BRENNAN & KAUFLINE (Civil Dispute) - [2013] ACAT 58

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

BRENNAN & KAUFLINE (Civil Dispute) [2013] ACAT 58

Case Number: XD 12/1540
Catchwords: CIVIL DISPUTE – Debt Application – claim for repayment of overpaid interest – whether the Applicant has personal capacity to bring the claim - whether previous Federal Court proceedings could operate as estoppel – res judicata and issue estoppel – counterclaim and the operation of limitation period

List of Legislation: ACT Civil and Administrative Tribunal Act 2008 (ACT) ss 48 and 56
Domestic Relationships Act 1994, s 15
Limitation Act 1985, ss 11 and 32

List of Regulations: Court Procedure Rules 2006, Rule 1616
List of Cases: Ferris v Winslade (1998) 22 Fam LR 725
John Anthony Jeans v John Richard Bruce & Ors
[2004] NSWSC 539

Hoysted v Federal Commissioner of Taxation [1921] HCA 56
Levet and Levet & Dalla [2013] ACAT 10

Tribunal: Ms E Symons Presidential Member

Date of Orders: 30 August 2013

Date of Reasons for Decision: 30 August 2013
AUSTRALIAN CAPITAL TERRITORY          )
CIVIL & ADMINISTRATIVE TRIBUNAL     )          XD 12/1540

BETWEEN:
ROBERT BRENNAN
Applicant

AND:

WAYNE KAUFLINE

Respondent

TRIBUNAL: Ms E Symons Presiding Member

DATE: 30 August 2013

ORDER

The Tribunal Orders that:

Judgment is entered for the Applicant in the sum of $3,055.29 plus filing fee of $127.00 and interest on $3,055.29 from 13 February 2008 in the sum of $1,434.07.
The Respondent is to pay the judgment monies of $ 4,616.36 to the Applicant by close of business 12 September 2013.
The Respondent’s Counterclaim is dismissed.
………………………………..
Ms E Symons

Presidential Member

REASONS FOR DECISION

Mr Brennan filed a Debt Application dated ‘5/3/12’ on 10 October 2012 in which he sought from the Respondent, Mr Wayne Kaufline, “repayment of overpaid interest on a purported debt”. The amount of the debt claimed was $3,556.04. Mr Brennan also sought interest from 13 February 2008.
On 14 December 2012, default judgment in the sum of $4,527.60 was entered against the Respondent.
Mr Kaufline appointed Ms Glenys McGuire, as his attorney[1] and as his representative for these proceedings. On 15 January 2013 Ms McGuire applied to set aside the Default Judgment pursuant to section 56 of the ACT Civil and Administrative Tribunal Act 2008 (“the ACAT Act”). By order dated 13 February 2013, the Default Judgment was set aside. The matter was listed for hearing and directions were made. The Respondent was ordered to file a Response in 7 days; all parties were ordered to file any witness statements two weeks before the hearing and leave was granted for all parties to issue subpoenas no later than 27 March 2013.
[1] Power of Attorney dated 11 January 2013, Registration Number 7 of 2013.
Ms McGuire lodged a Response and a Counterclaim for $6,474.00 plus interest on 20 February 2013.
On 13 March 2013, Mr Brennan lodged a list of 19 exhibits he would be relying on at the hearing. On 28 March 2013, Ms McGuire lodged a list of the documentation she would be relying on at the hearing which included an Affidavit of the Respondent, Mr Kaufline affirmed 26 March 2013; Orders from the Federal Court of Australia dated 21 December 2010 in proceedings NSD 1147 of 2010 between Robert George Brennan (Applicant) and Glenys Freya McGuire (Respondent); Reasons for Judgment in those proceedings; the Plaintiff’s (Mr Brennan’s) Outline of Case dated 25 November 2010 and his Financial Statement dated 23 November 2010 in those proceedings.
The Application and the Counterclaim were heard on 10 April 2013. Mr Brennan represented himself and Ms McGuire represented Mr Kaufline pursuant to the Power of Attorney. The hearing was adjourned part heard to 9 May 2013.
On 9 May 2013, the Tribunal made the following orders:
1.       By close of business 23 May 2013 the respondent is to lodge written submissions in relation to the application and the counterclaim.
2.       By close of business 11 June 2013 the applicant is to lodge written submissions in response to the respondent’s submissions.
3.       Decision Reserved.
On 22 May 2013, by email, Ms McGuire sought an extension of time in which to lodge the Respondent’s submissions. The Tribunal refused Ms McGuire’s request.
Ms McGuire subsequently lodged a bundle of documents on 3 June 2013. On 4 June 2013, she lodged the Respondent’s Submission and further documents. The Tribunal has not considered the documents lodged by Ms McGuire after her request for an extension of time was refused.
In lieu of his Submission due on 11 June 2013, Mr Brennan lodged an Application for Interim or Other Orders on 11 June 2013 seeking the following orders:
1.       The Respondent’s application to set aside the Default Judgment is overturned and dismissed.
2.       The default judgment in favour of the Applicant in the amount of $4527.60, made on 14 December 2012 is reinstated.
3.       The additional costs of attempted service $165 and subpoenas $37 be awarded to the Applicant.
4.       Ms Glenys McGuire is declared a vexatious litigant.

