Camira Holdings Pty Ltd v Rae
[2021] WADC 115
•26 NOVEMBER 2021
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL
LOCATION: PERTH
CITATION: CAMIRA HOLDINGS PTY LTD -v- RAE [2021] WADC 115
CORAM: WHITBY DCJ
HEARD: 18 NOVEMBER 2021
DELIVERED : 26 NOVEMBER 2021
PUBLISHED : 26 NOVEMBER 2021
FILE NO/S: CIV 3595 of 2018
BETWEEN: CAMIRA HOLDINGS PTY LTD
Plaintiffs
AND
DAMIAN RAE
Defendant
Catchwords:
Oral loan agreement - Dispute as to parties to the loan - Non-appearance by the defendant at trial - O 34 r 2 Rules of the Supreme Court 1971 (WA) - Expert evidence given by a party to the action - Balance sheet prima facie evidence of the loan - s 1305 Corporations Act 2001
Legislation:
Corporations Act 2001 (Cth)
Rules of the Supreme Court 1971 (WA)
Result:
Judgment for the plaintiffs
Representation:
Counsel:
| Plaintiffs | : | Mr S Blyth |
| Defendant | : | No appearance |
Solicitors:
| Plaintiffs | : | Lewis Kitson Lawyers |
| Defendant | : | In person |
Case(s) referred to in decision(s):
Australian Broadcasting Corporation v Kane And Others (No 2) (2020) 377 ALR 711
Broadway Pty Ltd v Lewis [2012] WASC 373
Stone v Smith (1887) 35 Ch D 188, 190
Warwick Entertainment Centre Pty Ltd (Receivers and Managers Appointed) atf the Warwick Entertainment Centre Unit Trust v Silkchime Pty Ltd (Receivers and Managers Appointed) atf the Silkchime Unit Trust [No 2] [2012] WASC 275
WHITBY DCJ:
Introduction
I will refer to the parties and other dramatis personae as follows in these reasons with no disrespect intended (as this is how the plaintiffs referred to them in submissions):
(a)Camira Holdings Pty Ltd, the first plaintiff (in its capacity as trustee for the R Judd Investment Trust) as Camira;
(b)Robin Boyd Judd, the second plaintiff, as Robin;
(c)Damian Rae, the defendant, as Damian;
(d)Rae Group Pty Ltd as Rae Group;
(e)RMS Constructions Pty Ltd as RMS Constructions; and
(f)RMS Structures Pty Ltd as RMS Structures.
Robin is a chartered accountant employed at accounting firm William Buck. Camira is the corporate trustee of Robin's family trust and Robin is a director of Camira.
Damian was a director and secretary of RMS Constructions (from 4 February 2013 to 21 September 2015) and a director and secretary of RMS Structures (from 20 June 2013 - 16 April 2016).
Damian was the director, secretary and shareholder of Rae Group.
Rae Group was a shareholder of RMS Structures and of RMS Constructions.
Robin and Damian met through a mutual friend, Luke Saraceni, in mid‑2013. Robin and Damian became friends.
RMS Constructions and RMS Structures were in the business of installing prefabricated tilt-up walls in commercial properties.
Robin and Damian had a number of conversations in December 2013 regarding funds that Damian required in order for RMS Construction and RMS Structures to continue to trade.
Robin and Damian reached an agreement whereby Camira (or Robin) would loan funds to Damian (or RMS Constructions and/or RMS Structures).
The issue at the heart of the dispute between Robin and Damian is who the funds were loaned to – were they loaned to Damian or to RMS Constructions/RMS Structures?
Robin says that he and Damian agreed that Camira would loan funds to Damian personally and that Damian would use those funds to pay invoices and day to day costs of either RMS Constructions and/or RMS Structures. Damian says that the funds were not loans to him personally, rather they were loans to RMS Constructions and RMS Structures.
Over the period from 3 December 2013 to 28 February 2014, Camira says it loaned $104,941.20[1] to Damian. The funds have not been repaid.
[1] This is the amount loaned as pleaded in the amended statement of claim pars 9, 10, 14. The plaintiff claims the lesser amount of $104,816.47 in the prayer for relief.
RMS Constructions went into liquidation on 24 June 2015 and was deregistered on 21 September 2015.
RMS Structures was deregistered on 16 April 2016.
Damian did not personally appear at the trial, nor was he represented by counsel. Damian previously had lawyers, but they ceased to act for him in October 2021. At the commencement of the trial, I determined that the trial should proceed in his absence.
