Chidiac v Maatouk - [2010] NSWSC 386

No judgment structure available for this case.

CITATION: Chidiac v Maatouk [2010] NSWSC 386

HEARING DATE(S): 18, 19 February 2010

JUDGMENT DATE :
4 May 2010

JURISDICTION: Equity

JUDGMENT OF: Ward J

DECISION: 1. Order the first defendant pay to the plaintiff, for the benefit of the estate of the late Peter Maatouk Snr the sum of $246,540 plus interest from the date on which demand for repayment was made to date.
2. Dismiss the plaintiff’s claims against the second defendant.
3. Stand over for submissions on costs.

CATCHWORDS: LOAN - payment of money held to be made under an enforceable loan agreement between plaintiff and first defendant - first defendant ordered to repay loan amount - CONTRIBUTION - principles concerning doctrine of contribution - no right of contribution in absence of common intention between co-borrowers that second defendant be responsible for repayment - UNJUST ENRICHMENT - claims based on unjust enrichment fail - not sufficient merely to show receipt of benefit by first and second defendants - necessary to establish basis on which retention of benefit unjust - LIMITATION OF ACTIONS - date of accrual of cause of action based on a debt or unjust enrichment - existence of confirmation of debt and operation of s 54 of Limitation Act - proceedings commenced within limitation period - PLEADINGS - necessary to plead factors giving rise to claim for unjust enrichment

LEGISLATION CITED: Limitation Act 1969 (NSW)

CASES CITED: Albion Insurance Co Ltd v GIO (NSW) [1969] HCA 55; (1969) 121 CLR 342
Anon, (1293) Y.B 21-22 Edw. I. (R.S.) 110-111
Baltic Shipping Company v Dillon [1993] HCA 4; (1993) 176 CLR 344; (1993) 111 ALR 289
Bhupinder Sekhon v Sharangjit Cour Sekhon [2007] NSWSC 875
BP Petroleum Development Ltd v Esso Petroleum Co Ltd [1987] SLT 345
Brott v Grey [2000] FCA 1727
Burke v LFOT Pty Ltd [2002] HCA 17; (2002) 209 CLR 282; (2002) 187 ALR 612
Capita Financial Group Limited v Rothwells Limited (1993) 30 NSWLR 619
Clune v Collins Angus & Robertson Publishers Pty Limited (1992) 25 IPR 246
Cockburn v GIO Finance Ltd (No 2) [2001] NSWCA 177; (2001) 51 NSWLR 624
Coshott v Lenin [2007] NSWCA 153
Coulls v Bagot’s Executor & Trustee Co Limited (1967) 119 CLR 460
David Securities Pty Ltd v Commonwealth Bank of Australia [1992] HCA 48; (1992) 175 CLR 353
Dering v Earl of Winchelsea (1787) 1 Cox 318; 29 ER 1184; [1775-1802] All ER Rep 140
Dinsdale bht Protective Commissioner v Arthur [2006] NSWSC 809; (2006) 12 BPR 23,514
Faraday v Rappaport [2007] NSWSC 34
Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; (2007) 230 CLR 89; (2007) 236 ALR 209
Forgeard v Shanahan (1994) 35 NSWLR 206
Gleeson v Gleeson [2002] NSWSC 418
Haller v Arye [2005] QCA 224; (2005) 2 Qd R 410
Hoy Mobile Pty Ltd v Allphones Retail Pty Ltd (No 2) [2008] FCA 810; [2008] ATPR 42-240
Jones v Padavatton [1969] 1 WLR 328
Ingram v Ingram [1941] VLR 95
Lactos Fresh Pty Ltd v Finishing Services Pty Ltd (No 2) [2006] FCA 748
Lewis v Lewis & Anor [2001] NSWSC 321
Lumbers v W Cook Builders Pty Limited [2008] HCA 27; (2008) 232 CLR 635; (2008) 247 ALR 412
Makita (Australia) Pty Limited v Sprowles (2001) 52 NSWLR 705
Malco Engineering Pty Limited v Ferreira & ors (1994) 10 NSWCCR 117
Muschinski v Dodds [1985] HCA 78; (1985) 160 CLR 583
Official Trustee in Bankruptcy v Citibank Savings Ltd (1995) 38 NSWLR 116
Ogilvie v Adams [1981] VR 1041
Pavey & Matthews Pty Ltd v Paul [1987] HCA 5; (1987) 162 CLR 221
Plunkett v Bull (1915) 19 CLR 544
Re Brookers (Aust) Ltd (in liq); Brooker v Pridham (1986) 41 SASR 380
Re Hodgson (1886) 31 Ch D 177
Switz Pty Ltd v Glowbind Pty Ltd [2000] NSWSC 222
Torrens Aloha Pty Ltd v Citibank NA [1997] FCA 77; (1997) 72 FCR 581; (1997) 144 ALR 89; (1997) 35 ATR 36
VL Finance Pty Ltd v Legudi [2003] VSC 57; (2003) 54 ATR 221
Vukic v Luca Grbin and Ors; Estate of Zvonko Grbin [2006] NSWSC 41
Wasada Pty Limited v State Rail Authority of New South Wales (No.2) [2003] NSWSC 987
Watson v Foxman (1995) 49 NSWLR 35
Weeks v Hrubala [2008] NSWSC 162
Young v Queensland Trustees Ltd [1956] HCA 51; (1956) 99 CLR 560; [1956] ALR 939

TEXTS CITED: Dal Pont & Chalmers, Equity and Trusts in Australia 4th edn, Lawbook Co., 2007
Mason, Carter and Tolhurst, Mason & Carter’s Restitution Law in Australia, 2nd edn Butterworths, 2008 (1st edn, Butterworths, 1995)
Meagher, Gummow & Lehane, Equity Doctrine and Remedies 4th ed, Butterworths, 2002
Tyler E., Young P., Croft C., Fisher & Lightwood's Law of Mortgage, Butterworths, 2005

PARTIES: Yolla Chidiac (Plaintiff)
George Maatouk (First Defendant)
Anthony Maatouk (Second Defendant)

FILE NUMBER(S): SC 2008/00282252

COUNSEL: K F Morrissey (Plaintiff)
M K Rollinson (Defendants)

SOLICITORS: Stockman & Evans (Plaintiff)
Thomas Booler & Co (Defendants)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

WARD J

TUESDAY 4 MAY 2010

08/282252 YOLLA CHIDIAC V GEORGE MAATOUK

JUDGMENT

1 These proceedings are brought by Mrs Yolla Chidiac, in her capacity as the legal personal representative of her late father (Peter Maatouk) who died intestate on 2 May 2004, leaving his wife (Rose Maatouk) and six children, those being the first defendant (George Maatouk), the plaintiff (Yolla), another daughter (Therese Chahine) and three other sons (Michael, Fred and Maurice Maatouk). Without intending any disrespect I will refer to the various family members by their first names (and, to differentiate between the late Peter Maatouk and his grandson Peter, George’s son, who gave evidence in these proceedings, I will refer to the respective Peter’s as Peter Snr and Peter Jnr).

2 Yolla seeks recovery for the benefit of the estate of moneys said to have been the subject of a loan in 2002/2003 (of sums totalling $320,000) from Peter Snr to George in order to enable George to satisfy his obligations under a Family Court settlement he had reached with his ex-wife, Jasmine. The funds provided to George had been obtained by Peter Snr by way of a loan facility entered into with the National Australia Bank and secured over Peter Snr’s property in Punchbowl, that having been the Maatouk family home at that stage for over 30 years.

3 The second defendant (Anthony Maatouk) is another of George’s three sons and thus also a grandson of Peter Snr. In 2002 Anthony signed the application for the National Australia Bank loan facility as joint borrower with his grandfather. He admits that he did so at his grandfather’s request, although he says that he only thought he was signing by way of a guarantee of the loan. The loan application was approved by the bank and a loan account was established in their joint names, from which there were two withdrawals, one in November 2002 and one in February 2003. In each case the moneys so withdrawn were used to discharge George’s obligations to Jasmine.

4 It is not disputed by the defendants that Peter Snr (whether jointly or otherwise) borrowed the sums in question (and that they were provided to or for George’s benefit), nor is it disputed that the borrowings were secured by a first mortgage over the Punchbowl property, which seems to have been unencumbered at the time. The defendants deny, however, that the provision of the funds to or for George’s benefit was by way of a loan to him and they deny that there was any agreement by one or both of them to repay those sums to Peter Snr (or to make good the National Australia Bank borrowings, including interest). George contends that the moneys were provided by his father as a gift. (Anthony’s evidence, as I understand it, was that when he signed the application to borrow funds with his grandfather, as co-borrower, he believed that he was agreeing to guarantee the loan and that his only liability to the bank in relation to the loan would have arisen had there been a shortfall on the sale of the house and a call was made on him as guarantor.)

5 For the estate it is pleaded that under the loan agreement between Peter Snr and the defendants, the moneys provided by Peter Snr were repayable either on demand or on the sale of a property in Belmore then owned by a company in which George was the majority shareholder (Clarenden Pty Limited). During submissions what was pressed was that I should find for the plaintiff on the second of those alternatives.

6 No repayments were made on the National Australia Bank loan (whether by way of principal or interest) from the time the loan account was established in November 2002 until July 2003, two months after the sale of the Belmore property by Clarenden. That property was sold in May 2003 to JYW Pty Limited, a company owned by Yolla and her husband, Joseph. On 30 July 2003, George paid the sum of $160,000 directly to the credit of the National Australia Bank loan account in the joint names of Peter Snr and Anthony (Exhibit A, at p 211 and 288). For the estate, it is contended that this was in part performance of the alleged loan agreement (and amounted to confirmation of that agreement for the purposes of s 54 of the Limitation Act 1969 (NSW) so as to defer the commencement of the operation of the applicable limitation period to the cause of action on the debt). No further payments were made by George (or anyone else) to the credit of the joint loan account (other than a small, and unexplained, transfer in January 2008) until it was discharged in 2008 in the circumstances described below.

7 Peter Snr died unexpectedly on 2 May 2004. He apparently suffered a heart attack following the discovery of the theft of a safe kept by him at the Punchbowl property, in which cash and jewellery had been kept. The relevance of the unexpected nature of his death is that (as seems to have been accepted by the parties) at the time the National Australia Bank loan was taken out there was no reason to anticipate that Peter Snr would not continue to live for a number of years. Peter Snr, therefore, must surely have been aware that interest would accrue on the National Australia Bank loan until it was repaid; that interest payments would need to be made and that the loan itself would eventually need to be repaid. It seems highly unlikely that Peter Snr (or, for that matter, his son George) would have operated on an assumption that no repayments at all would need to be made to the bank and that in due course the bank would simply have recourse to the equity in the property following a mortgagee sale of the family home.

8 At the time of Peter Snr’s death, the amount owing to the National Australia Bank on the loan in Peter Snr’s and Anthony’s joint names was just under $180,000 ($178,660.20, as pleaded in paragraph 7 of the Statement of Claim).