Background

Ms McGuire is Mr Kaufline’s sister and the former domestic partner of the Applicant, Mr Brennan. Mr Brennan and Ms McGuire were the Directors of Rob Brennan Facilitation and Training Services Pty Limited (‘the company’). In February 1997, they set up their superannuation fund and the company was the trustee of that fund. In August 2004, Mr Brennan and Ms McGuire agreed that her brother, Mr Kaufline, should join the superannuation fund and he was appointed director of the company in August 2004.
Mr Brennan and Mr Kaufline executed a Deed of Agreement (‘the Deed’) dated 15 May 2006 which was prepared by Ms McGuire. Ms McGuire witnessed both Mr Brennan’s signature and Mr Kaufline’s signature. The Administrator named in the Definition section of the Deed is Ms McGuire.
The Deed provided that:-
·Mr Kaufline loan (‘the loan’) Mr Brennan $49,400 for a period of 1 year and that interest be calculated at the rate of 5% per annum or such other rate aligned with the CPI, as is notified in writing by the Administrator to Mr Brennan from time to time.
·Mr Brennan will prepay interest on the principal on an annual basis by cheque or in such other manner as is specified by the Administrator in the Administrator’s absolute discretion.
Mr Kaufline loaned $49,400 to Mr Brennan.
On 6 June 2006, Ms McGuire paid interest to Mr Kaufline of $2,467.40 by cheque drawn from R.G Brennan’s account. Ms McGuire managed the finances in her domestic relationship with Mr Brennan. Mr Brennan was unaware of this payment.
Mr Brennan and Ms McGuire separated on 6 December 2006.
Mr Brennan repaid the loan to Mr Kaufline on 19 June 2007. On the advice of his solicitor that the loan should be treated as part of the domestic relationship property settlement between him and Ms McGuire, Mr Brennan then stopped the cheque to Mr Kaufline.
In a letter dated 22 July 2007, to Mr Brennan, Ms McGuire’s son, Mr Ben McGuire, stated: “Firstly, I would like to reiterate that I act for Wayne Kaufline in respect of recovery of his loan to you.”
On 3 August 2007, Mr Brennan repaid Mr Kaufline $49,400 and interest of $3,556.04 which he calculated at 5.9% (not 5%) for 445 days.
Mr Brennan later became aware of the interest payment of $2,467.40 made by Ms McGuire on 6 June 2006. On 13 August 2007, Mr Brennan sent a letter of demand to Mr Kaufline seeking reimbursement of $3,556.04 and interest of $122.85.
By letter dated 14 March 2008 to Mr Brennan’s solicitor, Mr Kaufline stated:
“Your client voluntarily calculated his repayment of interest on an outstanding loan to me. The amount he paid was not the amount requested in a letter from Ben McGuire to your client dated 22 July 2007. Your client has clearly decided to make his own calculations of the interest payable rather than pay the interest as determined in accordance with the loan agreement under which that interest was repayable. Those calculations appear to have yielded a sum greater than what was provided for under the loan agreement. To overpay on that basis is clearly your client’s prerogative, but it is not a decision for which I am accountable.
…..
In light of the time, expense and trouble to which your client’s approach to the repayment of his debts has put me, I do not propose the return of any funds.

In advising your client as to the actions he may wish to take, please be aware that your client owes considerable sums to me for services rendered. These sums include:
· For Services Rendered to your client’s yacht $1,800
· For Services Rendered to your client’s premises $2,400

I reserve my right to take whatever action I deem necessary to recover such sums.”

On 12 November 2007, Mr Brennan brought proceedings for property orders (“the property proceedings”) under section 15 of the Domestic Relationships Act 1994 (ACT) against Ms McGuire in the ACT Supreme Court. On 17 July 2009, Master Harper ordered that the property proceedings be transferred to the Family Court of Australia.
On 5 September 2008, proceedings were brought in the name of the company by Ms McGuire and Mr Kaufline against Mr Brennan and Ms Deborah Avery[2] which sought to make Mr Brennan liable for his conduct of the company’s affairs to the exclusion of the other two directors, Ms McGuire and Mr Kaufline.[3] The company was placed into voluntary liquidation by agreement of the Directors in the Federal Court of Australia on 11 November 2008.
[2] Rob Brennan Facilitation and Training Services Pty Limited v Robert George Brennan and Deborah Jane Avery (P) NSD 1400/2008
[3] Robert George Brennan and Glenys Freya McGuire, NSD 1147 of 2010, Reasons for
Judgment - Rares J 21 December 2010 at paragraph 6.
On 23 August 2010, the property proceedings were transferred to the Federal Court of Australia because of the inter-relation between the company proceedings and the property proceedings so that Justice Rares could deal with all issues in a single controversy between the parties[4].
[4] Robert George Brennan and Glenys Freya McGuire, NSD 1147 of 2010, Reasons for
Judgment - Rares J 21 December 2010 at paragraph 7.
On 27 October 2010, the following Consent Orders were made by Justice Rares in the company proceedings, noting the Terms of Settlement agreed between the plaintiff and first named defendant on 18 October 2010:
By consent the plaintiff and first defendant, without any admissions of liability, the Court orders that:
·    The first defendant pay the plaintiff the sum of $205,000.00.
·    There be no order as to costs.
·    The sum of $16,270.00 be deducted from the sum payable by the first defendant to the plaintiff in full satisfaction of the first defendant’s costs of winding up the plaintiff.
·   The plaintiff’s claim against the first defendant otherwise be
     dismissed.
Justice Rares delivered Reasons for Judgment on 21 December 2010 in the Federal Court property proceedings.

The Applicant’s Claim

The Applicant’s claim is for Mr Kaufline to repay the second payment of interest of $3,556.04 he was paid by the Applicant. He received the payment of interest twice; first by a cheque drawn by Ms McGuire on Mr Brennan’s personal account in the amount of $2,706.85 on 6 June 2006, and secondly by a payment by Mr Brennan of $3,556.04 on 3 August 2007.

The Respondent’s Response

The Respondent did not deny that he had received the interest payment twice. He relied on his letter to the Applicant’s solicitor referred to in paragraph 21 above as setting out his reason for not repaying the Applicant.
In the Response the Respondent disputed the Applicant’s claim on two grounds: (i) that the Applicant has no capacity to bring the Application on behalf of a deregistered company, and (ii) that the present claim against Mr Kaufline has been litigated in both the company proceedings and the property proceedings in the Federal Court of Australia both of which have been finalized. Accordingly, the claim should be dismissed on the basis of estoppel. The Respondent also stated[5] that the Applicant joined the Respondent as a party in the property proceedings by an application in the Federal Court in December 2011. The property proceedings in the Federal Court concluded on 23 October 2012.

