed by Angelo and witnessed by George on 3 April 2019. Angelo conceded in cross-examination that he would have understood at the time that there had been no settlement with Suncorp. He maintained, however, that whilst sitting in Counsel’s Chambers at the time the Supreme Court Proceedings commenced, Mr Konstantinidis told Counsel that “we have the funds from Yorkdale, our Melbourne financiers”. Angelo had not given evidence to this effect in his affidavit.

89 Angelo’s evidence nevertheless aligned, in part, with that of Mr Konstantinidis who, in cross-examination, said that he had spoken by telephone with George on the morning of 5 April; discussed the lack of funds from Metrofin and that the only way to stop the sale of the Pharmacy Business was to borrow money from “[Mr Karamihas]’s clients or the syndicate, and to pay the money into court”; that this was based on the advice of the barristers; they discussed terms “just before” the money was put into court which discussion included George offering 15% interest because he is alleged to have said, “Simon, I’m paying 18% with Suncorp”. Mr Konstantinidis said that this arrangement was yet a further variation to the 8 March 2019 Variation of Offer shortly before the payment was made into the Supreme Court on 5 April 2019. Mr Konstantinidis was challenged on this evidence. As was the case with Angelo, there had been no reference in his affidavits to any conversations with members of the Angelis Family on 4 or 5 April 2019.

90 Although CP did not press for a finding as to the rate of interest to be charged pursuant to the Alleged Agreement, had I been invited to make such a finding, I would have found it more likely than not that the conversation referred to by Mr Konstantinidis did take place and that a rate of interest of 15% was agreed. In circumstances where George, over at least two decades, has been accustomed to borrowing large sums of money and has been required to pay interest on all those loans, I do not accept that there was no conversation at this critical time about what rate of interest would be charged by the Angelis Family’s “saviour” of the Pharmacy Business.  Further, the figure of 15% is consistent with the interest rate to be paid to each member of the syndicate that loaned money to CP. In the circumstances where Mr Konstantinidis has sworn, and there is a contemporaneous document confirming, that he was confident George and Angelo could save their business and “that is why [he] is backing them with [his] accountants clients’ monies”, it is not implausible that the respective interest rates would match.

91 Mr Theodoropoulos also gave evidence as to the events of the morning of 4 April 2019. In evidence in chief, he said that he and Angelo attended the Chambers of Junior Counsel and that the affidavit was prepared by Junior Counsel in the presence of him and Angelo. Mr Theodoropoulos said it was possible that Junior Counsel had commenced preparation of the affidavit prior to the conference and he remembered Counsel asking questions of Angelo during the conference. He also recalled a number of telephone calls to Mr Konstantinidis seeking information for the affidavit.

92 George contended that Mr Theodoropoulos’ evidence that he and Angelo attended on Chambers at “around 8 or 9am for the purpose of preparing the affidavit” and “the conference went for some hours” must be mistaken.  The NSW Online Registry indicates that orders were made by Lindsay J on 4 April 2019 at 9.30am, inter alia, granting leave to file the summons dated 4 April 2019 and the affidavit of Angelo Angelis sworn 4 April 2019 together with exhibit “AA-1” to that affidavit. No evidence was led as to how the NSW Online Registry records the precise time when orders are made. Mr Theodoropoulos’ recollection in cross-examination that “we approached Lindsay J in the – I would say, shortly after 12 noon” may have confused the listing on 8 April 2019 at 12 noon. Nevertheless, in cross-examination, Mr Theodoropoulos maintained his position in chief that he observed Angelo going through the document page by page before signing it, albeit in a couple of minutes.

93 Justice Lindsay granted the injunction, to be returnable on 11 April 2019 or on further order, on condition that the plaintiffs pay into Court a sum of not less than $3.8 million by no later than 4.00pm on 5 April 2019. That was done.

94 Angelo also denied any recollection of the Statement of Claim filed in the Supreme Court Proceedings in which the allegations relating to CP’s role in the refinancing, as arranged by E. Karamihas & Co, were made. He claimed not to have heard of CP until the proceedings in this Court were commenced. He persisted in this claim despite having purportedly signed an affidavit verifying the Statement of Claim in the presence of a Justice of the Peace, to which he admitted, having said on oath that he believed “that the allegations of fact in the statement of claim are true”.