For the reasons set out below, I find that Camira is entitled to judgment in the sum of $104,816.47 (the amount claimed in the prayer for relief in the amended statement of claim), together with interest at the rate of 21.49% per annum.
These reasons deal with the following matters:
(a)the issue to be determined;
(b)Damian's non-attendance at the trial;
(c)the pleadings;
(d)the evidence; and
(e)conclusion and final orders.
Issue
The issue for determination is whether Camira loaned funds to Damian or whether those funds were loaned to RMS Constructions and/or RMS Structures.
Damian's non-attendance at the trial
Damian did not appear at trial. Counsel for Camira and Robin sought to proceed with the trial in Damian's absence. I determined that the trial ought not be vacated and should proceed in Damian's absence. I did so for the reasons set out below.
The history of the action, specifically by reference to Damian's engagement in the proceedings, is as follows:
(a)on 26 September 2018, the action was commenced by Writ of Summons indorsed with a statement of claim;
(b)on 29 October 2019, Mountains Lawyers Pty Ltd (Mountains Lawyers) filed a memorandum of appearance on behalf of Damian;
(c)on 13 November 2019, Mountains Lawyers filed a defence on behalf of Damian;
(d)on 3 May 2021, the action was listed for a two day trial commencing on 18 November 2021 and orders were made for the filing of various documents in preparation for trial (trial directions);
(e)on 14 September 2021, Mountains Lawyers filed an application pursuant to O 8 r 7 of the Rules of the Supreme Court 1971 (WA) (RSC), supported by the affidavit of Lauren Maree Howard sworn on 13 September 2021 (Howard Affidavit), seeking an order that they cease to act for Damian;
(f)the Howard Affidavit deposed that Mountains Lawyers had been unable to obtain instructions from or maintain consistent contact with Damian and had notified Damian on numerous occasions of their intention to cease to act for him. The Howard Affidavit annexed an email from Damian dated 24 August 2021 which gave details of Damian's email address and WhatsApp contact details;[2]
(g)on 7 October 2021, an order was made pursuant to O 8 r 7 of the RSC declaring that Mountains Lawyers had ceased to act for Damian (Order);
(h)on 19 October 2021, Mountains Lawyers filed a certificate of service certifying that they had served the Order on Damian by email and WhatsApp on 8 October 2021 and 19 October 2021 respectively;
(i)on 8 November 2021, a case management officer of the District Court sent a letter to Damian's last known residential address in Western Australia outlining the documents that Damian was required to file with the court prior to the trial;
(j)on 11 November 2021, a case management officer of the District Court forwarded the 8 November 2021 letter to Damian by email; and
(k)Damian has not complied with the trial directions as at 18 November 2021.
[2] Howard Affidavit Annexure LMH5.
At the commencement of the trial, counsel for Camira and Robin advised the court that he had attempted to contact Damian by WhatsApp prior to the trial and that the message had displayed ''two ticks'' which indicated that it had been read.[3] Counsel advised he had received no response from Damian to that message.[4]
[3] ts 2.
[4] ts 2.
Order 34 r 2 of the RSC provides that if, when a trial is called on, one party does not appear the judge may proceed with the trial of the action in the absence of that party. The court has a discretion as to whether to proceed with or adjourn the trial.
In Broadway Pty Ltd v Lewis [2012] WASC 373, Pritchard J identified the following two fundamental considerations that govern the exercise of the court's discretion as to whether to proceed with a trial in the absence of a party:
(a)natural justice must be afforded to a party to litigation; and
(b)the paramount objective of litigation is the just resolution of disputes.
Has Damian been afforded natural justice?
I am satisfied that Damian was given a reasonable opportunity to defend the action and to appear at trial. He did not avail himself of that opportunity. I am so satisfied because:
(a)Damian was represented by Mountains Lawyers from 29 October 2019 until 19 October 2021;
(b)the trial dates were listed on 3 May 2021;
(c)based upon the matters deposed to in the Howard Affidavit, I am satisfied that Damian was made aware that the trial of this action was listed for hearing commencing on 18 November 2021 and that Damian knew of his obligations pursuant to the trial directions;
(d)on 12 November 2021, the District Court emailed Damian (at an email address from which he had recently emailed Mountain Lawyers) and informed him of the documents he was required to file prior to the commencement of the trial;
(e)Damian did not apply for an adjournment of the trial or communicate to the court any reasons for his non-attendance;
(f)Damian did not comply with any of the trial directions;
(g)this was not a case where Damian unexpectedly failed to appear at the trial; and
(h)further enquiries into his failure to appear at trial are not warranted in light of his conduct in the months leading up to trial.