The Applicant’s Response to the Estoppel claim:
[5] Response, paragraph 17

The Applicant opposed the Respondent’s claim of estoppel, submitting that the Liquidator of the Company only admitted in the proof of debts, the principal of the loan ($49,400) from the Respondent as a Company Debt and not the interest he had paid Mr Kaufline. The Liquidator determined that the interest payment was the Applicant’s personal liability.
The Applicant also opposed the Respondent’s claim that he was estopped from bringing the present claim against Mr Kaufline because of the Federal Court property proceedings. The overpayment of the interest payment which is the subject of the Tribunal proceedings was not dealt with in the property proceedings.

The Respondent’s Counter Claim

The Respondent’s Counter Claim sought $6,474 for services rendered to the Applicant for a yacht ($1,800), services rendered to the Applicant’s premises ($2,400); interest ($1,050) and filing fee ($125.)

The Applicant’s Response to the Counterclaim

The Applicant opposed the Counterclaim. He alleged that any services rendered by the Respondent to the yacht were rendered substantially longer than six years ago; he never received an invoice for this work and this claim was statute barred. He also alleged that the claim for work at the premises was likewise statute barred. He has never received an invoice for any such work.

Preliminary Issues

The Tribunal has considered the issue of the capacity in which the Applicant has brought the present tribunal proceedings, the issue of estoppel and the issue of whether the Respondent’s Counterclaim is statute barred as preliminary issues.

Capacity

It is not in dispute that the Applicant, Respondent and Ms McGuire were directors of Rob Brennan Facilitation and Training Services Pty Limited (“the company”) and the company was placed into voluntary liquidation by agreement of the Directors in the Federal Court company proceedings on 11 November 2008.
The Respondent claims that the present proceedings arose out of a formal 2006 loan from him to the Applicant to make a repayment on a company debt for the purchase of a yacht in 2005. The Respondent further claims that the company repaid that loan on 19 June 2007.
However, it is clear from the evidence that the loan was documented as a personal loan between Mr Kaufline and Mr Brennan. There is no reference in the Deed to the purpose of the loan. In cross examination when Ms McGuire put to Mr Brennan that she thought the loan from Mr Kaufline was a company debt as the money was for the boat, Mr Brennan’s answer was “you pushed that it be a personal loan”. It is also clear that the Respondent and Ms McGuire[6] knew that the payment made on 19 June 2007 had been stopped and the loan remained outstanding until 3 August 2007, when Mr Brennan repaid the loan and the interest of $3,556.04 which is the subject of the present proceedings.
[6] Respondent’s Response at Paragraph 21
In his creditor’s claim against the Company in liquidation dated 4 September 2009, Mr Brennan claimed inter alia, as company debt, the repayment of the loan and interest to Mr Kaufline.
At the Tribunal hearing on 10 April 2013, Mr Brennan called evidence from Mr F. Lopilato and Mr M. Herrett, both chartered accountants with RSM Bird Cameron, who were jointly and severally appointed liquidators (“the liquidators”) on 11 November 2008 by the Federal Court in the company proceedings. Mr Brennan also gave evidence.
Mr Brennan provided to the Tribunal a copy of the Proof of Debts (Exhibit A2) in the company’s liquidation. Mr Brennan had included in his Proof of Debt claim the personal loan to him from Mr Kaufline of $49,400, which he had loaned to the company, and the interest component of that loan, $3,556.04.
The liquidators gave evidence that they admitted the loan of $49,400 from Mr Brennan to the company as a company liability as it had been treated as a loan to the company by Mr Brennan but did not admit the interest component as there was no agreement between the company and Mr Brennan that interest was to be charged. The liquidators considered that the interest payment Mr Brennan had made to Mr Kaufline was his personal liability. Mr Brennan said he had unsuccessfully challenged the interest not being included as a company liability by the liquidators.
Mr Brennan brought the present claim against Mr Kaufline as the liquidators had found that the interest payment he had made to Mr Kaufline was not a company liability. It was his personal liability.

Consideration

Having considered the available evidence, the Tribunal is not satisfied that the Applicant is bringing the claim to recover the interest in any corporate capacity. He said he was bringing that claim in the Tribunal on the basis that the liquidators determined it was his personal liability and that the Respondent has received the interest payment twice and refused to repay the overpayment. The Tribunal accepts his evidence.

Conclusion

The Tribunal finds that Mr Brennan has brought these debt proceedings in his personal capacity pursuant to the loan agreement he had with Mr Kaufline.