95 The Statement of Claim filed in the Supreme Court Proceedings on 10 April 2019 pleaded inter alia:

Refinance of Pharmacy Business and Warilla Property

[26]    On around 3 April 2019, the first plaintiff [Angelo] and Hervie entered into an agreement with CP Pty Ltd (Pharmacy Refinance Agreement), being a finance accommodation arranged by E Karamihas & Co Accountants.

[27]    Under the Pharmacy Refinance Agreement:

a.     the first plaintiff agreed to give CP Pty Ltd security over the Pharmacy Business to be registered with Personal Property Securities Register (“PPSR”);

b.    Hervie agreed to give the CP Pty Ltd a registered mortgage over the Warilla Property;

c.    the sum of $3.8 million would be advanced to the first plaintiff [Angelo] and Hervie.

[28]    On 4 April 2019, the sum of $3.8 million was advanced to the first plaintiff and Hervie, by way of payment to the plaintiffs’ solicitor’s trust account.

96 The details in [26]-[27] of the Statement of Claim were largely consistent with the 13 December 2018 Offer. The offer of $3.8 million in the 13 December 2018 Offer, which had been reduced to $3.5 million in the 8 March 2019 Variation of Offer, had been reinstated. A letter on the letterhead of CP to Konstan Lawyers dated 4 April 2019 and signed by Mr Karamihas confirmed that $3.8 million sourced “from various investors” had been received by Konstan Lawyers in trust and directed it to be paid out to the Supreme Court in accordance with the orders made on that date.

97 George also persistently denied that he had been involved in the Supreme Court Proceedings or had commented on documents relevant to the Court case. The documents tell a different story. It is clear that George assisted with the preparation of the Statement of Claim. His disingenuous rhetorical question to Senior Counsel for CP, “But why would I comment – why would I do that if it’s not my statement of claim?”, did not enhance his credibility. The evidence demonstrated that George had been provided with a draft by Mr Theodropoulos on 8 April 2019 at 7.05pm and was requested to “fill out the blanks in the green highlights”. George was told in the same email that Mr Konstantinidis would “complete the information relating to the Pharmacy re-finance and Birchgrove re-finance”. Mr Theodoropoulos’ evidence was that the first draft of the Statement of Claim had been prepared by Counsel. He recalled there being two or three drafts before it was ready to be filed. George returned the completed parts of the Statement of Claim to Mr Theodoropoulos at 11.43pm that same evening.

98 As to the information relating to the Pharmacy Business refinance and the Birchgrove Property refinance, the draft Statement of Claim sent to George on 8 April 2019 was in the following terms, where the words in square brackets were highlighted for George’s consideration:

Auction and refinance of Birchgrove Property

[23]     On 3 April 2019, Metrofin Partners Pty Ltd (as lender) (Metrofin) and Wal’s Pharmacy Pty Ltd entered into an agreement (Birchgrove Refinance Agreement).

[24]     Under the Birchgrove Refinance Agreement:

a.     the first plaintiff and Vicky Angelis agreed to give to Metrofin a first mortgage over the Birchgrove Property;

b.     Metrofin agreed to lend the sum of $2,875,000 to Wal’s Pharmacy Pty Ltd;

c.     the sum $2,504,000 would be made available to Wal’s Pharmacy Pty Ltd.

[25]    On 6 April 2019:

a.     the Birchgrove Property was auctioned by public auction;

b.     the Birchgrove Property was passed in;

c.     the auctioneer stated that the defendants would continue negotiating with a prospective purchaser. [Confirm this. Can we say “the auctioneer stated to the plaintiffs’ solicitor …?” If so, let’s say that]

Refinance of Pharmacy Business and Warilla Property

[26]    On around 3 April 2019, the first plaintiff and Hervie entered into an agreement with [insert name of lenders] (Pharmacy Refinance Agreement).

[27]     Under the Pharmacy Refinance Agreement:

a.     the first plaintiff agreed to give the [name of lenders] a [insert description of security, eg fixed and floating charge over the Pharmacy Business];

b.     Hervie agreed to give the [name of lenders] a first registered mortgage over the Warilla Property; [confirm]

c.     the sum of $3.8 million would be advanced to the first plaintiff and Hervie.

99 It was patently clear from the draft Statement of Claim that the proposal at this stage involved Metrofin providing refinance only in relation to the Birchgrove Property and that another source of refinancing was being provided by other “lenders” in relation to the Pharmacy Business and the Warilla Property. It was also patently clear that some type of security would be given over the Pharmacy Business, and that it had been agreed that the lenders would have a first registered mortgage over the Warilla Property.