Just resolution of disputes
The very fact that O 34 r 2 of the RSC permits the trial to proceed in the absence of a party to the proceedings, indicates that the position of the party failing to appear is not the only matter the court must consider.
The court must also consider the position of Camira and Robin and the court's approach to case management. Counsel for Camira and Robin sought to proceed with the trial in the absence of Damian.
Order 1 r 4B of the RSC provides that the objects of positive case flow management are promoting the just determination of litigation, disposing efficiently of the business of the court, maximising the efficient use of available judicial and administrative resources, and facilitating the timely disposal of business.
Given Damian was aware of the trial dates and did not make any application for adjournment of the trial or communicate any reasons to the court why he could not attend the trial, it would not have been consistent with the objects of positive case flow management to adjourn the trial.
While it is always preferable for all parties to be in attendance at a trial in order to fully ventilate the matters in issue, the failure of a party to attend the trial cannot necessarily prevent the resolution of the litigation.
Having regard to all of the circumstances in this case, I am satisfied that Damian was afforded natural justice and that it was in the interest of the just resolution of litigation in the court for the trial to proceed in his absence.
Pleadings
At the commencement of the trial, counsel for Camira and Robin indicated that, in light of Damian's non-appearance at trial, Robin did not intend to advance the alternative case that he personally loaned funds to Damian.[5] This was consistent with the evolution of the pleadings – Robin was only later joined as a plaintiff to the action as a consequence of a plea in Damian's defence denying that Camira had loaned him any funds. In Damian's absence, it was not necessary for Camira to rebut this defence. As a result, the trial proceeded on the basis that Camira loaned the funds to Damian.
[5] ts 4.
Camira says that, between 2 - 18 December 2013, Robin, on behalf of Camira, verbally agreed to loan Damian money on the following terms:
(a)Robin would provide Damian with details of Visa credit cards (Cards);
(b)Damian was permitted to use the Cards to pay invoices relating the business of RMS Structures or RMS Constructions;
(c)Camira, at Damian's request, would transfer funds into a bank account nominated by Damian for such purposes as Damian saw fit;
(d)Camira would continue to loan money to Damian until Damian no longer required funds for the businesses of RMS Constructions and RMS Structures;
(e)Damian would pay interest on amounts loaned to him by Camira at the interest rate of the Cards, being 21.49%;
(f)any monies loaned would be unsecured;
(g)Damian would make repayments towards the outstanding loan and interest to Camira when RMS Constructions and RMS Structures received payments from customers or when Damian was able to obtain alternate finance; and
(h)in any event, Damian would repay all of the funds loaned to him by Camira on the date that Damian no longer required funds for the purpose of the businesses of RMS Constructions and RMS Structures such time including, but not being limited to, when RMS Constructions and RMS Structures:
a. had sufficient cash flow;
b. obtained alternative finance; or
c. ceased to operate.
(Loan Agreement).[6]
[6] Amended Statement of Claim dated 3 September 2021 par 8.
Camira says that between 3 December 2013 and 28 February 2014, pursuant to the Loan Agreement, it loaned Damian a net total of $104,941.20 (the Loan).[7]
[7] Amended Statement of Claim dated 3 September 2021 pars 9, 10, 14.
Camira says that the Loan became due and payable by Damian to Camira on 16 April 2016, the date when RMS Structures was deregistered,[8] as Damian no longer required funds for the purposes of RMS Constructions or RMS Structures from that date.[9]
[8] RMS Constructions having been earlier deregistered on 21 September 2015.
[9] Amended Statement of Claim dated 3 September 2021 par 6.
In his Defence, Damian denies the existence of the Loan Agreement and says that:
(a)all monies were advanced to RMS Constructions and RMS Structures and were not loans advanced to him personally;
(b)Robin retained control of the Cards;
(c)RMS Structures and RMS Constructions occasionally provided invoices to Robin which Robin paid on their behalf; and
(d)Robin described the payment of those invoices as 'secured by factoring RMS invoices'.[10]
[10] Defence dated 13 November 2019 pars 5 - 6.
Evidence
In the absence of a defendant, a plaintiff must still prove its claim to the extent that it carries the burden of proof.[11] Camira is therefore required to prove the matters pleaded in the amended statement of claim on the balance of probabilities.