Estoppel

The Respondent submitted that the subject matter of the current Tribunal application “was subject of and included in” Mr Brennan’s documentation in both the Federal Court company proceedings and the Federal Court property proceedings. Mr Brennan did not dispute that he referred to the loan and the interest payment in various Federal Court documentation.
In the Applicant’s affidavit in the company proceedings [7] dated 16 October 2008 at paragraphs 51, 52, 53 and 54 and in Exhibits RGB19 and RGB 20 to that Affidavit Mr Brennan stated:
“51 The only exception to this [that is referred to in the previous paragraph as the entries in the schedule from 13 September 2006 onwards entitled “personal” are all payments made by me personally out of funds on behalf of the Company to repay the loan in respect of the Boat to my parents] is the entry in the schedule for 3 August 2007. That records a payment made by me to Mr Kaufline. Upon receipt of a demand from Mr Ben McGuire acting for Mr Kaufline, I repaid in full the $49,400 owed to him under the “Deed of Agreement” dated 15 May 2006 referred to above. In addition I paid to him an amount of $3,556.04 in interest. Exhibited hereto and marked “RGB19” (pages 196 to 203) are letters passing between me and Mr Kaufline in relation to this repayment. [words in square brackets added]
52 Following payment of the $49,400 + $3,556.04 in interest, I became aware from reviewing cheque stubs, that Mr Kaufline had already been paid an amount of $2,467.40 on 10 June 2006 by cheque number 777 drawn by Ms McGuire on my personal Account (to which I refer below) in respect of what is described on the cheque butt as: “interest to Wayne on his loan to Rob”. Exhibited hereto and marked “RGB20” (pages 204 and 205) is a copy of the cheque stub dated 6 June 2006.
53. After I discovered this overpayment I had a telephone conversation with Mr Kaufline in which words to the following effect were spoken:
Me: You have been overpaid interest because Glen had already paid you an amount of $2,467. You should repay me the extra interest I paid you.
Kaufline: You can fuck off. If you call me again I will call the police.
54. Since this time I have had no further dealings with Mr Kaufline.”
[7] NSD 1400 of 2008
In his Affidavit dated 2 June 2009 in the property proceedings, the Applicant made similar statements in paragraphs 80, 81 and 82:
“80 The only exception to this [that is referred to in the previous paragraph as the entries in the schedule from 13 September 2006 onwards entitled “personal” are all payments made by me personally out of funds on behalf of the Company to repay the loan in respect of the Boat to my parents] is the entry in the schedule for 3 August 2007. That records a payment made by me to Mr Kaufline. Upon receipt of a demand from Mr Ben McGuire acting for Mr Kaufline, I repaid in full the $49,400 owed to him under the “Deed of Agreement” dated 15 May 2006 referred to above. In addition I paid to him an amount of $3,556.04 in interest. Exhibited hereto and marked “RGB16” (pages 113 to 120) are letters passing between me and Mr Kaufline in relation to this repayment. [words in square brackets added]
81 Following payment of the $49,400 + $3,556.04 in interest, I became aware from reviewing cheque stubs, that Mr Kaufline had already been paid an amount of $2,467.40 on 10 June 2006 by cheque number 777 drawn by Ms McGuire on my personal Account (to which I refer below) in respect of what is described on the cheque butt as: “interest to Wayne on his loan to Rob”. Exhibited hereto and marked “RGB17” (pages 121 and 122) is a copy of the cheque stub dated 6 June 2006.
82. After I discovered this overpayment I had a telephone conversation with Mr Kaufline in which words to the following effect were spoken:
Me: You have been overpaid interest because Glen had already paid you an amount of $2,467. You should repay me the extra interest I paid you.
Kaufline: You can fuck off. If you call me again I will call the police.

83. Since this time I have spoken to with Mr Kaufline once only in relation to a further sum of money ($1000.00) that Glenys and I purportedly owed him for a car we purchased for Erin McGuire.”

The Respondent also drew the Tribunal’s attention to the Applicant’s Schedule of Assets and Liabilities dated 18 August 2009 which had been filed by his lawyers in the property proceedings and stated:
“Money owed by company in liquidation:
Company owes the Applicant (Mr Brennan) $52,956.04 for money paid by him to Kaufline for boat debt.”
This includes the interest which is the subject of the present proceedings.
The Respondent provided the Tribunal with a copy of the decision by Rares J in the property proceedings dated 21 December 2010 and drew the Tribunal’s attention to paragraphs 101, 102, 103 and 112 the relevant parts of which state:
“101 I have valued the company at $150,000, being the approximate amount that the liquidator indicated will be available for distribution to creditors. Apart from the amount in Mr Brennan’s proof of debt, that the liquidator has admitted, there is no evidence of any other liability owed by the company. I infer that Mr Brennan has discharged any liabilities of the company known to him. This is because, first, the nature of the items that Mr Brennan has claimed in his proof of debt and, secondly, the fact that Mr Brennan sought to step into the shoes of the company’s business in his new activity as a sole trader under the name of “Rob Brennan & Associates”. He gave evidence that he had discharged the company’s liabilities from first, moneys that he received and later from his own money. Mr Brennan was in a position to prove that the assets and liabilities of the company are. He had its records, at least up to the time of liquidation. He had direct contact with its debtors and creditors. He had no evidence to suggest that he had left any creditors unpaid.

102 Mr Brennan had made a report as to the affairs to the liquidator that asserted that creditors’ claims exceeded $660,000, plus any amounts owed to the Australian Taxation Office. However, the liquidator rejected over $125,000 of Mr Brennan’s proof of debt and neither party led any evidence of any other claims that had been made on the liquidator. …….
103 In arriving at this valuation I have also considered that while the liquidator has admitted Mr Brennan to proof for about $217,000, Mr Brennan has agreed that he owes the company $205,000 that I infer consists wholly or largely of moneys that he appropriated from its debtors after he left the relationship. It is likely that those two sums will be able to be set off.
……

112. Mr Brennan should assume sole ownership of the company. He can benefit from any return to shareholders but also carry the burden of the unsuccessful investment in “Nebo”. He should also bear the risk that there are other unpaid creditors whom the liquidator will admit to proof that may diminish any benefit that any beneficial ownership might otherwise have brought him. In the circumstances when he had control of the company for nearly two years after separation his failure to lead any evidence to suggest that the company has unpaid creditors and his positive assertions that he had paid its creditors to make it just and equitable that he bear the risk that there are any unpaid creditors.”