9 The estate of Peter Snr consisted substantially of his interest in the Punchbowl family home (which was then the subject of the mortgage to the National Australia Bank securing the joint loan facility). As his widow, Rose became entitled on intestacy to the whole of Peter Snr’s estate. It seems that no steps were taken at that stage to take out letters of administration in relation to the estate or to enforce any loan agreement between Peter Snr and one or both of the defendants. There was, however, some evidence that over the period from 2004 to 2005 Rose became concerned by calls she was receiving from the bank in relation to the mortgage and that Rose had asked George to repay the loan and had asked one or more family members to get George to do so. There was also evidence (disputed by George and Peter Jnr) that George had told his siblings that Peter Jnr was going to ‘fix’ the National Australia Bank loan. (However, apart from raising the issue at the mass after Peter Snr’s death, it does not seem that any of the siblings pressed the issue at that stage with George, notwithstanding Rose’s request that they do so.)

10 Rose died on 1 May 2006, leaving a will under which her estate was to be divided equally amongst her six children (George, Yolla, Michael, Fred, Maurice and Therese) and (a matter of some controversy with George) nominating Yolla as her executor (Peter Jnr having been the named executor in an earlier will). All of the siblings, other than Therese (who lives in Lebanon), gave evidence in the proceedings.

11 On 23 May 2008, following the grant of probate to Yolla as executor of her mother’s will, the Punchbowl property was sold by Yolla. From the proceeds of sale ($355,000) the sum of $246,540 was used to repay the National Australia Bank and to discharge the mortgage on the Punchbowl property (no substantive payments of principal or interest having been made on that loan since the $160,000 paid by George in July 2003).

12 Yolla has demanded repayment of the sum of $246,540 from both George and Anthony. Each has denied any liability to the estate.

13 Against George, the claim for repayment is made both under the agreement said to have been reached by him with his late father in 2002 for repayment of the borrowed sum and on the basis of a claim of unjust enrichment (namely, that in circumstances where George obtained the benefit of the loan advances he will be unjustly enriched if he is not required to repay to the estate the full amount ultimately paid to the National Australia Bank to extinguish the loan and to obtain the discharge of the mortgage - reliance being placed on Lumbers v W Cook Builders Pty Limited [2008] HCA 27; (2008) 232 CLR 635; (2008) 247 ALR 412 in that regard).

14 A similar claim based on unjust enrichment is made against Anthony. It is not suggested by Counsel for the plaintiff, Mr Morrissey, that Anthony took any financial benefit from the making of the National Australia Bank loan but, rather, that he ultimately received a quantifiable benefit in that his legal obligation to the bank to pay the loan was terminated because of the payment out of the loan by Yolla, as the representative of Peter Snr, in about July 2008 on the sale of the Punchbowl property.

15 The principal claim made against Anthony by the estate is a claim for indemnity, relying upon the doctrine of contribution (Mr Morrissey referring in this regard to Bhupinder Sekhon v Sharangjit Cour Sekhon [2007] NSWSC 875). It is said that Peter Snr and Anthony, as joint borrowers, had a common obligation to repay the loan to the National Australia Bank; that Yolla, as the legal representative of Peter Snr, repaid the National Australia Bank the sum of $246,540 to discharge the joint liabilities of Peter Snr and Anthony; and that Anthony is thereby liable to contribute to the amount paid on his behalf. The measure of contribution is said by Mr Morrissey to be the whole of the amount paid (on the basis that any presumption of equality is displaced by the nature of the relationship between Peter Snr, who received no personal benefit from the moneys borrowed from the National Australia Bank, and George, who did) or, in the alternative, that Anthony is liable to pay by way of contribution 50% of the moneys repaid by the estate, namely $123,270.

16 As noted, the defendants deny that there was any loan agreement as alleged. It is asserted that the circumstances in which Peter Snr made sums totalling $320,000 available to George in 2002/2003 (to help him meet his obligations to his former wife) amounted to a gift by father to son, partly in recognition of financial help which George had given to his parents in past years (and that the subsequent payment of $160,000 by George to the credit of the joint National Australia Bank loan account in 2003 was similarly of a “gratuitous” nature).

17 In relation to the claim against Anthony for contribution it is said that, while both names were on the loan account, only Peter Snr had the mortgage security and therefore it is not shown that Peter Snr and Anthony were under co-ordinate liabilities to the bank. The defendants further rely on the principle that an equity to compel one debtor to contribute does not arise if there is an agreement or common intention that only the other debtor will bear the liability (referring to the discussion in Meagher, Gummow & Lehane, Equity Doctrine and Remedies 4^th ed, Butterworths, 2002, Ch 10 [10-030] and [10-110–135]).

18 It is submitted by Counsel for the defendants, Mr Rollinson, that it is not credible that Peter Snr would have intended Anthony (then aged 20, working as a mechanic in the family business, with no substantial assets and a family of his own) to assume an obligation to repay such a loan. It is said that this is the only reasonable inference to draw from the facts that Anthony took part in the bank transaction only at Peter Snr’s request; that he obtained no benefit from the borrowing itself; that he did not expect to benefit and was not intended to benefit from the borrowing; and that he was under no obligation to help his father, George, carry out the property settlement with his mother, nor was he asked to do so. It is further said by the defendants that the only benefit gained from the borrowing was by Peter Snr in that he obtained the funds he wanted in order to achieve his purpose of helping his son George. (I understand this last submission to relate only to the benefit from the loan as between Peter Snr and Anthony, since George himself obtained an undeniable benefit in not having to fund his own property settlement either temporarily or, on George’s case, at all.)

19 Mr Rollinson further submits that the alternative claims of unjust enrichment must fail against both George and Anthony. As to George, it is said that the benefit George received (presumably there referring to the provision of the initial loan funds, since it is not suggested that George had assumed any obligation directly to the National Australia Bank in relation to the borrowings) was not only not in performance of a contract but was gratuitous; and that the receipt of a benefit without more does not create any restitutionary liability. It is said that, for the same reasons, a common law restitutionary liability on the part of Anthony did not arise (the benefit in his case being the eventual discharge of the National Australia Bank loan for which he had been jointly liable).

20 Finally, it is the defendants’ contention that if (which is denied) there was a contract of loan repayable on demand, or a non-gratuitous benefit conferred on George or Anthony which generated a common law liability to make restitution, any such cause of action against George and Anthony arose immediately upon the payment out of the account of the moneys required for the settlement of Jasmine’s house purchase in November 2002. These proceedings were commenced by the filing of a Statement of Claim on 23 December 2008. The defendants thus say that if any cause of action has accrued against either of them it is barred by s 14 of the Limitation Act (and that s 54 does not operate to defer the commencement of the relevant limitation period as the payment of $160,000 in May 2003 did not amount to confirmation of any cause of action in respect of the alleged debt).

Issues

21 The following issues arise:

1. Was there a loan agreement as alleged between Peter Snr and one or both of the defendants whereby one or both of the defendants agreed to repay to Peter Snr the sum of $320,000 either on demand or, in the alternative, on the sale by George of the Belmore property owned by Clarenden?

2. Is Yolla, as administrator of Peter Snr’s estate, entitled to contribution from Anthony equivalent to the amount paid out of the estate in 2008 to discharge the National Australia Bank loan, or a portion thereof?

3. In the alternative to the above, is Yolla, as administrator of Peter Snr’s estate, entitled to recover from George and/or Anthony the moneys paid to discharge the National Australia Bank loan on the basis of a restitutionary claim of unjust enrichment?

Summary

22 For the reasons set out below, I am of the view that:

As to when the loan was repayable, on balance I consider that the inference to be drawn from the evidence before me is that the agreement between Peter Snr and George was that the moneys provided by Peter Snr were to be repaid when the Belmore property owned by Clarenden was sold or within a reasonable time thereafter. I draw that inference taking into account the following matters: that when the loan was made George was in the throes of negotiating a sale of property owned by his company and would have anticipated the receipt of funds in the near future; that at least one of the family members had been told by his father that the loan was to be repaid when the property was sold; that, significantly in my view, no steps were taken by Peter Snr (or Anthony for that matter) to make any payment of interest or principal on the loan from the time it was taken out (clearly expecting that someone else was to do so); and that George made a substantial payment direct to the loan account of his father and Anthony within a short period after the sale of the Belmore property (which seems to have completed earlier than was necessary under the terms of the contract).

Limitation Act

2. As between Peter Snr and Anthony, there was no agreement (nor was it Peter Snr’s intention) that Anthony should bear any liability (other than perhaps as a last resort) for the repayment of the loan obtained from the National Australia Bank. Rather, I consider that it was Peter Snr’s expectation, based on the agreement he had reached with George, that George would bear the liability for repayment of the borrowings. Therefore, I find that the estate is not entitled to contribution from Anthony in respect of any of the moneys paid out of the estate in 2008 to discharge the National Australia Bank loan.

3. The estate has not established its alternative claims in restitution for unjust enrichment against either of George or Anthony (nor was any such claim adequately pleaded so as to enable me to make any determination in favour of the estate in that regard).

Limitation Act

Facts

23 Peter Snr was born in Lebanon in 1932. He migrated to Australia in 1964 and purchased what became the family home in Punchbowl in approximately 1968. In 1969, his wife, Rose, and their then children (other than George) came to Australia. In 1972, their eldest child, George, came to Australia.

24 George accepted that his father was an uneducated man, who did not speak and read English (and was not rich) (T 108), and Yolla confirmed in her affidavit sworn 10 June 2009 (at [5]), that her father was unable to read or write in English or Arabic. At the time of the relevant events Peter Snr was around 70 and a pensioner. Similarly, Yolla says (and it does not seem to be disputed) that her mother, Rose, was not educated, could only speak a few words in English and could not read or write English (T 19). (In Rose’s dealings with Mr Elias, the solicitor who acted for her in 2005, Arabic was spoken and it seems that in Peter Snr’s dealings with the bank in relation to the loan, Arabic was spoken by the bank officer as well.)

25 For some time, one or more of the brothers worked together in a family enterprise that involved the running of a number of service station and related businesses (at T 81, Anthony explained that the Maatouks operated service station, tyre, motor mechanics and detailing businesses). In 1989, a company, Clarenden Pty Limited was incorporated, the shares then being held (according to George) by all of the brothers, with his father also perhaps having a small shareholding. It seems that it was through this company that the family carried on business from one or more service stations over the years - by the late 1990’s from premises in Belmore adjacent to the premises from which Clarenden (and then, from at least 2000, Yolla and her husband) operated a tyre business.

26 It was put to George in cross-examination that Peter Snr had from time to time from about 1988 put up his Punchbowl home as security to help his children with their various needs and his response was “that is when we were altogether in the business, yes” (T 109.17), by which I understood him to be referring to the time at which he and his brothers together ran the Clarenden business.

27 There was evidence (in Exhibit C) that in the late 1980’s the Punchbowl property had been mortgaged to the Commonwealth Bank. A mortgage was registered on the title in favour of the bank in February 1988 (though the mortgage document itself seems to have been dated a few years earlier, the explanation for which is not apparent to me). George accepted that this mortgage was security to assist with the purchase by Clarenden of a property in Leppington from which Clarenden carried on the business of a service station (T 110.4). That mortgage was discharged on 2 June 1992 (the discharge of mortgage was registered 25 June 1992). (George could not recall precisely – T 110.5 – when the mortgage was discharged but was prepared to accept that the mortgage to enable the purchase of the Leppington service station was discharged at whatever time the Leppington service station was sold).

