I have developed 3 units in partnership with a friend. We do…

We Live in Melbourne, Victoria. There is no writen agreement between us, just gentelman verbal agreement, to which both our partners (his de facto wife and my wife are witnesses). According to the advice of my accountant, we have registered a partnership with Australian Taxation Office and have obtained ABN number for this purpose. We did have own jointly a block of land with old house on it. (my friend and I, 50% share each, for number of years). According to that agreement, each of us had to come up with equal amount of private funds, and the reminder was suposed to be funded with jointly obtained bank business loan, with attached cheque book for either of us to sign. Whole project suposed to cost up to $ 450 000, and the business loan was for $ 290 000. We had to use our own funds equally first ($ 100 000 each), and after that, use up to $ 250 000 of mentioned business loan, leaving $ 40 000 of that loan to pay the interest, till the sale of one unit with the proceeds of that sale paying of the business bank loan, leaving us with sole ownership of one residential unit for each of us.

Meantime each of us, had to prove to each other our expenses, by exchanging all invoices and making copies of them, so we both have a set of all invoices.

He was a builder, doing carpentry work and supervising subcontractors, I was doing all electrical work, (I am electrician) and overlooking all neccesarry administration work such as dealings with City Council, surveyors etc. The project is nearly finished, I had supplied him with the copies of all my invoices long time ago, proving that I had contributed my equal share of private funds, He suposed to do the same. He was the person paying for materials and labour, so he was basically sole user of business cheque book . He was delaying sharing all his invoices with me using explanation, that not all invoices have been paid yet, that once he complets all paper work, his de facto wife will do the spredshit and orderly put every item on it, then would give me all, to do the copies of his invoices. By now he used fully all $ 290 000 of our business loan and when I requested from the Bank statements,showing who the cheques been writen to, I did find out that he has withdrawn nearly $ 80 000 for his personal reason, writing numer of cheques to himself and his de facto wife. His explanation is, that he was paying a lot of materials by private master card. He recently provided me with spreadshit showing

his expenses (private funds, mixed with business loan funds,-still no invoices) and that spreadshit clearly shows, that nearly $ 81 000 is missing. On top of that he shows, that close to $18000 was spent by paing cash. To top everything up I have learn a week ago, that he holds Domestic Builders Licence, limited to carpentery only, which in Australia means, that he can not build a house on his own, can not enter into domestic building written contract. He paid other builder, to obtain builder's warranty insurance.

I think that is enough detailed information, and would appreciate your advice Mr. Leon Rizos. Have a nice day. Mirek.