Carlos and Jorg have known each other for years through their broadly successful business interests, friendship at university law school and now their recent venture to join a gym together and get fit. While at the gym, Carlos asked Jorg to join him in buying an old boat that he was intending to renovate and sell to the Gold Coast City Council (GCCC) for their celebraKon of "Land and Sea" in 2025. Carlos told Jorg in a break between sets on the lat pull-down and the Nordic Track ellipKcal that he was asking all his friends to join the partnership because the GCCC were going to pay a premium and a friend of his in the GCCC told him this was a sure bet to make "some good coin".
A few weeks later at another gym session, Jorg told Carlos he had $200,000 to give him and was expecKng a return of about 20 per cent. Carlos was delighted and asked Jorg to transfer the money as soon as possible. He also told Jorg that there were some other investors and with all their contribuKons he'd get a good boat. The following day Jorg transferred the money to Carlos. Over the following months Carlos saw Jorg at the gym for their regular sessions. Along with their improving fitness, Carlos sequenKally told Jorg a boat had been purchased, was being renovated at a Coomera boat yard, had some issues with dry rot in the keel, needed some extra work on the old engines and needed an enKrely new wiring and electrical system.
A few months later, and aher Carlos had been consistently missing the gym visits with Jorg, Carlos's accountant rang Jorg to say that Carlos was unlikely to be able to repay his full $200,000 because the project costs had blown out as Carlos had not properly costed the project at the start. What posiKve outcomes could Jorg expect if he brought an acKon against Carlos in equity?