28 George at first said in the witness box (T 110.40) that he did not believe the family home was used for another loan after the purchase of the Leppington property. However, there was evidence that there had been a mortgage to Arab Bank Australia Limited (in Exhibit C) which was discharged on 30 January 1997. When it was put to George that there had been a loan from the Arab Bank when another property was bought on Georges River Road, Croydon Park (T 110), George readily accepted that that was the case, though emphasising that other security was put up for that loan as well. George said at T 111.5:

When he put the house up for mortgage, he put the house up for all of us, not for me, because we were all partners and shareholders in the company. He did not put the house up only for me.

29 George accepted that the Arab Bank loan was subsequently discharged from the sale of the Croydon Park property (T 111.24). He also accepted that in 1999 there was then a mortgage registered over the Punchbowl property for the benefit of Euphoric Pty Limited (T 111.41), which he said was a company which supplied petrol and oil to Clarenden, and that that mortgage was later discharged. (From the documents in Exhibit C, it appears that a discharge of mortgage was registered 29 November 2002.) (By the time of this third mortgage, the shareholding in Clarenden appears to have been acquired wholly by George and two of his sons, Peter Jnr and Paul and hence the last of the three prior loans would seem to have been for their ultimate benefit, through Clarenden.)

30 When the relevant documents were put to him in the witness box, George accepted (T 112.6 – 112.14) that on at least three occasions before the 2003 National Australia Bank mortgage was taken out, the Punchbowl property had been put up as security for loans (and seemed to accept that these loans were in each case to assist one or more of Peter Snr’s children with their business ventures). There was no evidence of any formal loan agreement having been entered into on any of those occasions but neither was it suggested that there was any intention that Peter Snr should himself be responsible for the respective borrowings applied by him for his children’s benefit but which were being secured by his own home or that he discharged any of those earlier borrowings from his own funds.

31 At some stage in about 1996, George acquired the Clarenden business from his brothers. The current shareholding of the company is held, as to the bulk of the shares, by George (6080 of the 6980 issued shares), with his sons Peter Jnr and Paul each holding a parcel of 450 shares (Exhibit A, at p 259 – 260). George has been a director of the company since 1989 and the company secretary since 1996. (According to that ASIC extract, dated May 2009, (a copy of which appears from p 258 of Exhibit A), Clarenden was the subject of a winding up application in 2000, which was withdrawn in 2002, and again the subject of a winding up application in 2007. During cross-examination, George volunteered that Clarenden is now in the process of liquidation (referring to the commercial garage and factory site occupied by the company, he said: “It’s not being sold, it’s under liquidation if you want to know”) (T 128.8).

32 As noted above, from at least around 1996, George and one or more of his sons, through Clarenden, ran service station/tyre/motor repair businesses from the two adjacent sites at Belmore. (At the time of the loan taken out by Peter Snr in 2002/3, Anthony was employed by Clarenden as a motor mechanic earning approximately $84,000 per annum – T 89.17.)

33 From around 2000, JYW took over the conduct of the tyre service business at the Belmore site (one of the two adjacent Belmore properties).

34 On 31 October 2001, following the breakdown of George’s marriage to Jasmine (after a period of separation while living under the same roof), their matrimonial home was sold (T 124). After the sale of the home, George says he moved in with his parents in the Punchbowl property for about a month before renting a unit in Greenacre, where he says he stayed for about nine months to a year (T 132). At T 132.15, George said he went to Lebanon in 2003. (There was some cross-examination as to George’s movements over the period from 2001. The only relevance of this, as I understand it, was that George had denied that a conversation attributed to him by each of his brothers in early 2005 could have taken place at that time because he said he was overseas – hence the attempt to elicit from George a timeline against which that denial could be tested. George, however, seemed to take offence at this enquiry into his private life – one of a number of matters on which he took issue with Counsel during his cross-examination – and displayed a somewhat truculent attitude to such questions.)

35 Taking George’s timeline on its face, it would suggest that he left for Lebanon somewhere between about September 2002 – December 2002 (ie calculating the time from the sale of his house on 31 October 2001, one month in the Punchbowl home brings one to about the end of November 2001, and then, after a period from between 9 months and a year in the Greenacre property, to September/December 2002, not June 2003). That said, George was emphatic that he bought his current home before he went to Lebanon and the transfer document for that sale bears a stamp duty imprint of 20 May 2003, which would be consistent with a departure for Lebanon around June or July 2003, and he deposited moneys into the joint loan account of Peter Snr and Anthony on 30 July 2003, which seems to put his departure towards the end of that two month period or perhaps slightly later.

36 Later in his evidence, George said that he had been in Lebanon for a year before his father passed away (which would put his departure for Lebanon at around May 2003) and that he came back to Australia in 2004 to attend his father’s funeral and 40 day mass, staying here for between one and one and a half months (and that he then went back to Lebanon where he re-married and stayed for another nine months to a year, only returning to Australia in April 2005 once his new wife had obtained a visa). Somewhat inconsistently, though, he also said that he was away for two to three years.

37 Nothing seems to turn on the precise chronology of events in this regard (since George accepts that he made the deposit of $160,000) other than insofar as it suggests that George’s recollection of dates may not be wholly reliable – something to take into account when considering his assertions as to his whereabouts in early 2005, emphatically put forward by George as contradicting Fred’s account of a conversation with him in early 2005. In that regard, it seemed to me that Fred was by no means suggesting that he had an accurate recollection of the time at which the alleged conversation took place and was simply doing his best to place an approximate time on the conversation.

38 In May 2002, court orders were made by the Family Court in relation a property settlement between George and Jasmine. (Those orders were subsequently amended on 18 February 2003 but nothing turns on the amendments for present purposes.) Of relevance to the present case is that under those Family Court orders George was obliged to make payment of certain amounts to Jasmine to enable her to purchase both a house and a car.

39 In September 2002, Jasmine entered into a contract to purchase a property in Currans Hill (a copy of which appears from p 1 in Exhibit A). Peter Jnr, who is a solicitor and one of George and Jasmine’s three children, seems to have acted in some capacity for his mother in relation to the sale, at least after the exchange of sale contracts (though he was reluctant at first to concede this in the witness box, a matter to which I refer later) and perhaps earlier. Although, in the sale contract, the purchaser’s solicitor is described on the cover page as “Acting for Self”, the contact reference is to Peter Jnr and there is noted a contact facsimile number which was identified by Peter Jnr in the witness box as being that of Maatouks Law Firm, a law firm that he had established at around that time. Subsequent correspondence with the vendor’s representatives was conducted by Peter Jnr on his firm’s letterhead in language consistent with him acting as a solicitor on the transaction and holding himself out as Jasmine’s solicitor.

40 The purchase price was noted in the sale contract as $295,000. George, in accordance with the Family Court orders, was obliged to provide the funds for completion of that sale within the completion period, ie by around November 2002.

41 In Special Condition 8 of the contract for sale (Exhibit A, at p 7), Jasmine warranted that, prior to exchange of contracts, she either had the necessary funds to complete the purchase or, if she did not, she had received approval (satisfactory to her and subject to terms considered by her to be reasonable and acceptable) of an application for financial assistance as would allow her to complete the purchase. This warranty was agreed to be an essential condition of the contract.

42 On the assumption (which seems reasonable in the circumstances) that Jasmine was relying on George to comply with his obligations under the Family Court orders in order to provide the necessary finance for the purchase of her home, that warranty could only prudently have been proffered if Jasmine was confident that George had the necessary funds or had already made satisfactory arrangements for finance to be in place. In circumstances where it seems from George’s evidence that relations with his former wife were strained, one might also assume that any such confidence could only have come from the fact that Peter Jnr was handling the transaction (and that he was aware of the source of the funds for completion). The significance of this warranty, for present purposes, seems to me to be that Peter Jnr apparently felt no need to advise his mother as to the risks involved in the provision of such a warranty or of the need to ensure that finance was in place or in hand consistent with the warranty (and hence might be thought to have had more concrete information as to the source of the funds than he had suggested).

43 There was no evidence that George had taken any steps to arrange finance for the completion of Jasmine’s house purchase independent of the arrangements made by his father for the provision of funds. George accepted, in the witness box, that he was aware that his former wife was to buy a house. He accepted that the contract date for Jasmine’s house was September 2002. He said he did not know how long before that it was that he was informed that Jasmine was going to buy a house. George also said that he did not know who had acted for Jasmine on the house (“I don’t know, it wasn’t my problem” – T 125.25) but nevertheless was able to hazard what turned out to be a correct guess (“I don’t know, it could be my son Peter, I would have to see the contract to remember, I don’t know”). Given that Peter Jnr seems to have acted on a number of intra-family transactions over the years, including the sale from Clarenden to JYW of the Belmore property, George’s professed ignorance of his son’s involvement on this conveyance seems hard to accept. (The relevance of Peter Jnr’s involvement in the sale is something I address later when considering the credibility of the respective witnesses. At this stage I simply note that as between George and the two sons who gave evidence there was a surprising lack of knowledge of each other’s role in these family transactions.)

44 When George was asked in the witness box how he was going to pay the money required to complete the contract for the purchase of Jasmine’s house, he said, “I sold my house [referring, I assume, to the matrimonial home sold in October 2001] for $840,000, I had 160 to pay off” (T 126). Presumably, by this, he was intending to convey that he had no need for any financial assistance from his father. If so, it seems odd that George was so quick to accept the provision of funds (having already, at least on his and his son Peter Jnr’s account of events, refused an offer from his father to transfer the whole of the house to him), particularly since those funds were being procured (as he surely must have realised, given his general awareness of his father’s financial position – T 108) by way of a loan which encumbered the only substantial asset of his pensioner father. It is difficult to see how George could have thought that his father would be able to come up with funds of that amount without borrowing them (since he accepted that his father was not rich and says that for many years he was assisting his parents with their living expenses, from which I infer that they did not have ready funds available other than their pensions). Although the joint loan application referred to savings of about $100,000, there is no evidence that Peter Snr had any separate savings in that amount.

45 If George had the funds readily available to complete the purchase then it is hard to see why (on his version of events) his response to his father’s offer would not have been to the effect “Don’t worry Dad I don’t need any assistance. You don’t need to mortgage your house”, just as he says he refused the offer that the house be transferred to him outright.

46 The suggestion that Peter Snr was proposing to give George the whole of the Punchbowl property had not been mentioned at all in George’s affidavit but was a matter he volunteered in the witness box, with the air of someone playing a trump card, saying [at T 127]:

I never asked my father for any money. Even my father, he was going to give me the whole house. That's something you - if you like to know, sir, but I didn't accept it.