At paragraph 134 of the Judgment, Rares J stated that the parties should prepare orders to give effect to his reasons. He considered orders of the following nature to be appropriate:
“The parties should prepare orders to give effect to these reasons. I consider orders of the following nature to be appropriate:
(1)Mr Brennan execute a transfer of his interest in the Forrest house in favour of Ms McGuire.
(2)Ms McGuire execute a transfer of shares in the company in favour of Mr Brennan, as assignment to him all her rights against the company in its own right and as trustee of the superannuation fund, her resignation as a director and secretary of the company and do all things reasonably necessary on her part to be done to procure her brother to execute such an assignment and resignation.
(3)Ms McGuire cause to be paid to or rolled over in favour of Mr Brennan out of her superannuation fund $775,000
(4)Mr Brennan should pay 50% of Ms McGuire’s costs of the proceedings.
(5)Mr Brennan should return Ms McGuire’s personal records of herself, her children and family.
(6)Both parties should sign all necessary documents to enable the other to prepare any superannuation and tax returns and authorize their financial advisers and accounts (sic) to provide their counterparts with such information.
(7)If the parties fail to do what is necessary to assist in finally resolving their financial affairs, I will appoint the Registrar to sign whatever is necessary to do so on their behalves.”
Order 3 of the orders made by Justice Rares on 21 December 2010 stated that “The proceedings stand over to 3 February2011 at 9.30am for the making of final orders.”
At the hearing on 9 May 2013, Ms McGuire told the Tribunal, in response to a question, that Mr Kaufline had subsequently been made a party to the property proceedings in the Federal Court. The Tribunal requested that she provide documentary evidence of that and a copy of the final orders made by Rares J in that matter. Ms McGuire did not provide that material.
The Tribunal again requested, on 21 August 2013, that the parties provide copies of the orders made by Rares J on 9 February 2012 and 23 October 2012. Mr Brennan provided the Tribunal with a number of orders made by Rares J in the Federal Court property proceedings.

Consideration

It was clear from the Response and the statements made during the hearing that Ms McGuire, on behalf of the Respondent, sought that the Tribunal find that Mr Brennan had already litigated this issue in the Federal Court, as it had been “subject of and included in” his documentation in each of the Federal Court proceedings and that he was misusing the Tribunal by attempting to relitigate the same issue.
The Tribunal has considered whether the doctrine of res judicata or the doctrine of estoppel applies in this matter. In Hoysted v Federal Commissioner of Taxation[8] Higgins J succinctly stated the distinction between res judicata and issue estoppel as follows:
“I fully recognize the distinction between the doctrine of res judicata where another action is brought for the same cause of action as has been the subject of previous adjudication, and the doctrine of estoppel where, the cause of action being different, some point or issue of fact has already been decided (I may call it "issue-estoppel").
As stated by Lord Ellenborough in Outram v Morewood, the estoppel precludes parties and privies from contending to the contrary of that point, or matter of fact, which having been once distinctly put in issue by them, or by those to whom they are privy in estate or law, has been, on such issue joined, solemnly found against them.”
[8] [1921] HCA 56 at p.10
The New South Wales Supreme Court explained issue estoppel in John Anthony Jeans v John Richard Bruce & Ors[9]as follows:
“(b)’Issue Estoppel’ (alternatively, ‘estoppel by record’): An issue estoppel as put by Higgins J in Hoysted v Federal Commissioner of Taxation differs from a cause of action estoppel in that the scope of its operation is not confined to the final conclusions of law reached in the prior proceedings. Rather as stated by Dixon J in Blair v Curran at 532-533, an issue estoppel arises in subsequent proceedings when “a state of fact or law is alleged or denied the existence of which is a matter necessarily decided by the prior judgment, decree or order”, provided always that the issues in question were “fundamental or cardinal” to the prior decision rather than merely “subsidiary or collateral. While manifold judicial clarifications of this dichotomy have since been formulated, it is sufficient for present purposes to underscore that the estoppel extends only to those matters upon which it was necessary for the court to reach a conclusion, typically being matters against which an avenue of appeal lies.”
[9] [2004] NSWSC 539, at [304]
Res judicata (i.e. cause of action estoppel) applies where the same cause of action, i.e. the matter now before the Tribunal, was the subject of a conclusive judicial determination between the same parties. In Levet and Levet & Dalla [10] there was recognition of the possibility for a res judicata or an issue estoppel to operate within the Tribunal in the context of its previous decision. Hence it is considered that the Tribunal has jurisdiction to consider the operation of a res judicata or an issue estoppel in relation to a matter previously before a court.
[10] [2013] ACAT 10, at [10]
In considering res judicata, the Tribunal is not satisfied from the matters before it, that the overpayment of the interest was ‘the cause of action’ in either the company proceedings or the property proceedings. The company proceedings resulted in the winding up of the company; the property proceedings resulted in orders being made between Mr Brennan and Ms McGuire adjusting the rights, including in respect to property, between them as people in a domestic relationship. The Tribunal is not satisfied that res judicata applies. The Tribunal is also satisfied that the parties in the company proceedings were the company and Mr Brennan and another and the parties in the property proceedings were Mr Brennan and Ms McGuire until some 14 months after Rares J. had delivered Reasons for Judgment.
In considering issue estoppel the Tribunal needs to determine, whether for the purpose of the Tribunal debt claim, a point or issue of fact is alleged, namely the overpayment by the Applicant to Mr Kaufline of the interest on the loan, the existence of which was a fundamental or cardinal matter necessarily decided by the prior judgment, decree or order of, in this case, the Federal Court, against which lies an avenue of appeal.
The parties to the Tribunal proceedings are Mr Brennan and Mr Kaufline. Mr Brennan’s former de facto partner and Mr Kaufline’s sister, Ms McGuire, was Mr Kaufline’s attorney in the Tribunal proceedings.
The parties in the Federal Court company proceedings were the company and Mr Brennan and another. The company proceedings resulted in orders on 11 November 2008 that the company be wound up. On 27 October 2010, orders were made in the company proceedings in accordance with the Terms of Settlement as set out in paragraph 25 above.
There was no evidence before the Tribunal that would enable it to be satisfied that in the company proceedings a point of fact or issue as alleged, namely the overpayment by the Applicant to Mr Kaufline of the interest on the loan, was a matter necessarily decided by prior judgment, decree or order such that it would estop the claim being litigated in the Tribunal proceedings. Indeed, the evidence of the liquidators was that the interest on the loan paid by Mr Brennan was a personal liability and treated by them as such in the company’s liquidation.
The parties in the Federal Court property proceedings were Mr Brennan and Ms McGuire. In these proceedings Mr Brennan sought an adjustment of property interests pursuant to section 15 of the Domestic Relationships Act 1994 (“the DR Act”). Mr Brennan claimed that the debt and interest he paid to Mr Kaufline was a “property liability which should be taken into account in the distribution of his and Ms McGuire’s property” in his Federal Court Affidavit and in his Plaintiff’s Outline of Case.
Rares J. set out the Statutory Scheme in paragraph 3 of the Reasons for Judgment: “3. The Act [DR Act] creates a statutory means of adjusting some rights, including in respect of property, between persons within its definition of a domestic relationship. A domestic relationship, for the purposes of the Act, is a personal relationship between two adults in which one provides personal or financial commitment or support of a domestic nature for the material benefit of the other and includes a domestic partnership but not a legal marriage (s.5(1)). [words in square brackets added]”
After the hearing in the Federal Court property proceedings, Rares J. delivered his written judgment on 21 December 2010, and at the end, asked the parties to prepare orders giving effect to his decision. Rares J. did not specifically make orders about Mr Kaufline’s debt or the interest payment which Mr Brennan had included in his affidavit under “the property and financial resources of the parties”. The only references in the Reasons for Judgment to this debt are found at paragraph 60 and 62, in the section of the judgment which was headed “Acquisition of the yacht” namely:
“60…. However, there was not enough money in the bank account or otherwise available to Enid Brennan or Mr Brennan, through his control of her finances, to enable all of the brothers to be paid $92,305.56. There was a shortfall of $50,000. To make up for this shortfall, Mr Kaufline lent the company $49,400. The company used that money and a further $600 to pay to pay $50,000 to pay his share to one of the brothers, Peter Brennan, together with a cheque from Mrs Brennan’s account for $42,305.56. Mr Brennan used his share, the loan from Mr Kaufline and the $600 to reduce further the amount of the loan the company owed Enid Brennan.
62 The result of Mr Brennan using his “forward inheritance” and Mr Kaufline’s loan was to reduce the amount owing by the company to the estate of Jack Brennan and his wife to $227,477.56.”