[11] Stone v Smith (1887) 35 Ch D 188, 190
A court can only determine the issues raised by the pleadings on the basis of the evidence adduced by the parties. Robin was the only witness who gave evidence at the trial.
Damian's failure to attend at the trial meant Robin's evidence was not contested. As there was nothing else which cast doubt on his evidence, I accept his evidence.
Loan amounts
Robin spoke with Damian by telephone on a number of occasions from early December 2013 until February 2014 in relation to loaning Damian money.[12]
[12] ts 24 - ts 25.
In early December 2013, Damian told Robin that he needed to borrow money to make some payments so that he could 'continue in business'.[13] Robin asked Damian what he needed money for and Damian told him he needed it to pay an invoice for Peritas Consulting.[14] Robin told Damian he would loan him the money for the invoice and that he would give Damian his credit card details in order to pay the invoice.[15] Robin told Damian he would have to pay interest on the loan at the rate charged by his credit card which was 'around 21%'.[16] Damian said ok.[17]
[13] ts 23.
[14] ts 23.
[15] ts 23 - ts 24.
[16] ts 24.
[17] ts 24.
Robin gave his credit card details to Damian. The amount of $31,218.83 was deducted from Robin's credit card as a payment to Peritas Consulting on 3 December 2013.[18]
[18] Exhibit 1.
Damian telephoned Robin again in early December 2013 and requested to borrow more money from Robin. Robin agreed that Damian could use his credit card, on the same terms as agreed before, to pay invoices.[19] On 13 December 2013, amounts of $16,147.08 and $712.22 were deducted from Robin's credit card.[20]
[19] ts 25.
[20] ts 10 - ts 11.
In mid December 2018, Damian asked Robin if he could use the credit card details as he had to make another payment.[21] Robin told Damian he would loan him more money but he would have to use a different credit card because the one he had given him was 'maxed out'.[22] At this time, Robin told Damian that Camira was the entity that was loaning him the money.[23] Damian said 'whatever'.[24] Robin gave Damian Lynette Judd's (his wife's) credit card details (Robin was a supplementary card holder on this account).[25] On 18 December 2018, an amount of $22,118.78 was deducted from that credit card.[26]
[21] ts 26.
[22] ts 26.
[23] ts 26.
[24] ts 26.
[25] ts 27.
[26] ts 8.
In February 2014, Damian asked Robin to borrow additional funds in order to pay Damian's staff and sub-contractors, car repayments and alimony payments.[27] Robin told Damian he would transfer funds to Damian's bank account and that the loan would be on the same terms and conditions as the previous amounts loaned.[28]
[27] ts 29.
[28] ts 29 - ts 30.
In February 2014, Robin loaned Damian the further net amount of $34,621.56.[29]
[29] ts 34 - This net amount comprises the two amounts of $16,147.08 and $712.22 loaned to Damian on 13 December 2013 by paying Boral Construction less a credit received from Boral Construction on 17 December 2013 for $124.73: Exhibit 4.
All of the amounts that were loaned from Robin's (or Lynette Judd's) credit cards to Damian were reimbursed to those credit cards from Camira's bank account.[30]
Expert evidence
[30] ts 34.
The trial directions gave leave to the parties to adduce expert evidence and required Camira, by 20 June 2021, to disclose in writing to Damian the substance of any expert evidence that it intended to rely upon a trial. Damian was required to do the same by 20 July 2021.
On 25 June 2021, the solicitors for Camira served Mountains Lawyers with a copy of the substance of the Robin's expert evidence they intended to adduce at trial.[31] Although not served strictly in compliance with the time stipulated in the trial directions, this did not prejudice Damian as it was served with sufficient time for Damian to respond prior to trial.
[31] Affidavit of Kristy Jane Lewis sworn 16 November 2021 Annexure A.
Damian did not disclose the substance of any expert evidence that he intended to rely upon at trial by the date ordered in the trial directions or at all.
Robin is a chartered accountant, licensed real estate agent and justice of the peace.[32] Robin is also the director of William Buck, a chartered accounting firm.[33] As a chartered accountant he has knowledge and experience in the preparation and analysis of financial statements.
[32] ts 6.
[33] ts 6.
Robin gave evidence that the Loan was recorded in the balance sheet of Camira as at the year ended 30 June 2014 as a loan to Damian.[34] I am satisfied that he is duly qualified as an expert to give such evidence.