47 The offer of provision of funds to George was, however, something referred to in some detail in the affidavit of Peter Jnr. According to Peter Jnr, his grandfather (in the presence of his grandmother) consulted him about his intentions and told him that he wanted to give George the Punchbowl property to thank George for all he had done for them (as to which Peter Jnr says he had said that he couldn’t become involved, affidavit sworn 30 October 2009 at [7]) and that Peter Snr had later said to him that he wanted to borrow funds on the security of the Punchbowl home in order to give George the money (and that he had asked Anthony to be the guarantor of the loan (T 159.30–159.35) – according to Peter Jnr saying that it was no big deal because there was still a lot of equity in the home (T 159.46)). (I consider later this evidence in more detail but note that it seems inconsistent with Rose becoming concerned (as she clearly seems to have been when consulting a solicitor in 2005 whether or not that was at her own investigation) at why the bank was calling her about a mortgage, if she had understood her husband to have made a gift of those funds to George; just as it is inconsistent with her then asking only for George, and not any of her other children, to repay or “fix” the loan, as George’s siblings say she did.)

48 The National Australia Bank loan was a joint borrowing. On 30 October 2002, Peter Snr (then a pensioner aged around 70) and Anthony (then aged 20, with a wife and young child) signed a joint application for a loan of $320,000 described as being a loan for “investment-purchase share/and other invest assests” [sic] from the National Australia Bank to be secured over the Punchbowl property (Exhibit A, at p 81). (The description of the purpose for the loan was clearly incorrect given the ultimate destination of the funds, unless it could be said that the debt owing by George represented an investment asset acquired by way of investment by Peter Snr/Anthony).

49 As noted earlier, at the relevant time Anthony worked as a motor mechanic employed by Clarenden. He accepted that he was pretty close to his father and to his brothers. He said (T 83) that he was close to his mother as well though (somewhat surprisingly, if that was the case) he said that he did not know where his mother had gone to live after she and his father had separated and after the family home was sold (the more surprising since the evidence was that Jasmine had moved to a home owned by one of Anthony’s brothers and not far from that of Anthony). Anthony denied that he had had any discussion with his father or mother in relation to the property settlement (T 86.50–87.6) (he said he did not regard the state of their marriage as any of his business– T 83.36, though one would have expected a divorce in the family to give rise to some disruption in family relationships). The attitude of Anthony, so far as I could glean from his answers in the witness box, might best be described as one of putting his head in the sand on all contentious issues within the family.

50 Anthony was adamant that he had not borrowed any money and said that he had just agreed to guarantee the loan (T 97.47). He said that he understood what the word “guarantor” meant (T 87.19) “that if you can’t afford to pay the loan off and the house doesn’t get sold and it can’t be paid for, then it comes back to me”. Anthony stated that (T 94.34) “I was a guarantor. I wasn’t a borrower. I was guarantor. I had not received any money nor did I at any stage.” Anthony at one point asserted that the money was not ‘borrowed’, by which he seemed to draw a distinction between a borrowing and an approval of a loan, in that he accepted that it was approved (T 90.40).

51 Anthony said (T 98.22):

“I had a guarantor so that if my grandfather had a problem, couldn’t pay the loan off, the house got sold and couldn’t pay the house, and, yes, I then knew it can land on me. If something was to happen and house wouldn’t cover it, I would because the loan was whatever it was for. I was pretty sure the house would cover it, that’s why I went guarantor on the house.”

52 How it is that Anthony could have formed any independent view at the time as to whether he was to be a borrower or a guarantor is somewhat of a mystery, since Anthony said that he did not read the loan application document when he signed it, he just signed it (T 91.49–T92.1), and seems to have regarded anything to do with the mechanics of the borrowing as not being his business.

53 Anthony, in his affidavit sworn 23 September 2009, says that his grandfather asked him to be guarantor for the loan but didn’t say anything about the amount of the loan or what it was for. (Evidence to a similar effect to that given by Anthony (ie as to the request made by Peter Snr that Anthony guarantee the loan) was given by Peter Jnr in his affidavit, at [11].)

54 Anthony said that he did not think that the details of the borrowing were any of his business, and that he was happy to help his grandfather. “I was doing it for my grandfather. Whatever paperwork needed to be done, I just signed it. I don’t think my grandfather would try and rip me off in any way, that’s why I didn’t read it” (T 92.11–T92.14). Anthony said that he did not open the letters that were addressed because (though jointly addressed and sent to his own home address) they were addressed to his grandfather and that was his grandfather’s business (T 95).

55 The loan application (Exhibit A, at p 82) referred to savings of $105,824. Anthony could shed no light on what those savings could have been (T 92.39). He said that he had a house in 2000 (on which there were borrowings of about $120,000), his income as a mechanic and ‘some savings’ but certainly nowhere in the order of $105,000 (T 93.27). Anthony thinks that he supplied some pay slips to the bank in relation to the loan (T 90.29). Anthony was not sure whether George knew that he was applying for a loan (T 90.31) (indeed on Anthony’s evidence it would seem he was not himself sure what he was applying for or if he was applying for anything at all). Anthony accepted that he had perhaps told his father (“maybe”) that he was the guarantor for a loan for $320,000 (T 91.1).

56 Anthony accepted that he had signed for the money to be ‘released’ (hardly necessary if he was no more than a guarantor) and said that would have been around about the date of the bank statement noting the withdrawal (T 96.1–T96.24). He denied that he knew that this was money needed for the purchase of a house for his mother. At T 100, he said he did not know if the $320,000 was taken out or was for the house; and that he did not know what was done with the money. He denied that he knew that his father had later paid $160,000 into the bank account (T 101.46–T102.7).

57 Anthony accepted that his grandparents’ home was a modest house in Punchbowl (T 99.24); that it was the family home where his grandparents had lived; and that his grandparents were in good health at the time. He accepted that his grandparents had to have a place to live and the security of it and of owning the house was a matter important to them. He understood that his grandfather was a pensioner and could not pay anything for the loan (T 99).

58 On Anthony’s account of the circumstances in which he committed himself to the loan arrangements with National Australia Bank, and even assuming he did not appreciate that he was being nominated as a co-borrower (a matter which should have been abundantly clear to him on the face of the loan application itself had he bothered to read it), he was remarkably unconcerned both at the liability he was there incurring and at the improvidence of such a transaction from his grandfather’s (and his own) point of view if there was no arrangement in place for the repayment of the moneys so borrowed.

59 Such a lack of concern seems only readily understandable (if at all) if Anthony knew or understood that the borrowing was one for which George (or someone else) had agreed to take the responsibility, but Anthony claims to have known nothing about any arrangements in that regard. If the transaction occurred as Anthony claims, with no belief on his part as to how the loan was to be repaid and what seems at best to have been an assumption on his part that the loan would be covered by the equity in the house, it seems to show either an extraordinary naivety on his part or perhaps a reckless disregard for his own financial position.

60 It seems to be accepted by both George and Peter Jnr (though Anthony had apparently no idea that this was the case) that it was the intention of Peter Snr that the funds so borrowed would be used to facilitate the completion of the purchase by Jasmine of the property at Currans Hill and the satisfaction of George’s obligations under the Family Court orders. Certainly, that was the immediate destination of the funds.

61 On 4 November 2002, a mortgage was granted by Peter Snr over the Punchbowl property to secure the borrowing of $320,000. Settlement of Jasmine’s purchase took place on 7 November 2002, with total cheques provided on settlement being $280,828.07 (the correspondence in this regard appearing as part of item 2 in Exhibit A, p 78). A withdrawal slip signed by Peter Snr for that amount is at p 105 of Exhibit A. (The bank statement for that period shows a withdrawal on 7 November 2002 of $280,795.57 – p 280 Exhibit A – but there is no suggestion that the funds provided on completion of the Currans Hill purchase were procured other than by recourse to the National Australia Bank borrowings. The balance between the two amounts seems to be referable to a cheque allowance for $32.50, as per the letter dated 6 November 2002 from the vendor’s conveyancer – p 104 of Exhibit A.)

62 On 18 February 2003 a further sum of $22,508 was drawn down from the National Australia Bank loan account (Exhibit A, p 283). Anthony signed this withdrawal slip (a copy of which was at p 120 of Exhibit A). As noted earlier, this seems inconsistent with his position being simply that of guarantor, not co-borrower, of the funds. It seems that this smaller sum was for the purchase of a car for Jasmine, the remaining obligation still to be satisfied at that stage in respect of the Family Court orders. A bank cheque for $22,500 was drawn from the loan account payable to Jasmine on 18 December 2003 (Exhibit A, at p 121) (the additional $8 perhaps referable to a bank fee for the drawing of the bank cheque).

63 For the estate, it is submitted that this was a family finance arrangement whereby Peter Snr mortgaged the family home to obtain funds, at George’s request, by way of temporary finance for George to pay out his obligations to his former wife and that George agreed to repay the bank loan when his (or, more precisely, Clarenden’s) interest in the real estate at Belmore was sold. (It is accepted by George that at around that time there were negotiations on foot in relation to the sale by Clarenden to JYW of one of the two adjacent sites at Belmore, hence a promise by him to repay the loan by reference to the anticipated sale of that site is not implausible.)

64 George’s position, however, was that the money provided to meet his obligations to Jasmine came as a gift from his father (T 127, 128 and 135). At T 121, George denied that he had asked his father to put up the family home to help him. He agreed that at the time he was negotiating a price for sale of part of his business to Yolla and Joseph (which would have made feasible a promise at that time to repay any temporary finance provided by his father out of that sale). He not only denied that he had asked his father for money or told his father that he would repay him, but also denied that his son (Anthony) had told him anything about entry into the loan arrangements with the National Australia Bank. (I interpose to note again that there seems to have been a remarkable lack of communication between each of George, Peter Jnr and Anthony, if their respective accounts of events are to be believed. Even if, as George said, his children were not happy with him at the time of the break-up with their mother, it defies belief that Peter Jnr (who was arranging the completion of the conveyancing transaction for his mother and might be expected to have been looking to protect her interests) would not have made at least some enquiries of his father at least so as to satisfy himself as to the ability of his mother to complete the sale as she had warranted.)

65 In April 2003, a contract for sale was entered into (settled in May 2003) between JYW and Clarenden for the purchase by JYW for $850,000 of the property owned by Clarenden at Belmore (from which Yolla and Joseph had conducted their tyre business since around 2000) (T 17.30-37). Acting for Clarenden on that transaction was Peter Jnr (Exhibit A, at p 126, 209). Clause 37 of the contract provided that there was a rebate of $115,000 if the purchase settled within eight weeks (and the contracts provided for a loan of $15,000 by the vendor to the purchaser) (Exhibit A, at p 140, 142). (A reduction in the purchase price for a quick sale would ordinarily, to my mind, suggest that the vendor was anxious for completion to occur quickly and hence willing to forego part of the agreed price as an incentive for early completion. This would be consistent with an understanding by George of an obligation to repay to his father the moneys he had provided out of the National Australia Bank loan funds. However, George, in the witness box, suggested that this was agreed simply as a favour to Yolla and her husband – another instance of his ‘gratuitous’ generosity to his family – T 129.35.)