While Rares J. stated that Mr Kaufline lent the $49,400 to the company there was no reference to the interest paid by Mr Brennan in August 2007 to Mr Kaufline in the Reasons for Judgment and that the liquidators determined that the $49,400 loan was a company liability while the interest was Mr Brennan’s personal liability.
Rares J. considered the principles applicable to the discretion of ordering an adjustment of property rights under the DR Act and, at paragraphs 9 and 10 of his judgment, he referred to the leading authority on the construction of the DR Act, Ferris v Winslade, [11] which was a decision of Cooper J when sitting as a judge of the Supreme Court of the Australian Capital Territory. At paragraph 10, Rares J. stated:
“Cooper J explained that the task of the Court under s.15(1) is not an accounting exercise, but rather it is to make a holistic value judgment in the exercise of a discretionary power of a very general kind. He concluded that the real impact on each of the parties in money terms was the critical issue for the purpose of assessing each of the relevant matters in s. 19(2) as part of the balancing exercise in arriving at an order under s. 15(1).”[12]

[11] (1998) 22 Fam LR 725

[12] (1998) 22 Fam LR 725 at [34]-[35]

At paragraph 11, Rares J. said:
“The exercise of power under section 15(1) ultimately requires the Court to select a round figure or percentage to reflect an outcome that is just and equitable as an adjustment to be made having regard to the criteria in s.15(1). This outcome is also informed by the requirement in section 14 that the Court should seek to achieve finality in the financial relationship between the parties when granting relief: cf. Mallett v Mallett (1984) 156 CLR 605, at 608 per Gibbs CJ. As Stone J observed in McKenzie v Storer [2008] ACTSC 88 at [86]-[87] the Court has broad powers under the Act to make property adjustments between the parties, both with and without terms and conditions. Her Honour pointed out that in Baumgartner v Baumgartner (1987) 164 CLR 137 at 150 Mason CJ, Wilson and Deane JJ said:
‘The court should where possible, strive to give effect to the notion of practical equality, rather than pursue complicated factual inquiries which will result in relatively insignificant differences in contributions and consequential beneficial interest.’”