[34] Exhibit 7.
Generally, the independence of an expert witness is integral to the role of an expert, however independence is not a precondition to the admissibility of expert evidence.[35] The expert evidence provided by Robin, although not independent, is admissible. The lack of independence is a matter which goes to the weight I attach to his expert evidence.
[35] Australian Broadcasting Corporation v Kane And Others (No 2) (2020) 377 ALR 711 [238].
Robin's evidence of the recording of the Loan in Camira's balance sheet is not controversial. The balance sheet indicates it was printed on 4 May 2015. It was not a later reconstruction of the Loan in a manner favourable to Camira.
The plaintiff relied upon s 1305 of the Corporations Act 2001 (Cth) (the Act) and the definition of 'books' in s 9 of the Act to adduce the balance sheet as prima facie evidence of the Loan.
By s 1305(1) of the Act, it is provided that:
(1)A book kept by a body corporate under a requirement of this Act is admissible in evidence in any proceeding and is prima facie evidence of any matter stated or recorded in the book.
(2)A document purporting to be a book kept by a body corporate is, unless the contrary is proved, taken to be a book kept as mentioned in subsection (1).
In s 9 of the Act, 'books' is defined to include:
(a)a register; and
(b)any other record of information; and
(c)financial reports or financial records, however compiled, recorded or stored; and
(d)a document. …
In Warwick Entertainment Centre Pty Ltd (Receivers and Managers Appointed) atf the Warwick Entertainment Centre Unit Trust v Silkchime Pty Ltd (Receivers and Managers Appointed) atf the Silkchime Unit Trust [No 2] [2012] WASC 275, Le Miere J found that the accounting records of Warwick and Silkchime were primary facie evidence of the matters recorded in them, relevantly in that case that Warwick had loaned amounts to Silkchime and that Silkchime was indebted to Warwick. Le Miere J said that:[36]
[h]aving regard to the evidence of and concerning the accounting records of Warwick and Silkchime …, it should be found that Silkchime is indebted to Warwick in [specified] sum … unless there is evidence to the contrary.
[36] Warwick Entertainment Centre Pty Ltd (Receivers and Managers Appointed) atf the Warwick Entertainment Centre Unit Trust v Silkchime Pty Ltd (Receivers and Managers Appointed) atf the Silkchime Unit Trust[No 2] [2012] WASC 275 [23].
I am satisfied that Camira's balance sheet for the year ended 30 June 2014 is primary facie evidence of the amount recorded in it, relevantly that Camira had loaned $104,866[37] to Damian and that Damian was indebted to Camira for that amount. As there is no evidence to the contrary, I find that Camira has proved the Loan.
[37] The amount recorded in the balance sheet is not identical to the amount pleaded in the Amended Statement of Claim or the alternative amount claimed in the prayer for relief. The difference is of no significance.
Robin gave evidence that Damian remains indebted to Camira for the total amount of the Loan as at the date of the trial.[38] The balance sheet of Camira as at 30 June 2020 records an outstanding loan owed by Damian in the amount of $105,823.[39] Counsel for Camira indicated that Camira is only claiming the sum specified in the prayer for relief of $104,816.47 from Damian.[40]
Interest
[38] ts 18.
[39] Exhibit 9.
[40] ts 16, ts 18.
I am satisfied that, on the basis of the uncontested evidence of Robin, on each occasion Robin loaned money to Damian, Damian agreed to pay interest at the rate of 21.49%. Robin told Damian, on the first occasion he loaned money to him, that Damian would be required to pay interest at the 'rate charged on his credit card of around 21%'.[41] Damian agreed by saying 'ok'.[42] The interest rate applicable to the Cards was 21.49% per annum.[43]
[41] ts 24.
[42] ts 24.
[43] Exhibits 1, 2 and 4; ts 46.
On each subsequent occasion that Robin loaned Damian money, Robin said to Damian that the money would be advanced 'on the same terms and conditions as before'.[44] I am satisfied that the same 'terms and conditions' included interest at the rate of 21.49% per annum.
[44] ts 29 - ts 31.
Summary and final orders
Camira has proved its claim against Damian for the sum of $104,816.47 and interest at the rate of 21.49% per annum from the date each amount comprising the total sum was advanced until the date of judgment.
Camira and Robin are entitled to the costs of the action.
I will hear Camira and Robin as to the form of the final orders.
I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.
CB
Associate to her Honour Judge Whitby
26 NOVEMBER 2021
0
3
2