66 Some of the purchase price for the acquisition by JYW of the Belmore property was paid directly in cash by Yolla’s husband to George (a sum of around $83,326.39, as noted on the amended settlement statement of account prepared by JYW’s lawyers, p 208, Exhibit A, or perhaps slightly less, as per Yolla’s evidence at T 44 and as contemplated in the letter dated 15 May 2003 from Peter Jnr, p 203, Exhibit A, he being the solicitor acting for Clarenden on the sale). There was no reference to this in George’s affidavit. However, when George was called to give evidence, leave was sought (which I granted) for further evidence to be adduced in chief in relation to the payment of part of the cash price for the sale of the Belmore property by Clarenden. He said that he gave the cash he received on the sale to his father - “I just gave it to my father” (T 129.41). “Well I gave it to him whether he went inside and put it in the safe, I don’t know, I just gave it to him to keep”, and that he did not ever see that money again (T 106.44).

67 Yolla, in cross-examination, agreed that part of the purchase price had been paid in cash and said that her father had been present when the money was handed over to George at the Punchbowl house (something which George had not mentioned). Yolla said that she did not know what had happened to that cash and that she did not see anybody put it away (T 45.11).

68 What was done with the money, if anything, and the significance of it having been handed to Peter Snr, is not clear. Peter Jnr, in his affidavit sworn 30 October 2009, at [19], when deposing to a conversation with Peter Snr just before his death, said that his grandfather had told him that his safe had been stolen and that it “has your father’s money and jewellery” in it (my emphasis). If that was the same money as given to Peter Snr following settlement of the JYW purchase in 2003, then it seems to suggest that Peter Snr regarded himself as simply the custodian of the cash given to him by George from the sale proceeds (and not that this money had been given to him as part repayment of the National Australia Bank loan amounts or otherwise for his own benefit). That it may have remained in Peter Snr’s safe, as George’s money, since mid 2003, seems not inconsistent with George’s evidence that the gold in the safe was his. In any event, whatever be the source of whatever money was in fact in the stolen safe, there is no suggestion that Peter Snr took any steps to use the cash handed to him after the Belmore sale to pay down the National Australia Bank loan, which surely would have been the case if it had been paid, and if he had accepted it, as part repayment of that borrowing.

69 On 30 July 2003, George deposited the sum of $160,000 into the National Australia Bank loan account held in Peter Snr’s and Anthony’s joint names. A copy of the bank deposit slip dated 30 July 2003 is at p 211 of Exhibit A. (On a cursory comparison, it seems that the depositor’s details on the bank slip may have been completed by George, given the similarity of the “M” in Maatouk on the slip with that in the signature on his affidavit. The only relevance of this, if that were to be the case, would perhaps be in the context of George’s refusal to accept the proposition put to him that he was not in Lebanon in June 2003 and his evidence that he went to Lebanon in June or July 2003. On the latter testimony it would follow that George must have filled out a bank deposit slip on 30 July 2003 and departed almost immediately thereafter.)

70 What was represented by this payment was a significant issue in the proceedings. George says it was a gift to his father. (In supplementary written submissions on the issue of the operation of the Limitation Act provisions, it was put to me that this payment could equally be inferred to be a loan from George to Peter Snr and Anthony, as to which there was no evidence.) The estate contends that the payment was in part performance of the agreement to repay the National Australia Bank borrowings (and confirmation of Peter Snr’s cause of action in that regard). I discuss this issue later.

71 Loan statements were issued by National Australia Bank from late 2002, apparently on a monthly basis, and sent to the address of Anthony but formally addressed to both Anthony and Peter Snr (Exhibit A, at pp 279–343). These show that each month there was a debit for interest of around $1,300 and that the only credit made to the joint loan account prior to the discharge of the loan in 2008 (other than a small transfer of $188.00, on 16 January 2008 – Exhibit A, at p 339) was the $160,000 deposited directly to that account by George on 30 July 2003.

72 Yolla referred in general terms in her first affidavit to conversations with her mother after her father’s death in May 2004, in which she says her mother said words to the effect “I have told George to repay the loan but he won’t talk to me about it” (my emphasis). It was submitted by Mr Rollinson that the discussions in relation to repayment of the loan, as deposed to by the siblings, were not in terms couched as referable to any binding obligation on George’s part. Though the concept of a ‘loan’ would ordinarily suggest that it was to be repayable, I read Yolla’s affidavit in this regard as a summary of the effect of what her mother had said and I am not convinced that great weight can be attached to the reference to a ‘loan’ in the conversations described there in summary form. However, it is of relevance, in my view, that Rose was not apparently suggesting to Yolla that any of the other children were expected to repay the loan nor does Rose seem to have asked any of her other children to do so – which indicates that Rose considered George to be the one responsible for the repayment of the borrowings.

73 It appears that it was not until after the funeral of Peter Snr that the first discussion took place amongst the siblings in relation to the discharge of the mortgage over the Punchbowl property. Yolla says that one of her brothers said to George “when are you going to discharge the mortgage?” and that he said “don’t worry, I will fix it and my son, Peter is arranging for the loan to be finalised” (para 20).

74 Some question was raised in cross-examination of the siblings as to what it was that Peter Jnr could have been asked to ‘fix’. The simplest way of discharging the mortgage would of course have been to pay out the loan then and there. The reference to Peter Jnr arranging for the loan to be finalised or fixed would seem to be readily explicable (as a statement, in effect, that Peter Jnr would arrange for the transfer of funds and documentation of the discharge) in circumstances where George was then shortly about to return to Lebanon. Hence it would not be surprising if he had authorised his son to do what was necessary on his behalf to discharge the mortgage in his absence. Even if such a statement was intended to refer to something to be done by Peter Jnr in his capacity as a solicitor, this would still be consistent with George acknowledging and accepting liability for the loan (whether that involved its discharge through repayment or by way of a refinancing). Most likely, I think, is that a statement of this kind (which I accept was made by George, for the reasons outlined when I come to address the credit of the various witnesses) was intended to convey to George’s siblings that Peter Jnr (in George’s absence overseas) would attend to the repayment of the National Australia Bank loan on George’s behalf.

75 When questioned as to this aspect of the matter, Yolla said that it was Michael who had first broached the subject of when George was going to discharge the mortgage (T 32.45). At T 34.24, Yolla said that George seemed to be happy to pay off the mortgage “he said he was going to, that he told his son to do it and that is what he told us, he was happy to pay the mortgage back”… “and he instructed his son to do it” (T 34.27). When Yolla was asked what George had said, her recollection was to the effect that he had said “I will fix it up, I will get Peter to fix it up” (T 34.46).

76 The estate seems to rely on this as an acknowledgment of liability, which on balance it seems to me to have been, thus supporting the finding that there was in place a loan agreement between Peter Snr and George. While it could conceivably have been seen simply as an offer to sort out the paperwork or to discuss payment options with the bank or the like, without any acceptance of an underlying personal responsibility to make the repayments, the context in which George’s siblings raised the issue seems to me to make George’s response a tacit acceptance that he was responsible for the repayment of the loan. The making of a response of this kind is consistent with the lack of any action taken by Yolla or her other brothers at that stage either to recover the moneys from George or to make arrangements for the servicing of the loan. It seems to me that they had understood that George was to take care of that and they left it to him to do so.

77 Yolla swore an affidavit on 10 February 2010 in which she said that in late 2004 or early 2005 she took her mother to the offices of Elias Gates & Associates Pty Ltd in Revesby. It seems that this visit was for the purpose of preparing her mother’s final will, as the will prepared by Mr Elias was dated 17 January 2005 (Annexure I to Yolla Chidiac’s affidavit sworn 10 June 2009). It may be by reference to this (at least in part) that George bases his recollection that he was not in Australia in early 2005, since at T 137 he said “If I wasn't overseas mum will never change the will”. (Whether that suggests a consciousness that he held a position of some influence over his mother, I do not know, but it does provide indirect support for the opinion held by Yolla that her mother did not wish George to know that she had changed her will, in that it suggests that if George had been made aware of this he would have tried to persuade his mother otherwise.)

78 Yolla’s recollection was that later in 2005 her mother told her that she was getting phone calls from the bank (which I assume to have been the National Australia Bank) and that her mother did not know what a mortgage was (seemingly inconsistent with Yolla’s evidence that her mother was present during a conversation in 2003 in which Peter Snr said that he had put the deeds for the house up as security for George’s loan). Yolla says that she had told her mother ‘that’s to do with George’s loan’. It was at that stage that Yolla and Rose consulted Mr Elias about the matter.

79 Yolla, in her oral evidence, said that after the conversation she had with her mother about the bank phone calls, her mother wanted Yolla to take her to a solicitor and so Yolla took her mother to see George Elias. In evidence was a letter of authority that Rose signed authorising Mr Elias to investigate the mortgage. Yolla said she typed out the document (a copy of which is Annexure I to Yolla Chidiac’s affidavit sworn 10 February 2010) on her computer at home and that the words in it were those which Mr Elias had said he wanted her to write (T 19). She said that she explained to her mother what the document was and she signed it. She said that she translated the words into Arabic for her mother. Yolla said that when she and her mother went to Mr Elias’ offices she gave the letter to him (which suggests that Yolla must have had some form of conversation with Mr Elias beforehand in which he had told her what kind of authority would be required as it seems there was only one joint visit to the office).

80 Yolla was cross-examined in some detail about the letter of authority and, in particular, the suggestion in it that her mother was not aware of any mortgage over the house (despite the fact that Yolla had deposed earlier, in her affidavit sworn 10 June 2009, at [15]), to a 2003 conversation in which the deeds of the house being put up as security for George’s loan was discussed). Yolla’s evidence was somewhat contradictory in this regard. She said (T 20.6) that her mother was not aware of what the mortgage was about. At T 21.7, Yolla said that “she did not know where the mortgage is at and what is happening. That is what she was trying to say to me.“ Although she said that her mother was present at the meeting in 2003 in which her father had said that he had put the house up for George and had said the words “the bank has the deeds to the house”, Yolla expressed the view that her mother, not knowing English, would not have known that that was a ‘mortgage’ (at T 22.41). “She would just know the house has been put up, there’s money taken from the house. That is all my mother would have known.” (T 22.42). Yolla then accepted (T 23.14) that her mother was aware of the mortgage but said that she was not aware at that stage of what had been paid or what had not been paid because no documents had been coming to the address (T 24.47) and that was what Yolla had understood to be the meaning of the letter saying that she gave permission for her daughter to investigate the mortgage on the house “because was not aware of it”.

81 The reliance placed by the defendants on this evidence seems to be to say that any suggestion that Rose was aware of a loan arrangement in place with George in respect of the National Australia Bank funds should be rejected in light of the letter of authority signed by her which asserted no knowledge of a mortgage (thus that this casts doubt on the evidence on which the estate relies for the assertion that there was such a loan arrangement). However, I am not persuaded that much weight can be attached to a letter of this kind, signed by Rose apparently in order to enable a solicitor to make enquiries in relation to a mortgage about which Rose had been receiving calls from the bank and the detail of which does not seem to have been put before Rose. Yolla said, and there seems no reason not to accept, that Rose had not previously dealt with the bank. It is understandable that Rose would have been concerned at receiving calls from the bank, even if she was aware in general terms of a loan arrangement with George, since she was by then in her early 70’s and her only income (other than any moneys given to her by George, who says he was giving her around $250 a week for some years) was a pension; particularly if she had (as Yolla says Rose had said) told George to repay the loan and he had refused to talk to her.