At paragraph 14, of his Judgment Rares J. stated:
“Thus, in arriving at a discretionary evaluation of whether it is just and equitable to make an order adjusting the interests in property of the parties to a failed domestic relationship, the Court must have regard to all of the circumstances that bear on the assessment. These include those specifically referred to in ss. 15(1)(a)-(d) as well as the more general consideration of other matters, if any, that the Court considers relevant as provided in s. 15(1)(e). The latter allows the Court to assess the overall nature of the parties’ relationship, in the context of the evaluative task of determining the just and equitable outcome in a given case.”
It appears to the Tribunal that Rares J. took a holistic value judgment in the exercise of the discretionary power of a very general kind in section 15 of the DR Act when adjusting Mr Brennan’s and Ms McGuire’s interests in the property from their failed domestic relationship.
It appears from a perusal of the Federal Court orders provided to the Tribunal by Mr Brennan and from the Federal Court website that further orders were sought and issued to enable the proposed orders referred to in Paragraph 51 above to be perfected. In particular, a number of these subsequent orders related to Ms McGuire failing or not being able to procure Mr Kaufline’s execution of the assignment and resignation referred to in (2) of the proposed orders.
In the 17 February 2011 decision, the Federal Court said:
“3. A vital purpose of orders that should be made under the Domestic Relationship Act 1994 (ACT) is to give effect to s 14. That requires the Court to make orders that will end the financial relationship between the parties to the failed domestic relationship and avoid further proceedings between them. The orders that my earlier reasons contemplated were intended to achieve that end.
…..
13. Next, Ms McGuire complained of the draft order that provided for the parties, upon their compliance with the order, to have no further rights against or liability to the other in respect of the superannuation fund, the company or any interest in real or property for which he or she would have been entitled to make a claim in these proceedings. She asserted that the Court had no power to take away other rights. I reject that argument. The proposed order utilises the Court’s powers under s 15 of the Act, in a plenary way to achieve its object expressed in s 14. The parties carried out their complex financial relationship through, among other vehicles, the company and the superannuation fund. That extended web of relations is all part of the matter the subject of these proceedings under the Act.”
Ultimately, on 9 February 2012, Rares J. ordered that Ben McGuire (Ms McGuire’s son), Peter Lyons and Wayne Kaufline be joined as respondents to the proceedings and subsequent orders were made by Rares J. in relation to Mr Kaufline and the Rob Brennan Superannuation Fund.
Final orders were made by Rares J. on 23 October 2012 in relation to Mr Kaufline’s interest and liability to the Superannuation Fund including that Mr Kaufline pay the trustees $19,900; that Mr Brennan be appointed representative of the trustees of the fund to enforce the payment due from Mr Kaufline; orders were also made removing Ms McGuire, Mr Ben McGuire and Mr Kaufline as members and trustees of the fund and that Mr Brennan’s company be appointed as the trustee of the fund.
Having considered all of the information before the Tribunal in relation to the Respondent’s claim of issue estoppel arising from Federal Court property proceedings the Tribunal is not satisfied that the overpayment by the Applicant to Mr Kaufline of the interest on the loan, was a fundamental or cardinal matter to the prior judgment, decree or order of the Federal Court.
Mr Kaufline was not a party to the Federal Court property proceedings until some 14 months after the Reasons for Judgment delivered on 21 December 2010. It appears that orders were subsequently sought because Mr Kaufline had not executed an assignment to Mr Brennan of his rights in the company in its own right and as trustee of the superannuation fund and his resignation in the company. Rares J. intended making final orders on 3 February 2011.[13] Had Mr Kaufline executed those documents within a reasonable time after the orders in paragraph 134 of Rares J.’s judgment had been prepared, it would not have been necessary for Mr Kaufline to be joined as a respondent. It appears to the Tribunal that Mr Kaufline was ultimately joined as a party to ensure that the orders in relation to the superannuation fund, of which the company was trustee, were perfected.

Conclusion

[13] Brennan v McGuire NSD 1147 of 2010, Order 3, Rares J. 21 December 2010

The Tribunal is not satisfied, having considered all of the evidence before it, that the Federal Court determination involving Mr Brennan and Ms McGuire in December 2010 dealt with an issue or stated a fact or law that was the foundation for the final decision which should estop Mr Brennan from pursuing the Tribunal proceedings against Mr Kaufline.
The Tribunal is also not satisfied that the issues or stated facts dealt with by the making of the 23 October 2012 orders should estop Mr Brennan from pursuing the Tribunal proceedings against Mr Kaufline.
For the above reasons the Respondent’s claim relying on estoppel fails.

Is the Counterclaim statute barred?

The relevant law in the Australian Capital Territory is found in the Limitation Act 1985. Relevantly, sections 11 and 32 state:
11General
(1)Subject to subsection (2), an action on any cause of action is not maintainable if brought after the end of a limitation period of 6 years running from the date when the cause of action first accrues to the plaintiff or to a person through whom he or she claims.
(2)Subsection (1) does not apply to a cause of action in relation to which another limitation period is provided by this Act.
32Confirmation
(1)If, after a limitation period fixed by or under this Act for a cause of action begins to run but before the end of the limitation period, a person against whom (either solely or with other persons) the cause of action lies confirms the cause of action, the time during which the limitation period runs before the date of the confirmation does not count in the reckoning of the limitation period for an action on the cause of action by a person having the benefit of the confirmation against a person bound by the confirmation.
(2)For this section—
(a)a person confirms a cause of action if, but only if, he or she—
(i)acknowledges, to a person having (either solely or with other persons) the cause of action, the right or title of the person to whom the acknowledgment is made; or
(ii)makes, to a person having (either solely or with other persons) the cause of action, a payment in relation to the right or title of the person to whom the payment is made; and
(b)a confirmation of a cause of action to recover interest on principal money operates also as a confirmation of a cause of action to recover the principal money; and
(c)a confirmation of a cause of action to recover income falling due at any time operates also as a confirmation of a cause of action to recover income falling due at a later time on the same account.
(3)….
(4)An acknowledgment for this section shall be in writing and signed by the maker.
(5)…..

Evidence

The Respondent/Cross Claimant, in his affidavit affirmed on 26 March 2013, stated that he carried out some work on the Applicant’s boat in September 2005 and that he installed some display lights and transformers at the home where the Applicant and Ms McGuire lived. He did not state when the electrical work was carried out. He told the Tribunal that he had not rendered accounts for the work on the yacht or the electrical work at the house.
The Applicant told the Tribunal that the electrical work was undertaken in around 1999/2000 and the work on the boat was undertaken in September 2005. He had not received invoices or accounts from the Respondent for the work on the yacht or for the electrical work.

Consideration

The Counterclaim was lodged with the Tribunal on 20 February 2013, some 13 or 14 years after the electrical work was carried out, and seven years and five months after the work on the boat was carried out. No invoices were issued for the work.
The Limitation Act states in section 11 that a limitation period for bringing such a claim is six years from the date that the cause of action first accrues.
The Tribunal is satisfied that each claim or cause of action accrued when the work was carried out and, accordingly, in each case the period of six years has expired. It follows that each claim in the counterclaim is statute barred.
Under section 32 of the Limitation Act, a limitation period can be affected if a person who has the obligation (in this case, the Applicant) confirms or acknowledges the cause of action to the person having the benefit (here the Respondent/Counterclaimant) during the limitation period in which case the limitation period commences from the date of confirmation. Pursuant to subsection 32(2)(a)(i) and subsection 32(4) of the Limitation Act, such an acknowledgement must be in writing and signed by the person making the acknowledgement.
There was no documentary evidence of such an acknowledgement signed by Mr Brennan.
In the letter the Counterclaimant wrote to the Applicant’s solicitor on 14 March 2008, he referred to the services he rendered for the yacht and at the premises and stated “I reserve the right to take whatever action I deem necessary to recover such sums.”
This letter is not an acknowledgement as required by subsection 32(4). It has not been written and signed by Mr Brennan, but written and signed by Mr Kaufline. Given the evidence before the Tribunal in relation to the claim for electrical work to the premises, the claim for $2,400 was already statute barred by the time this letter was written.