100 Mr Theodoropoulos recalled that after George had sent the particulars necessary to complete the Statement of Claim, he had a telephone conversation with Angelo about the mechanics of swearing the affidavit verifying the Statement of Claim. Angelo indicated he would prefer to have it witnessed by a Justice of the Peace rather than come to Sydney to have it witnessed by Mr Theodoropoulos. He said that in the telephone conversation, he told Angelo “to read the statement of claim carefully and make sure that all the facts in [the] document were correct before signing an affidavit saying they are true”. He nevertheless conceded in cross-examination that he did not explain any aspect of the Statement of Claim to Angelo, nor did he take any step to verify that Angelo actually read or understood the document.

101 When the matter came back before Kunc J on 11 April 2019, his Honour extended the injunction conditional upon the plaintiffs paying an additional $3 million into Court forthwith. That too was done.

102 There was no challenge to Mr Konstantinidis’ evidence that the $3 million was sourced from Mr Minas Souris of M&J Chickens. George’s evidence was that he did not know where the $3 million came from. He said in cross-examination, “I wasn’t there, so I don’t know”. Mr Konstantinidis said that he told George he had a friend who would be able to provide the funds under “the umbrella” of the loan from “Emmanuel [Karamihas]’s people”. His evidence was that, “George agreed, he said he really appreciated it and hoped the judge would stop the sale of the pharmacy”. George denied having any recollection of such a conversation.

103 George did however agree that throughout the Supreme Court Proceedings, he was kept abreast of the events through communications he was having with Angelo and Mr Konstantinidis and that he was aware, on 11 April 2019, that an extra $3 million would need to be sourced overnight to avoid the Receivers selling the Pharmacy. Given the importance to George of saving the Pharmacy Business and the Birchgrove Property, I find it implausible that he did not have a conversation with Mr Konstantinidis on 11 April 2019 about the identity of the source of the additional $3 million. I prefer the evidence of Mr Konstantinidis.

104 In cross-examination, Angelo withdrew the paragraphs of his affidavit in which he had asserted that he recalled signing two “Yorkdale loans”, one for $2,875,000 and one for $3,000,000 on the same day at “some point before the Court proceedings” at a meeting with Mr Callegher and Mr Konstantinidis in the latter’s office. Angelo was, however, in Court when the $3 million cheque was presented to the Supreme Court on 12 April 2019. He denied any recollection of having been told by Mr Konstantinidis that the cheque had come from his friend, Mr Souris of M&J Chickens. Although Angelo said his “understanding was that all the money was coming from Yorkdale”, his evidence gradually dissembled to the point where all he could really say was that “that’s what would have been said.” It was apparent he either had no genuine recollection of the conversations that took place about the source of the $3 million, or was not prepared to admit to the content of what he did in fact remember. The latter inference appears more probable.

105 Mr Konstantinidis’ evidence was that Angelo was present in his office when Mr Souris arrived with a bank cheque before Mr Souris left on his Harley Davidson motorbike to take the $3 million cheque to Court. That is a detail one is likely to remember. In the face of Angelo’s admission that he was in Court when the $3 million was paid into Court, it is highly improbable that Angelo was not told who had provided the funds.

106 On 12 April 2019, Kunc J ordered that the sum of $6,583,359.30 be paid out of Court to Suncorp, and the balance to Konstan Lawyer’s trust account. His Honour continued the injunction restraining the sale of the Pharmacy Business and the Warilla Property until further order and noted the undertaking given by Suncorp to Angelo and Hervie, “subject to the receipt of the monies in order 1 [$6,583,359.30], to provide transfers of the existing securities at the direction of [Angelo and Hervie]”.

107 I do not accept that, at least at the time when the Supreme Court Proceedings were commenced, George and Angelo did not appreciate the nature of the refinancing arrangements as described in paragraphs [26]-[27] of the Statement of Claim filed in the Supreme Court Proceedings. Indeed, on 2 April 2019, Angelo had himself signed a Deed of Loan with Maldemo Pty Ltd, one of Mr Konstantanidis’ private clients. Angelo denied any knowledge of such an agreement. This was one of the documents which he suggested might not in fact have been signed by him.

108 I find that George and Angelo must have known at the time when the first tranche of $3.8 million was paid into the Supreme Court that the source of the funds was as described in Angelo’s supporting affidavit at [51]-[52] (extracted above) and that this constituted acceptance of the terms of the 8 March 2019 Variation of Offer with principal loan sum reverting to the initial 13 December 2018 Offer of $3.8 million. I find that George and Angelo also knew that the additional $3 million was sourced from private funds arranged by Mr Konstntinidis, and not from Yorkdale. That those funds were channelled through another entity, CP, was a matter of supreme indifference to George and Angelo, and indeed Vicki and Hariclia. The Angelis Family was desperate to save the Pharmacy Business and the Birchgrove Property. They had been trying to refinance since December 2017. George had approached Mr Callegher at about that time. He and Mr Kotselas had asked Mr Konstantinidis for assistance in October 2018. The documents show that George had also approached a company called Pacific8 in October 2018. Hariclia had, separately, approached Mr Callegher and Platinum Mortgage Management in December 2018.

109 The legal identity of the lender did not ultimately matter to the Angelis Family. They knew that, whatever the name of the lender, it was lending the funds accumulated through the “syndicate” put together by Mr Konstantinidis and Mr Karamihas. In any event, based on the documents filed in the Supreme Court Proceedings, I find that George and Angelo knew the lender was CP.

110 It was also a matter of indifference to the Angelis Family as to which of George or Angelo in fact owned the Pharmacy Business. Although one of the original strategies was to obtain finance sufficient to permit Angelo to purchase the business from the Receivers, that was only because George was bankrupt. When that strategy failed and it became clear that the Pharmacy Business could continue to operate under George’s licence even though he was bankrupt, the need for Angelo to become the owner/licencee dissipated. It was a term of the Alleged Agreement that there would be a GSA over the Pharmacy Business. There is no evidence that anything has displaced that term.

111 Consequently, at the time when $6.8 million had been paid into the Supreme Court (comprised of $3.8 million from the Trust Account of Konstan Lawyers and $3 million by way of a bank cheque from Mr Souris) for the purpose of discharging the Suncorp debt of $6,583,359.30 owed by the Angelis Family, an agreement had been reached between the Angelis Family and CP.

112 It was clear that George and Angelo spoke for the entire Angelis Family, and Hervie, in agreeing the terms of the loan with CP. Hariclia was available (and sitting in Court) should she have wished to give evidence. I infer that any evidence she might have given would not have assisted the Angelis Family. Similarly, no reason was given for Vicki’s failure to give evidence, other than that she was overseas. I infer also that any evidence Vicki might have given would not have assisted the Angelis Family: Jones v Dunkel [1959] HCA 8; 101 CLR 298.

113 I find that the essential terms of the loan agreement were:

(a) the lender was CP;

(b) the borrowers were the Angelis Family and Hervie;

(c) the loan amount was $3.8 million;

(d) the security was a first registered mortgage over the Warilla Property, a first registered mortgage over the Birchgrove Property and a GSA to be registered on the PPSR over the Pharmacy Business.

114 Absent agreement on the interest rate or the term of the loan, I would characterise the agreement reached as falling within the fourth Masters v Cameron class (Masters v Cameron [1954] HCA 72; 91 CLR 353), being that where the “parties were content to be bound immediately and exclusively by the terms which they agreed upon whilst expecting to make a further contract in substitution for the first contract, containing, by consent, additional terms”: Sinclair, Scott & Co Ltd v Naughton [1929] HCA 34; 43 CLR 310 at 317 per Knox CJ, Rich and Dixon JJ. Modern recognition of the fourth class appears to have commenced McLelland J’s citation of those dicta in Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd (1986) 40 NSWLR 622, which was upheld on appeal (GR Securities Pty Ltd v Baulkham Hills Private Hospital Pty Ltd (1986) 40 NSWLR 631): and see Dyson Heydon, Australian Law of Contract (Thomson Reuters, 2022) at [3.110] and [3.170]. More recently, in Cacace v Bayside Operations Pty Ltd [2006] NSWSC 572 at [20], Brereton J said, “It is plainly consistent with an agreement within class four that the parties will negotiate for additional terms or different terms in substitution for the existing terms, while remaining bound in the meantime by the preliminary agreement.”

115 A series of “Deed[s] of Loan and Acknowledgement” were signed in June 2020 acknowledging and agreeing that the Lender[s] (being the “Syndicate” of private clients: George and Helen Scarlis, Askote & Co Pty Ltd, Mr Souris, Mr Theodoropoulos, Madeleine Konstantinidis, Konstan Lawyers, and Mr Konstantinidis) had advanced certain sums to the Borrower, CP, at the request of the Guarantor, Mr Konstantinidis, for the purpose of assisting the Angelis Family to refinance the debt owed to Suncorp by the Angelis Family. This series of Deeds was in addition to that signed between Maldemo and Angelo on 2 April 2019.

Post the Supreme Court Proceedings

116 Mr Konstantinidis deposed that negotiations for finance from Metrofin/Yorkdale continued after the conclusion of the Supreme Court Proceedings.

117 On 18 April 2019, the solicitors for the Receivers wrote to Mr Konstantinidis requesting written directions as to the proposed transferee for each security and, where a security was registered on the PPSR, the Secured Party Group number of the proposed transferee of the PPSR registrations. After a further email from the solicitors for the Receivers on 23 April 2019, Mr Konstantinidis informed those solicitors that his instructions were that the client would be proceeding “by way of Transfers of all Suncorp Securities” and indicating his expectation that he would supply all details by close of business on 27 April 2019 or 30 April 2019.

118 Mr Konstantinidis provided the following directions on 29 April 2019:

1. Assignment of the entire Suncorp debt approximately $6.58 million and Transfer of Mortgage number AH17252 over Lot 2 in DP 1003070 known as 51 Louisa Road, Birchgrove is to be transferred to Yorkdale Capital Pty Ltd ACN 625 371 057.

2. Transfer of registered Mortgage Number AI304979 over Lots 6 and 7 in DP 23454 known as 3-5 George Street Warilla NSW 2528 is to be transferred to CP Pty Ltd ACN 168 660 704;

3. Transfer of registered Mortgage number AI304981 over the registered Lease numbered AI304980 over leasehold interest in 3-5 George Street Warilla to be transferred to CP Pty Ltd ACN 168 660 704.

4. General Security Agreement given by George Angelis granted on 14 October 2013 and registered PPSR Security numbers 201310250081540 and 2013102500811529 and General Security Agreement given by Hervie Pty Ltd ACN 073 661 177 granted on 14 October 2013 and registered PPSR Security number 201310250081538 to CP Pty Ltd ACN 168 660 704.

(Emphasis in original.)

119 Those directions were incorporated in the draft Deed of Transfer and Settlement sent by the solicitors for the Receivers to Mr Konstantinidis on 2 May 2019. Mr Konstantinidis in turn sent the documents that same day to George and Angelo under the subject line, “Information needed for transfer of securities”.

120 The Deed of Transfer was in terms by which Angelo and Hervie directed Suncorp to transfer the mortgage over the Birchgrove Property to Yorkdale and the balance of the Securities, which were defined to include two registered mortgages over the Warilla Property and the GSA given by George on or about 14 October 2013 and the GSA given by Hervie on or about 14 October 2013, to CP. The PPSR registrations of the two GSAs were also to be transferred to CP, it being the holder of the Secured Party Group number 102 837 312 the subject of the Deed. This was consistent with the Orders of Kunc J, which noted the undertaking by Suncorp to provide transfers of the existing securities at the direction of Angelo and Hervie. Accompanying the Deed of Transfer and Settlement were Deed Polls of Transfer in respect of each security.

121 George and Angelo deny that they ever gave instructions in relation to the transfer of the securities. They denied even having seen the letter of 29 April 2019 before the commencement of these proceedings, despite its being sent to them on 2 May 2019. Mr Konstantinidis says that he had “extensive discussions” with George and even sought Senior Counsel’s advice about the Deed of Transfer and Settlement. He said George refused to sign the document because he did not want to release Suncorp; “he wanted to pursue Suncorp for overcharging”. An email from Mr Konstantinidis dated 2 May 2019 to Mr Faulkner SC sent at 6.39pm (copied to George and Angelo) is at least some evidence corroborative of Mr Konstantinidis’ evidence. Indeed, Mr Konstantinidis wrote to the solicitor for the Receivers on 3 May 2019 stating, “our client’s (sic) will not be executing the deed”. It is not likely that Mr Konstantinidis wrote in those terms without having been told as much by George and Angelo, which is evidence that they had in fact read the documents. The contention sought to be maintained throughout the trial that George and Angelo knew nothing about the transfer of the securities until the commencement of this proceedings simply cannot be maintained in the face of the evidence that George had sought advice from different lawyers about pursuing potential claims against Suncorp as early as 24 May 2019.

122 I find that it must have been understood by George and Angelo that the monies paid into Court were loans that required security. So much must have been obvious to them from the 13 December 2018 Offer, the 8 March 2019 Variation of Offer and the April 2019 Metrofin Offer, not to mention their borrowing history. The proposition that George and Angelo envisaged “mutual releases” which would, in effect, have given them $6.583 million of unsecured finance, which understanding was somehow scuttled by Mr Konstantinidis, is fanciful.

123 Also in May 2019, a Deed of Priority was entered into between Yorkdale as First Mortgagee of the Birchgrove Property for its loan of $2,812,500, CP as Equitable Mortgagee of the Birchgrove Property for its loan of $3.8 million, Angelo as First Mortgagor and Vicki as Second Mortgagor. The recitals to the Deed recorded, consistently with the undertaking given to the Supreme Court of New South Wales, that Suncorp had agreed to provide a transfer of Mortgage in the name of Yorkdale notwithstanding CP’s equitable interest in the Mortgage. That document was signed by Angelo on his own behalf and on behalf of Vicki pursuant to a Power of Attorney apparently held by Angelo. It was witnessed by a solicitor whose address is the same as that of Konstan Lawyers. Angelo’s signature is on the same page and immediately underneath the signature of Mr Karamihas, who signed on behalf of CP as Equitable Mortgagee.

124 Despite this, Angelo maintained that he had still not heard of CP until the commencement of these proceedings. He asserted that he would not have looked at anything other than where he was asked to sign and that the document was never explained to him. He said, “Documents were put in front of me by [Mr Konstantinidis] … [who] told me to sign them.” I disbelieve Angelo’s evidence on this point, as I have already found.

125 The Receivers retired effective from 3 May 2019. Consequent upon an inquiry from the Pharmacy Council of New South Wales, on 31 May 2019, the solicitors for the then-retired Receivers forwarded the Pharmacy Council’s request for the contact details of CP to Mr Konstantinidis, who in turn forwarded the email to Angelo and George.

126 Finance from Yorkdale was ultimately paid into Mr Konstaninidis’ Trust Account on 11 June 2019. An email sent from Mr Callegher to Mr Konstantinidis (copied to George) on 14 August 2019 records the gross loan as $2,902,500, with $90,000 not being charged interest. The loan being charged interest was therefore $2,812,500.

127 The Deed of Priority was subsequently amended to reflect an increase in the priority amount of Yorkdale to $2,902,500. Angelo executed the Deed of Variation, again on his own behalf and on behalf of Vicki pursuant to a Power of Attorney, in accordance with directions sent by Mr Konstantinidis to Angelo (copied to George) on 1 August 2019. The email said:

This is a Deed of Priority which gives right to Albert Gallegher to get the balance of his $90,000 on settlement of Birchgrove in priority to CP Pty Ltd, which are the private financiers (arranged by me) and who have financed the balance of the Pharmacy debt.

128 Angelo denied any recollection or understanding of the document. He persisted with his assertion that Mr Konstantinidis “made me sign documents. I just signed them. He made me sign them”. This notwithstanding that the Deed of Variation was apparently not signed in the offices of Konstan Lawyers but elsewhere, witnessed by a Justice of the Peace. There was no evidence that Angelo sought clarification of the explanation for the Deed of Variation already given to him by Mr Konstantinidis.

129 Mr Konstantinidis’ evidence was that it had been agreed that George would send him the weekly report of the sales figures of the Pharmacy Business so as to report on its financial progress. This arrangement appears to have commenced on 19 May 2019. Mr Konstantinidis said that he received 197 such reports between May 2019 and June 2023. Neither Angelo nor George denied sending the reports to Mr Konstantinidis.

130 Mr Konstantinidis deposed that on or around 11 June 2019, Konstan Lawyers received $2,438,968.74 into its trust account from Yorkdale. The cheque direction signed by Angelo for that amount was in evidence. Mr Konstantinidis deposed to speaking with Mr Souris at about that time to inform him that there would not be enough to repay his $3 million but that he would “pay down $2,000,000 now (plus interest) and a further $1,000,000 when the Pharmacy Property was sold”. From October 2019 to October 2021, Angelo and George caused payments to be made out of the Pharmacy Business Account to Mr Konstantinidis. Mr Konstantinidis said that repayments of the loan were received into the trust account of Konstan Lawyers, which was managed by Mr Karamihas. George said that he thought these payments were referable to a “shortfall” from Yorkdale but did not explain how it was said that such a shortfall arose, nor why repayments would then flow to Mr Konstantinidis’ Trust Account.

131 In July 2019, CP exercised its mortgagee power of sale over the Warilla Property, which was transferred to Pharm Holdings Pty Ltd (Mr Konstantinidis’ superannuation fund) for $1.15 million.

132 Several contemporaneous file notes taken by Mr Karamihas showed that throughout the latter part of 2019 and up to 2021, George attended meetings with his accountant, Mr Kotselos, Mr Konstantinidis and Mr Karamihas in which CP’s interest in the Pharmacy Business and the loan from CP was discussed.

133 One of the matters that remained under discussion was who in fact owned the Pharmacy Business, George or Angelo? As became clear, despite one of the options for saving the Pharmacy Business that had been discussed in early 2019 being for funds to be obtained to permit Angelo to buy the business from the Receivers, that never occurred. The licence granted by the Receivers to George to continue to run the business remained with him. Attempts by Angelo to have the Pharmacy Business transferred to him failed.  There was, in the end, no doubt that George owned the licence for the Pharmacy Business, which he licensed to Angelo during George’s bankruptcy. A record of a meeting on 20 May 2020 between Mr Konstantinidis, Mr Kotselas, George, Mr Karamihas and Mr Sam Kontogiorgis (of Archangel Wealth, an accounting practice run by Mr Kotselas) notes that Mr Konstantinidis was responsible for ensuring that there was appropriate documentation permitting the Pharmacy Business to trade under George’s licence.

134 It was uncontroversial that Mr Konstantinidis continued to advance monies to the Angelis Family throughout 2020-2021. On 12 February 2020, George requested $100,000 for working capital and stock for the Pharmacy Business. In around December 2020, George requested $20,000 to purchase a delivery vehicle and on or around 31 May 2021, $40,000 for a Webster Packing Machine. These are all recorded in emails. George did not deny making such requests.

135 On 7 December 2020, George wrote to Mr Konstantinidis (copying Angelo and Mr Kotselas) informing him that “Theo Kotselas is finalising the approval of the loan from Judo Bank of $2.5 million to be paid to you, as we received the valuation last week”. In cross-examination, George denied that this correspondence was referrable to any outstanding obligation to repay monies to Mr Konstantinidis. It is, however, only consistent with a recognition that there was an outstanding obligation to repay Mr Konstantinidis, or at least the entities associate with him, the monies that had been advanced by CP in order to discharge the Suncorp debt.

136 Further, when told by Mr Kotselas on 31 May 2022 that CP would act on its registered charge over the Pharmacy Business “due to default on loan repayments and rent”, George did not question the existence or legitimacy of the charge; he merely requested further information about what other “options there are for financing with Judo bank or other banks”.

137 By May 2020, the Angelis Family had apparently formed the opinion that legal action against Suncorp ought to be considered. George and Vicki were, however, advised on 23 May 2020 by Mr Kontogiorgis that the forensic work he had already undertaken indicated there were poor prospects of pursuing either Suncorp or the liquidators.

138 The repayments to Mr Konstantinidis stopped in November 2021. George said this was because “it became clear to us that something suspicious had gone on and it all didn’t add up”. For this reason, Counsel for the George invited the Court to reject Mr Konstantinidis’ evidence entirely on the basis that there was a “more sinister view of the world” in which nothing was recorded in writing “for a very deliberate reason”, namely that such a strategy would allow Mr Konstantinidis to take additional security to ensure he was covered for the API loan. Although Mr Konstantinidis’ approach was unorthodox and no doubt open to criticism where he purported to act in his capacity as a legal practitioner, there was no reason, either pleaded or revealed on the evidence, to reject the entirety of his evidence on such a basis.

139 Similarly, attempts to suggest in cross-examination that Mr Konstantinidis had exercised his mortgagee’s power of sale improperly by selling the Warilla Property at an undervalue to his superannuation fund formed no part of the pleaded case and are irrelevant to an issue that does fall to be determined.

Disposition

140 George has not discharged the onus on him to prove that no security interest as registered on the PPSR by CP exists. To the contrary, I am satisfied, for the reasons set out above, that CP has satisfied its evidentiary onus of establishing that it entered into the Alleged Agreement.

141 The amended originating application filed on 29 May 2025 must be dismissed with costs.

Associate:

Dated:    20 May 2026