82 The lack of precision in the letter of authority (and the confusion evident in Yolla’s responses in the witness box when questioned on this letter) seems to me more likely to be a function of Yolla’s own lack of awareness at the time as to what arrangements had been made in relation to the funds borrowed from the bank (other than having a general understanding that this was ‘George’s loan’) and wanting to help her mother to find out exactly what the position was in relation to the bank. Yolla saw this letter as being an authority by her mother for Mr Elias to investigate the matter and seems unlikely to have focussed in detail on the content of the letter. My observation of the manner in which Yolla gave evidence was that she was unlikely to have given careful consideration to the terms of the letter of authority. It seemed to me that Yolla had a tendency to gloss over the detail and to answer questions by reference to the substance or effect of what she understood to be the case (such as when she proffered observations of her mother’s knowledge or understanding of a mortgage as if it were fact). However, my impression was that Yolla did so without attempting to avoid answering questions but earnestly in an endeavour to make clear to the court what she believed the position to be. Her responses tended to be given without hesitation and in an unguarded way (unlike, for example, the unforthcoming evidence of Peter Jnr).

83 The upshot of the meeting between Rose, Yolla and Mr Elias seems to have been that Mr Elias sent a letter (an unsigned copy of which, dated 16 November 2005, is Exhibit 1) to the National Australia Bank branch in Campsie, querying the mortgage over the Punchbowl property, in which he said “We are told that the Deceased [Peter Snr] did not borrow this amount [$320,000] or any other amount from your Bank. In fact, the Mortgage could not have been executed with the Deceased’s understanding as he was unable to read English” and requesting details of any interpreter’s certificate. The letter went on to note the writer’s instructions that the deceased did not receive the funds pursuant to the mortgage and asked for confirmation as to whether the loan amount was advanced and if so, to whom.

84 This letter was put to Yolla in cross-examination. Yolla said that she had said to Mr Elias that the money had been used for somebody else but had not been used for her father (T 29.5 – 29.33). It was put to Yolla that it was not accurate to say that the deceased did not receive the funds pursuant to the mortgage. Yolla’s position, stated forcefully in the witness box, was that “if he received it, I would have said he received it but he didn’t receive a cent. I will argue that point because to me that’s true” (T 29.35), there apparently drawing a distinction between moneys being made available by the bank (which they clearly were) and moneys being retained in Peter Snr’s hands or used for his personal benefit (which they clearly were not).

85 Yolla accepted that the 2003 conversation to which she deposed in her affidavit as to the discussion of the loan to George was not consistent with what Mr Elias had written to the bank in 2005 (T 30.40) (insofar as that earlier discussion referred to the deeds of the house being put up as security for a borrowing).

86 I understand that the defendants place reliance on this letter as casting doubt on Yolla’s account of the conversation with her parents in 2003 (in that, if Yolla or her mother had believed there to have been such a borrowing, the assertion to the contrary in a letter to the bank could not properly have been made). However, it does not seem that the text of this letter was approved by Yolla before it was sent out by Mr Elias. Yolla says that she understood Mr Elias to have been instructed to carry out an investigation of what had happened in relation to the monies. It may well simply be that Mr Elias misstated the scope of his instructions in this regard. (Viewed more cynically, it might suggest an attempt to sheet home responsibility for the making of the loan to the bank, by way of the claim that the mortgagor did not understand the transaction, even though loan funds had been provided by the bank, irrespective of who it was ho bore the liability within the family for that loan.) It does not seem to me that the challenge raised by Mr Elias, on Rose’s behalf, as to the validity of the bank loan necessarily leads to the conclusion that there was not an arrangement as between Peter Snr and George for the repayment of any moneys owing to the bank on that bank loan (although a claim against the bank on the evidence put before me would have been difficult to maintain).

87 In the circumstances, I do not think that the infelicitous way that instructions may have been given to Mr Elias in relation to this letter (leading him to believe that the money was not received by Peter Snr) or its suggestion that Peter Snr did not understand what was occurring (or its inconsistency with what Yolla says she had earlier been told by her father in relation to the loan) takes the matter very far. Relevantly, the conversation in 2003, to which Yolla deposed in relation to the alleged loan is not the sole evidence to support a finding that there was a loan arrangement of some kind in place between Peter Snr and his son in 2002/3 and the position taken vis a vis the bank in 2005 does not detract from the circumstances in which the loan was originally provided (which seem to me to provide the strongest support for the inference that there was a loan agreement in place at the time, albeit an informal one).

88 On 1 May 2006, Rose died. It was after the requiem mass, held forty days after her death, that matters between the siblings in relation to the National Australia Bank loan (and as to the new will) finally came to a head. Various accounts were given of what transpired on this occasion. The accounts of Yolla and each of her brothers (other than George) are broadly consistent. In summary, there seem to have been two catalysts for the argument (or arguments) which everyone (including George) seems to accept occurred on that occasion – first, the discovery by George that a new will had been made (and that Yolla had replaced his son, Peter Jnr, as executor) and, secondly, what was said by George (and the attitude displayed by him) in relation to the question of who was to be responsible for the repayment of the National Australia Bank loan secured over the Punchbowl property.

89 Yolla says that she, her husband, each of her brothers (George, Michael, Fred and Maurice) and two of George’s sons, Peter Jnr and Anthony, were present and that a conversation took place in which George said “Peter’s the executor but if you don’t want him you have to take him to court”; Fred asked about the house situation and George replied that ‘the home gets sold, the bank gets repaid and the rest gets divided by six’; that when someone said to George “you used the money for your wife’s house and car”, George said “I’m not on the documents, you can’t prove anything”; and that Michael then said “Mum’s made a will and Yolla’s the executor”.

90 Yolla says (in her affidavit sworn 10 June 2006) that George then said “the will’s wrong, it was a present from Dad, you ask him”. (The statement that the will being wrong is itself an interesting comment, since it seems unlikely that by then George would have had time to read the new will and in any event the new will itself made no reference to any loan – hence, if Yolla’s version is correct, George’s response seems quite defensive, to say the least.)

91 As noted, Rose’s final will, made on 17 January 2005, left the whole of her estate to her six children equally. There was no reference to any loan owing to the estate by George. The contentious change seems to have been the replacement of Peter Jnr (who had been nominated as executor in the previous will) with Yolla as the new executor. Yolla said she accompanied her mother to see Mr Elias about that will but did not help her mother give the instructions to Mr Elias; though she did correct a mistake Mr Elias had made (in that she says – T 35.45 – he had forgotten to put George’s name in the will at all!). At T 36.10, Yolla said that Mr Elias had said to her mother that ‘somebody has to be responsible for the estate’ and her mother said that she wanted Yolla to be the executor. Yolla said “she said she could only trust me to do the right thing by everybody” (T 36.23). Even accepting that this might be seen as evidence of a self-serving kind, there cannot be any suggestion that Yolla used any position of influence over her mother to obtain favourable treatment in terms of the testamentary dispositions, since the will dealt with all children equally.

92 Yolla accepted that George was not aware at the time her mother had died that there had been a new will (T 37.41). It was put to Yolla that in this particular conversation George had said “Peter is the executor” but that he had not said “if you don’t want him you have to take him to court” (the latter statement reflecting a rather confrontational stance, though one which would not be inconsistent with the confrontational stance George displayed consistently in the witness box). Yolla was adamant that he had gone on to say those words (T 37.18–37.29).

93 At T 38.11, Yolla agreed that her mother did not want George to know about the changes until she had died. Yolla accepted that one of her brothers (Michael) had pulled the will out of her coat pocket and put it down in front of Peter Jnr, and that it was a big surprise to Peter and George, but showed no concern in this regard as she said her mother did not want it to happen before she passed away (T 39).

94 Peter Jnr, somewhat argumentatively during his cross-examination, made the point that there was no change to the will in terms of the testamentary distributions and posed the rhetorical question that, if the loan was such a big deal, why was it not in the will? (Conversely it might be thought why bother making a new will if the estate is inevitably going to be consumed by the burden of the debt – which logically must at some point have been the case if there was no arrangement in place for any repayment of the borrowings.)

95 It seems to me that the absence of any reference to the National Australia Bank loan from the will is not inconsistent with an understanding on the part of Rose that the loan was to be repaid by George and would not have to be borne by the estate. Had it not been Rose’s understanding that George was repaying the loan, then one might have expected her either to include an explanation in the will as to why there was to be an equal distribution among the six siblings of the remaining equity in the home (notwithstanding the fact that George had already received a substantial benefit from his father out of that equity) or to take that gift into account when dividing the remaining estate between her children. Similarly, to answer Peter Jnr’s rhetorical question, the explanation for the making of a new will simply in order to change the identity of the executor might well be due to a wish to have someone so closely connected with George to deal with all the siblings equally, as seems to have been Yolla’s understanding for the change to the will.

David Securities Pty Ltd v Commonwealth Bank of Australia [1992] HCA 48;

225 In Lumbers v Cook, Gummow, Hayne, Crennan and Kiefel JJ, at [80] said that;

the bare fact of conferral of the benefit or provision of the service does not suffice to establish an entitlement to recovery

226 Mason, Carter and Tolhurst, in Mason & Carter’s Restitution Law in Australia, state, in a passage which has been approved by Campbell J in Wasada Pty Limited v State Rail Authority of New South Wales (No.2) [2003] NSWSC 987, at [16], (with respect to the same passage in the earlier 1995 edition), at [166]:

‘Unjust’ is the ‘generalisation of all the factors which the law recognises as calling for restitution’. Because we need to search for recognised factors, examination of which involves an analysis of case law, the reference to ‘injustice’, as an element of unjust enrichment, is not a reference to judicial discretion. Normal judicial processes are involved and it is only in cases where there is no recognised basis for saying that injustice has arisen that problems can arise.

227 As has been mentioned above, no such unjust factor has been identified. This is not a case where it is (or could have been) asserted that there was a total failure of consideration for the loan to George (as there has been part repayment thereof and it has been said that the action for debt based on a partial failure of consideration disappeared in the middles ages; Anon, (1293) Y.B 21-22 Edw. I. (R.S.) 110-111; per Baltic Shipping v Dillon, at 356); nor is it suggested that the payment was made to George (or the loan discharged by the estate) on the basis of some mistake of fact or law to which George was privy.

228 As far as the claim in restitution against Anthony is concerned, it too seems to be based on no more than the assertion of an unjust retention of the benefit obtained by the discharge of his obligation to the bank, without reference to any recognised factor rendering the retention of such a benefit unjust. In any event, in circumstances where no claim for contribution against Anthony by the estate can be established (given the apparent understanding on the part of Peter Snr that someone other than Anthony, ie George, would in fact be liable for the debt), it is difficult to see how Anthony is ‘unjustly’ enriched at the expense of the estate by the discharge of the loan obligation (though he clearly benefited from the discharge of that obligation).

229 Accordingly, I find that neither claim for recovery on the basis of unjust enrichment has been made out.

(iv) Is the claim for repayment of the loan or for restitution statute-barred?

230 Section 14(1)(a) of the Limitation Act provides as follows:

(a) a cause of action founded on contract (including quasi contract) not being a cause of action founded on a deed.

231 Section 63 extinguishes the right and title of the person formerly having the cause of action:

… on the expiration of a limitation period fixed by or under this Act for a cause of action to recover any debt damages or other money, the right and title of the person formerly having the cause of action to the debt, damages or other money is, as against the person against whom the cause of action formerly lay and as against his successors, extinguished.

232 On the issues as determined above, the defence based on the Limitation Act does not arise (as I have found that the loan was repayable on or within a reasonable time after the sale of the Belmore property) and I have not found that there is any claim in restitution. However, for completeness I consider whether, had I found otherwise on either issue, the Limitation Act defence would have been sustained.

233 Mr Rollinson submits that if the loan is one repayable on demand or if the case is one where a non-gratuitous benefit has been conferred such that there is an obligation to make restitution, then the cause of action arose immediately upon the payment by the bank to or for the benefit of Peter Snr in November 2002 and so the claim is statute barred.

Limitation period in respect of debt claim

234 Where there is a cause of action based upon an obligation to repay a loan that was repayable on demand, then, unless the making of the demand was a condition precedent to the obligation to pay arising (or the limited exception in banker/customer cases arises), the cause of action accrues when the loan is advanced. (In this regard, there may have been a distinction between the two separate advances made on behalf of George, ie as between the more substantial advance to pay for completion of Jasmine’s house purchase in November 2002 and the smaller advance to pay for her car in February 2003 advance such that the latter would not have become statute barred, even if that were an advance repayable on demand, by the time that these proceedings were commenced.)

235 In Young v Queensland Trustees Ltd [1956] HCA 51; (1956) 99 CLR 560; [1956] ALR 939, the High Court, noting that a loan of money payable on request creates an immediate debt, said (at 566-567):

Norton v Ellam

Collins v Benning

236 In Ogilvie v Adams, which I have referred to earlier, Fullagar J made it clear that the consequence of a loan being repayable on demand was that the cause of action became statute barred six years from the receipt of the money. The Queensland Court of Appeal, in Haller v Arye [2005] QCA 224; (2005) 2 Qd R 410, analysed the reasoning in Ogilvie v Adams; at [26] – [30] and canvassed a number of authorities which had accepted the ratio in that decision as a correct statement of the law (including CE Heath Underwriting & Insurance (Australia) Pty Ltd v Daraway Constructions Pty Ltd per Batt J, Drinkwater v Caddyrack Pty Ltd (No 3), per Young J (as his Honour then was), Brott v Grey, Switz Pty Ltd v Glowbind Pty Ltd, and Mackenzie & Anor v Albany Finance Ltd^, per McLure J).

237 Consideration was given, in Haller, at [31] to an argument advanced before Nettle J in VL Finance Pty Ltd v Legudi [2003] VSC 57; (2003) 54 ATR 221, to the effect that the position adopted in Ogilvie should now be taken to have been relaxed and that the appropriate test was to consider whether it was reasonably open to infer that the parties would have agreed that the cause of action to recover the money loaned would not accrue until a demand had been made (reference having been made to the decision of Bryson J (as his Honour then was) in Gleeson v Gleeson [2002] NSWSC 418 as well as to the decision of the Full Court of South Australia in Re Brookers; Brooker v Pridham (1986) 41 SASR 380, at 382).^. The Queensland Court of Appeal noted that Nettle J had rejected the submission and it adopted his Honour's analysis in that regard, concluding that the review of the case law by Nettle J confirmed that “the principle in Ogilvie, in its full rigour, remains securely established in our commercial law”.

238 More recently, in Faraday v Rappaport [2007] NSWSC 34, White J stated at [102]:

Young v Queensland Trustees Ltd

Ogilvie v Adams

Haller v Ayre

239 Therefore, had this been a loan repayable on demand, without more, the cause of action by the estate suing upon the debt at least in respect of the initial November 2002 advance, would be statute barred. However, account must also be taken of s 54 of the Limitation Act which provides, relevantly, that:

(1) Where, after a limitation period fixed by or under this Act for a cause of action commences to run but before the expiration 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 the purposes of this section:

(a) a person confirms a cause of action if, but only if, the person:

(ii) makes, to a person having (either solely or with other persons) the cause of action, a payment in respect of the right or title of the person to whom the payment is made, (my emphasis)

240 Specifically, s 54(2)(ii) will operate in this case to extend the commencement of the relevant limitation period if the payment by George to Peter Snr of the sum of $160,000 is a payment to the person having the cause of action and in respect of the rights of that person in relation to the loan by excluding from the reckoning of the limitation period the time prior to 30 July 2003. (Unlike the position where the confirmation is said to arise from an acknowledgment, it is not necessary for there to be any writing or for specific language to be used.)

241 As the application of s 54 of the Limitation Act had not been referred to in the submissions at hearing, after the close of the hearing I invited brief submissions from Counsel as to the operation of that section if it were to be the case that I found that the loan was repayable on demand.

242 Mr Rollinson submitted that the part payment of $160,000 by George into the joint loan account of Peter Snr and Anthony did not constitute a confirmation of Peter Snr’s cause of action (assuming that such a cause of action were found to exist) within s 54(2)(a)(ii) on the basis that it was not a payment to the person having the cause of action in respect of the right or title of that person.

243 Mr Rollinson further submitted that a payment will only have the necessary character as a confirmation, for the purposes of s 54(2)(a)(ii), if it amounts to a non-verbal admission that there is a debt due (relying there upon Chethams v Remington & Co [1999] 3 VR 258; [1999] VSC 150). Mr Rollinson submitted that the payment made by George to the joint loan account of Peter Snr and Anthony did not constitute a non-verbal admission that there was a debt due to Peter Snr, and had not the hallmarks of a payment made to discharge some liability of George to his father. This submission rests largely on the basis that the payment was made not to the alleged creditor, Peter Snr, alone, but rather was made to Peter Snr and a third party (Anthony).

244 It is said that it could equally be inferred, by reference to the deposit slip (that being the only contemporaneous document) that this was a loan by George to Peter Snr and to Anthony or a gift to Peter Snr (as George contends). As to the suggestion that this was a loan to Peter Snr and Anthony, there is nothing to suggest any such scenario and it is inconsistent with what George himself says about the payment (as Mr Rollinson’s submission implicitly concedes). No evidence was adduced from Anthony to suggest that any loan had been made to him by his father in mid 2003, nor does he suggest that he ever treated the joint loan account as being one in which he had any interest.

245 In Chethams v Remington, the Supreme Court of Victoria found that a part payment made by the respondent law firm, using trust moneys held on behalf of a client, in respect of a debt owing by the respondent law firm to a UK law firm (for work done for that client), was not an acknowledgement or part payment by the respondent law firm of a debt owed by the firm which was capable of constituting evidence of an admission of liability for the debt on the part of the respondent law firm. Consequently, the Victorian counterpart to s 54 did not apply to delay time from running.

246 Unlike the position here, in Chethams v Remington, the issue centred upon whether a payment made by one person using moneys held on trust for another could constitute an acknowledgement or otherwise be an admission of liability for a debt owing by the payer to the payee. Here, the issue is whether a payment by one person using his own moneys to pay money to a joint account can be said to have the character of a non-verbal admission of liability for a debt owed only to one of the joint accountholders.

247 In Chethams v Remington, reference was made to the observation by Kerr J, in Surrendra Overseas Limited v Government of Sri Lanka (The Apjakash) [1977] 2 All ER 481, (at 490) that:

A part payment, like an acknowledgment, can only revive the cause of action and start time running afresh if it provides evidence in the form of an admission by the debtor that the debt remains due despite the passage of time … (at 491) a part payment, like an acknowledgement must be evidence of an admission of liability for the debt claimed.

248 In Surrendra Overseas Ltd v Government of Sri Lanka, the question as to whether a part payment constituted a confirmation of debt under the Limitation Act 1939 (UK), followed the payment by charterers of an amount which represented the total of the amount for which they conceded liability in a dispute with the owners arising under a charter party. The charterers had contended that they had a cross-claim against the owners and paid what they contended to be the sum due after setting off their cross-claim. Kerr J considered it fatal to the owners’ claim that this amounted to a confirmation that this was not a payment ‘in respect of’ the owners’ claim at all, rather “It purported to be, and was, a payment of the only sum which the charterers admitted to be due. It was not on account; not a part-payment of any kind”, going on (after the passage cited in Chethams, to say (at 490 – 491):

Cottam v Partridge

249 Kerr J referred to the following passage of Buckley J in Re Footman Bower & Co Ltd [1961] 2 All ER 161, at 164, in which his Lordship noted that it was no longer necessary (under the legislation there applicable) that a payment amount to both an acknowledgement of a debt and import a new promise to pay the outstanding balance, only the former remaining as necessary in order to amount to a confirmation, but nevertheless commenting that “one must still look at the act and intention of the debtor to see whether the payment is made in respect of the particular debt ... “

250 In Stage Club Ltd v Miller Hotels Pty Ltd (1981) 150 CRL 535, similarly, Gibbs CJ, at 544, considering a question as to whether the reference in the balance sheet of the debtor to the creditor as a secured creditor constituted an acknowledgement of the debt under the Limitation Act, noted that under the Act, it was not necessary that any promise to pay should be express or implied but that what was necessary was that there be a recognition of the present existence of the debt (“'an admission that there is a debt ... outstanding and unpaid': Good v Parry [1963] 2 QB 418 at 423."). This was held to be the position under the Western Australian counterpart to s 54 in Cameron (as Executrix of the Will of Alexander Donald Robert Gordon Cameron (Dec)) & Ors v Murdoch (as Administratrix of the Estate of James Cameron (Dec)) & Ors [2003] WASC 264.

251 It was submitted for the estate that the payment of $160,000 made by George to the loan account held jointly by Peter Snr and Anthony constitutes a confirmation within s 54(2)(a)(ii), citing the decision in Gleeson v Gleeson.

252 In Gleeson v Gleeson, Bryson J (as his Honour then was) considered a similar issue. There, no acknowledgment in writing had been made. His Honour accepted, however, the plaintiff’s account that the defendant had said that he would make certain payments in lieu of the interest that had been running on the mortgage and that the defendant had done so. His Honour stated that, at [52] – [53]:

The substance of the events was that he [the defendant] made the payments to the electricity authority, telephone company and the cleaning lady at the direction of the plaintiff, and it is clear from the terms of the arrangements that the payments were made in respect of the plaintiff’s right or title under the mortgage.

253 Here, the payment of $160,000 was made directly to the joint loan account in the names of Peter Snr and Anthony. The facts in this case are distinguishable from the facts in Ostabridge Pty Ltd (In Liquidation)(Receiver & Manager Appointed) v Stafford & Ors [2001] NSWCA 335 (where a confirmation did not exist in respect of certain payments made, on the basis that such payments were made in respect of different debts owing to those which were sought to be enforced). Here, the sole purpose of the borrowing was to provide Peter Snr with funds to make available to George. Anthony, as he made very clear in the witness box, had nothing to do with the account (beyond signing a withdrawal slip in February 2003) and considered it to be none of his business. He did not even bother to open the monthly bank statements. In those circumstances it cannot sensibly be suggested that George’s payment of $160,000 was in respect of a different debt or was, in any practical sense, a payment made to Anthony. Rather, it was to discharge George’s obligation to Peter Snr referable to the provision of funds from that loan account.

254 I have found that there was a loan arrangement in place pursuant to which George was obliged to make repayment of the National Australia Bank loan funds. Although not accompanied by any statement acknowledging that the payment was to discharge part of that obligation, it clearly had that effect and I would infer that it was made in recognition that the debt was outstanding and unpaid. I am satisfied that this was not a ‘gratuitous’ payment or gift to Peter Snr (and Anthony) but was a payment referable to the loan arrangement in place in order to discharge part of the borrowings the subject of that loan. Accordingly, had this issue arisen for determination I would have been satisfied that this payment amounted to confirmation within the meaning of s 54(2)(ii) of the Limitation Act so as to extend the operation of the statutory limitation period.

255 I note that s 54 was not expressly pleaded in answer to the claim that any debt was statute barred. It was not suggested, however, that it was not open to me to consider the operation of that section. The claim that the debt was statute barred was clearly in issue in the proceedings and the allegation that the repayment on 30 July 2003 was in part performance of the alleged agreement was clearly pleaded. The facts on which, as a matter of law, the limitation period was extended were thus clearly before the court and Counsel for both sides have been given the opportunity to make submissions thereon.

256 Had I found this to be a loan repayable on demand, and had it then been necessary for me to consider whether that was statute barred, I would have found that the cause of action against George on the loan was not statute barred, by reason of the operation of s 54 of the Limitation Act, the payment of $160,000 having constituted a confirmation of the debt then owing to Peter Snr.

Limitation periods in respect of restitutionary claims

257 Given that I have not found that there is a liability to make restitution of the loan monies by reference to any principles of unjust enrichment, the question whether such a claim is statute barred does not arise. However, for completeness I note that Mr Rollinson again contends that any such cause of action would have arisen when the first payment was drawn down under the loan facility in November 2002.

258 In Torrens Aloha Pty Ltd v Citibank NA [1997] FCA 77; (1997) 72 FCR 581; (1997) 144 ALR 89; (1997) 35 ATR 36 (per Sackville J, with whom Forster and Lehane JJ agreed), his Honour held that a cause of action for a restitutionary claim, where the unjust retention of the benefit is based on a failure of consideration, arises upon payment of the money or the receipt of the benefit:

facts

Commonwealth v Dixon

Baker v Courage & Co

; In re Mason

Brooksbank v Smith

Denys v Shuckburgh

Preston and Newsom on Limitation of Action

the mistake

Phillip-Higgins v Harper

Mason and Carter

David Securities

the payer's right to recover the amount paid accrues at the moment when the payee received the money

At the very least, the authorities provide no support for the contention that the cause of action does not accrue until the courts acknowledge that the facts alleged give rise to a cause of action.

259 Thus any claim based on unjust enrichment referable to the receipt of the initial benefit of the loan would be statute barred. Had there been a basis on which to contend that the retention by Anthony of the benefit of the discharge of his liability to the bank was unjust, then such a claim would not appear to be statute barred, having arisen at the time of receipt of that benefit.

Conclusion

260 For the reasons set out above, I find that, as the legal personal representative of Peter Snr, Yolla is entitled to recover from George, for the benefit of Peter Snr’s estate, the moneys paid by the estate to discharge the National Australia Bank loan and interest thereon from the date of the demand made for repayment of that amount.

261 I am not satisfied that Anthony has any liability to the estate based on a right of contribution as between Peter Snr and the estate, because (although he and Peter Snr had co-ordinate liabilities) it seems to me that the understanding of Peter Snr at the relevant time was that it was George, not Anthony, who would be responsible for the repayments on the loan.

262 I am also not satisfied that the estate has established a claim based on unjust enrichment against either George or Anthony.

263 Accordingly, the orders I make are as follows:

2. I dismiss the plaintiff’s claims against the second defendant.

264 I will hear any submissions from Counsel which they may wish to make before making any final costs orders.

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Citations

Chidiac v Maatouk [2010] NSWSC 386

Most Recent Citation

Briggs v Jones [2013] SADC 42

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30

CHRISTOS & CHRISTOS [2014] FamCA 535

DAMIANI & DAMIANI [2012] FamCA 535

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Lumbers v W Cook Builders Pty Ltd (in liq) [2008] HCA 27

CITATION:	Chidiac v Maatouk [2010] NSWSC 386
HEARING DATE(S):	18, 19 February 2010
JUDGMENT DATE :	4 May 2010
JURISDICTION:	Equity
JUDGMENT OF:	Ward J
DECISION:	1. Order the first defendant pay to the plaintiff, for the benefit of the estate of the late Peter Maatouk Snr the sum of $246,540 plus interest from the date on which demand for repayment was made to date. 2. Dismiss the plaintiff’s claims against the second defendant. 3. Stand over for submissions on costs.
CATCHWORDS:	LOAN - payment of money held to be made under an enforceable loan agreement between plaintiff and first defendant - first defendant ordered to repay loan amount - CONTRIBUTION - principles concerning doctrine of contribution - no right of contribution in absence of common intention between co-borrowers that second defendant be responsible for repayment - UNJUST ENRICHMENT - claims based on unjust enrichment fail - not sufficient merely to show receipt of benefit by first and second defendants - necessary to establish basis on which retention of benefit unjust - LIMITATION OF ACTIONS - date of accrual of cause of action based on a debt or unjust enrichment - existence of confirmation of debt and operation of s 54 of Limitation Act - proceedings commenced within limitation period - PLEADINGS - necessary to plead factors giving rise to claim for unjust enrichment
LEGISLATION CITED:	Limitation Act 1969 (NSW)
CASES CITED:	Albion Insurance Co Ltd v GIO (NSW) [1969] HCA 55; (1969) 121 CLR 342 Anon, (1293) Y.B 21-22 Edw. I. (R.S.) 110-111 Baltic Shipping Company v Dillon [1993] HCA 4; (1993) 176 CLR 344; (1993) 111 ALR 289 Bhupinder Sekhon v Sharangjit Cour Sekhon [2007] NSWSC 875 BP Petroleum Development Ltd v Esso Petroleum Co Ltd [1987] SLT 345 Brott v Grey [2000] FCA 1727 Burke v LFOT Pty Ltd [2002] HCA 17; (2002) 209 CLR 282; (2002) 187 ALR 612 Capita Financial Group Limited v Rothwells Limited (1993) 30 NSWLR 619 Clune v Collins Angus & Robertson Publishers Pty Limited (1992) 25 IPR 246 Cockburn v GIO Finance Ltd (No 2) [2001] NSWCA 177; (2001) 51 NSWLR 624 Coshott v Lenin [2007] NSWCA 153 Coulls v Bagot’s Executor & Trustee Co Limited (1967) 119 CLR 460 David Securities Pty Ltd v Commonwealth Bank of Australia [1992] HCA 48; (1992) 175 CLR 353 Dering v Earl of Winchelsea (1787) 1 Cox 318; 29 ER 1184; [1775-1802] All ER Rep 140 Dinsdale bht Protective Commissioner v Arthur [2006] NSWSC 809; (2006) 12 BPR 23,514 Faraday v Rappaport [2007] NSWSC 34 Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; (2007) 230 CLR 89; (2007) 236 ALR 209 Forgeard v Shanahan (1994) 35 NSWLR 206 Gleeson v Gleeson [2002] NSWSC 418 Haller v Arye [2005] QCA 224; (2005) 2 Qd R 410 Hoy Mobile Pty Ltd v Allphones Retail Pty Ltd (No 2) [2008] FCA 810; [2008] ATPR 42-240 Jones v Padavatton [1969] 1 WLR 328 Ingram v Ingram [1941] VLR 95 Lactos Fresh Pty Ltd v Finishing Services Pty Ltd (No 2) [2006] FCA 748 Lewis v Lewis & Anor [2001] NSWSC 321 Lumbers v W Cook Builders Pty Limited [2008] HCA 27; (2008) 232 CLR 635; (2008) 247 ALR 412 Makita (Australia) Pty Limited v Sprowles (2001) 52 NSWLR 705 Malco Engineering Pty Limited v Ferreira & ors (1994) 10 NSWCCR 117 Muschinski v Dodds [1985] HCA 78; (1985) 160 CLR 583 Official Trustee in Bankruptcy v Citibank Savings Ltd (1995) 38 NSWLR 116 Ogilvie v Adams [1981] VR 1041 Pavey & Matthews Pty Ltd v Paul [1987] HCA 5; (1987) 162 CLR 221 Plunkett v Bull (1915) 19 CLR 544 Re Brookers (Aust) Ltd (in liq); Brooker v Pridham (1986) 41 SASR 380 Re Hodgson (1886) 31 Ch D 177 Switz Pty Ltd v Glowbind Pty Ltd [2000] NSWSC 222 Torrens Aloha Pty Ltd v Citibank NA [1997] FCA 77; (1997) 72 FCR 581; (1997) 144 ALR 89; (1997) 35 ATR 36 VL Finance Pty Ltd v Legudi [2003] VSC 57; (2003) 54 ATR 221 Vukic v Luca Grbin and Ors; Estate of Zvonko Grbin [2006] NSWSC 41 Wasada Pty Limited v State Rail Authority of New South Wales (No.2) [2003] NSWSC 987 Watson v Foxman (1995) 49 NSWLR 35 Weeks v Hrubala [2008] NSWSC 162 Young v Queensland Trustees Ltd [1956] HCA 51; (1956) 99 CLR 560; [1956] ALR 939
TEXTS CITED:	Dal Pont & Chalmers, Equity and Trusts in Australia 4th edn, Lawbook Co., 2007 Mason, Carter and Tolhurst, Mason & Carter’s Restitution Law in Australia, 2nd edn Butterworths, 2008 (1st edn, Butterworths, 1995) Meagher, Gummow & Lehane, Equity Doctrine and Remedies 4th ed, Butterworths, 2002 Tyler E., Young P., Croft C., Fisher & Lightwood's Law of Mortgage, Butterworths, 2005
PARTIES:	Yolla Chidiac (Plaintiff) George Maatouk (First Defendant) Anthony Maatouk (Second Defendant)
FILE NUMBER(S):	SC 2008/00282252
COUNSEL:	K F Morrissey (Plaintiff) M K Rollinson (Defendants)
SOLICITORS:	Stockman & Evans (Plaintiff) Thomas Booler & Co (Defendants)