Conclusion

Having considered all of the matters before the Tribunal in relation to this preliminary issue, the Tribunal is satisfied that both claims brought by the Counterclaimant are statute barred and therefore fail.

The Applicant’s Claim

The Applicant’s claim is for Mr Kaufline to repay to him the second payment of interest of $3,556.04 as he had received the payment of interest on the loan twice; firstly by a cheque drawn by Ms McGuire on Mr Brennan’s account in the amount of $2,706.85 on 6 June 2006, and secondly by a payment by Mr Brennan of $3,556.04 on 3 August 2007.

The evidence

The Deed of Agreement dated 15 May 2006, is between Mr Kaufline and Mr Brennan personally. It provided that Mr Kaufline would loan Mr Brennan $49,400 for one year and the interest was to be calculated at the rate of 5% per annum or such other rate as is aligned with the CPI, as is notified in writing by the Administrator to Mr Brennan from time to time. Clause 3 of the Deed provided for the interest to be prepaid.
It is not in dispute that Ms McGuire prepaid the interest of $2,467.40 to Mr Kaufline on 6 June 2006. Mr Brennan said he was unaware of this prepayment.
The loan fell due on 15 May 2007.
Mr Brennan said he received a letter from Mr Ben McGuire, Ms McGuire’s son, dated 22 July 2007 stating “I act for Wayne Kaufline” and requesting payment by 26 July 2007 of $50,257.52, being $49,400.00 plus interest to 26 July 2007 of $857.52. This date was later extended to 1 August 2007.
On 3 August 2007, Mr Brennan said that he paid Mr Kaufline $49,400 and $3,556.04 for the interest. He calculated the interest using an interest rate of 5.9% rather than 5.0% in the Deed for a period of 445 days. At this time he did not know that Ms McGuire had already prepaid the interest for the term of 12 months, i.e. until 15 May 2007.
Mr Brennan unsuccessfully sought the overpayment from Mr Kaufline.
Mr Kaufline told the Tribunal that he had received the payment of $2,467.40 in June 2007 and $3,556.04 in August 2007.
He did not repay the second payment received from Mr Brennan as it was his intention to set that payment off against the debts Mr Brennan owed to him, i.e. the work on the yacht and the electrical work at the premises which were the subject of his Counterclaim.

Consideration

The Tribunal is satisfied from considering the available evidence that Mr Kaufline was paid the interest due to him pursuant to the Deed, twice. He has been unjustly enriched.
He was entitled to the first payment of interest of $2,467.40 in accordance with the prepayment terms of the Deed. As he did not receive the lump sum of $49,400 on 15 May 2007, the due date, he was also entitled to interest calculated at 5% per annum (in accordance with the Deed) from that date until payment in full.
The amount of $49,400 was repaid to Mr Kaufline on 3 August 2007. He was entitled to interest on the principal sum from 15 May 2007 to 3 August 2007, a period of 74 days. The Tribunal has determined that the annual rate of interest on $49,400 at 5 % is $2,470. The daily rate is $6.76 and for 74 days is $500.75.
Mr Kaufline was not entitled, pursuant to the Deed, to retain the whole of the monies paid to him by Mr Brennan on 3 August 2007. He was entitled to $500.75 of that amount. The matters set out in his letter to Mr Brennan’s solicitor dated 14 March 2008 do not disclose any or any valid defence. Mr Kaufline was well aware when he wrote this letter that Mr Brennan had asked in writing that he repay the overpayment. Instead, Mr Kaufline retained that second interest payment for his own use.

Conclusion

For the reasons set out above the Tribunal is satisfied that Mr Kaufline is indebted to Mr Brennan in the sum of $3,055.29, being $3,556.04 less $500.75.The Tribunal will enter judgment in Mr Brennan’s favour for this amount.
In the application filed on 11 June 2013 Mr Brennan also sought additional costs of attempted service of $165 and subpoenas of $37 be awarded to him. The Tribunal is not satisfied that it has the power under section 48 of the ACAT Act to make such an order. The Tribunal does have the power under subsection 48(2)(a) of that Act to order that the Respondent pay the Applicant the filing fee for his Application.
The Applicant has sought interest from 13 February 2008, the date he wrote to the Respondent requesting the interest overpayment be repaid, at 5% which appears to be the contractual interest in the Deed. However, the Applicant has written “N/A” in relation to “Contractual Interest is claimed”. Accordingly, the Tribunal will determine the amount of interest to be paid in accordance with the Court Procedure Rules 2006 (Rule 1616) as detailed in the Debt Application.
The Tribunal is satisfied that the Applicant is therefore entitled to pre-judgment interest of $1,434.07. The pre-judgment interest of $1,434.07 and the filing fee of $127.00 will be added to the judgment.
………………………………..

Ms E. Symons
Presidential Member

PUBLICATION DETAILS

TO BE PUBLISHED

To be completed by Tribunal Staff

PART A

FILE NUMBER:	XD12/1540
PARTIES, APPLICANT:	ROBERT GEORGE BRENNAN
PARTIES, RESPONDENT:	WAYNE KAUFLINE
COUNSEL APPEARING, APPLICANT
COUNSEL APPEARING, RESPONDENT
SOLICITORS FOR APPLICANT
SOLICITORS FOR RESPONDENT
TRIBUNAL MEMBERS:	Ms E. Symons
DATES OF HEARING:	10 April 2013, 9 May 2013
PLACE OF HEARING:	Canberra

PART B

RECOMMENDATION:

FULL REPORT ( ) CASE NOTE ( ) UNREPORTED DECISION ( )

COMMENTS: