Clarke v Bridgman - [2013] WADC 80

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION: PERTH

CITATION: CLARKE -v- BRIDGMAN [2013] WADC 80

CORAM: DAVIS DCJ

HEARD: 8 APRIL 2013

DELIVERED : 29 MAY 2013

FILE NO/S: CIV 1025 of 2012

BETWEEN: BRUCE RICHARD CLARKE
Plaintiff
AND
MARK BRIDGMAN
Defendant

Catchwords:

Practice and Procedure - Summary judgment - Defendant's appeal from registrar granting summary judgment to plaintiff - Whether defendant's version of facts inherently incredible - Whether acknowledgment of debt is a deed - Whether consideration for acknowledgment of debt - Turns on own facts

Legislation:

Nil

Result:

Appeal dismissed

Representation:

Counsel:

Plaintiff: Mr P R MacMillan
Defendant: Mr H H Jackson

Solicitors:

Plaintiff: Gibson Lyons
Defendant: GV Lawyers

Case(s) referred to in judgment(s):

Butcher v Lachlan Elder Realty Pty Ltd [2004] HCA 60; (2004) 218 CLR 592
Campbell v Backoffice Investments Pty Ltd [2009] HCA 25; (2009) 238 CLR 304
Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337
Commonwealth Bank of Australia v Wallis & Graham (1995) ATPR 41-387
Dean & Westham Holdings Pty Ltd v Lloyd (1991) 3 WAR 235
Eng Mee Ong v Letchumanan [1980] AC 331
Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87
Grainger v Williams [2009] WASCA 60
Hercules Motors Pty Ltd v Schubert (1953) 53 SR (NSW) 301
Lathwell v Stabil Pty Ltd (in liq) [2001] WASCA 295
McDermott v Black (1940) 63 CLR 161
Monarch Petroleum NL v Citco Australia Petroleum Ltd [1986] WAR 310
Morgan v Pallister [2004] WASC 188
Moscow Narodny Bank Ltd v Mosbert Finance (Aust) Pty Ltd [1976] WAR 109
National Westminster Bank plc v Daniel [1994] 1 All ER 156
Scolio Pty Ltd v Cote (1992) 6 WAR 475
Scook v Premier Building Solutions Pty Ltd (2003) 28 WAR 124
Swanzone Pty Ltd (in liq) v Prosperity Development (Aust) Pty Ltd [2005] WASC 7
Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165
Webster v Lampard (1993) 177 CLR 598
Western Export Services Inc v Jireh International Pty Ltd [2011] HCA 45; (2011) 282 ALR 604
Westwind Air Charter Pty Ltd v Hawker De Havilland Ltd (1990) 3 WAR 71

DAVIS DCJ: In 2011 Mr Clarke carried on the business of design, supply and manufacture of farming and agricultural products. His products were manufactured in China on his order, using his design.
While sourcing factories in China which could manufacture his products, Mr Clarke met Scarlett Wang, who is also known as Yaya, from a Hong Kong registered company in China called Rhautomation International Co Ltd (Rhautomation). Mr Clarke struck up a business relationship with her and she assisted him in sourcing a manufacturer in China for his products. Orders for Mr Clarke's products were then placed through Rhautomation. Rhautomation invoiced Mr Clarke for the products.
Ms Wang's partner was the defendant, Mr Bridgman. (Mr Bridgman describes her as his fiancé). Mr Bridgman, who lives in Victoria, carried on the business of the technical design of single phase to three phase electrical power converters under the business name 'Phase Change Converters'. In late 2011, after Mr Bridgman expressed an interest in selling Mr Clarke's large commercial feeders in the eastern states, Mr Bridgman received some of Mr Clarke's universal feeders for sale from Mr Bridgman's business in Victoria.
On 29 December 2011 Mr Clarke and Mr Bridgman each signed a document which has been described as an acknowledgment of debt. The document stated as follows:
This to confirm that Mark Bridgman of Phrase Change Converters, Melbourne, owes Bruce Richard Clarke, Goomalling WA $77,500 cash for the supply of 100 completed sets of Large Universal Feeders supplied in 2011, excluding royalty fees.
The outstanding royalty fees for the supply of the abovementioned feeders are to be reimbursed on 1 June 2012, combined with any other outstanding royalties accrued to the said date.
The repayment of this loan is as follows:
1 March 2012 - $38,750
1 April 2012 - $38,750
On 1 June 2012 all royalty monies owing to B.R. Clarke & Co for supplying Universal Feeder products to Mark Bridgman is to be paid in full. On this day 29 December 2011 the current outstanding amount is $19,500 which is to be paid on the above date plus any further royalties accumulated.
Failure to pay on appropriate times as stated above will incur interest at a rate of 15% per annum from the specified due dates, plus any costs incurred for the reimbursement of debt.
Upon signing this document all other agreements signed regarding the repayment of the loan for 100 large universal feeders supplied in 2011 by Bruce Richard Clark to Mark Bridgman becomes null and void.
This document, which for ease of reference I will refer to as the acknowledgment of debt, was drawn up by Mr Clarke's son, who is not a lawyer. It was signed by Mr Bridgman and Mr Clarke and their signatures were witnessed.
When the two payments of $38,750 were not made, Mr Clarke commenced proceedings by writ issued on 4 April 2012 seeking the total sum of $77,500. (This action does not concern the issue of royalties).
In July 2012 after the filing of a statement of claim, Mr Clarke applied for summary judgment based on the acknowledgment of debt. The application for summary judgment came on for hearing before Deputy Registrar Kingsley on 18 September 2012. He granted the application for summary judgment.
Mr Bridgman now appeals from that decision. Pursuant to District Court Rules 2005 O 15(6) this appeal takes place as a new hearing of the summary judgment application. I am to determine it on both the evidence before the registrar and also two further affidavits which the parties were given leave to file and serve before the hearing of this appeal.

Principles on summary judgment application

It is well established that the power to order summary judgment should be exercised with great care and should never be exercised unless it is clear there is no real question to be tried: Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87, 99.
Where a plaintiff has satisfied all the requirements of O 14 to give him prima facie the right to an order in the terms asked the burden shifts to the defendant to satisfy the court why judgment should not be given against him: Moscow Narodny Bank Ltd v Mosbert Finance (Aust) Pty Ltd [1976] WAR 109, 110; Westwind Air Charter Pty Ltd v Hawker De Havilland Ltd (1990) 3 WAR 71, 74. This is an evidentiary burden; the overall legal burden of persuasion remains on the plaintiff: Morgan v Pallister [2004] WASC 188 [4].
The defendant must show by affidavit or otherwise that there is some triable issue either of fact or law, and that he has an arguable defence or a defence on the merits: Moscow Narodny Bank Ltd v Mosbert Finance (Aust) Pty Ltd (110 ‑ 111).
The defendant's affidavit must condescend to particulars by giving evidence of definite facts pointing to the basis on which the defendant alleges his right to defend arises: Moscow Narodny Bank Ltd v Mosbert Finance (Aust) Pty Ltd (113).
Where there are disputed facts and in the absence of cross‑examination the application is to be determined on the basis that the defendant's version of the facts, assuming that it is not inherently incredible, would ultimately be accepted at the trial of the action: Webster v Lampard (1993) 177 CLR 598, 608.
Although it is not appropriate to attempt to resolve conflicts of evidence on affidavit, this does not mean that the court is bound to accept uncritically as raising a dispute of fact which calls for further investigation every statement on an affidavit however equivocal, lacking in precision, inconsistent with undisputed contemporary documents or other statements by the same deponent, or inherently improbable: Eng Mee Ong v Letchumanan [1980] AC 331, 341; Lathwell v Stabil Pty Ltd (in liq) [2001] WASCA 295 [27] (Wheeler J); Swanzone Pty Ltd (in liq) v Prosperity Development (Aust) Pty Ltd [2005] WASC 7 [20] (Master Newnes, as he then was). Any decision that a defendant's affidavits are inherently improbable must be made by reference to the particular defendant and to any evidence which may exist as to that defendant's circumstances: Lathwell v Stabil.
If the evidence of a defendant is not credible then there is no fair or reasonable probability of the defendant having a defence, and summary judgment should be granted to the plaintiff: National Westminster Bank plc v Daniel [1994] 1 All ER 156, 159; Commonwealth Bank of Australia v Wallis & Graham (1995) ATPR 41-387.

Matters which are not in dispute

There is no dispute that Mr Bridgman received the 100 feeders referred to in the first paragraph of the acknowledgment of debt.
There is no dispute that the feeders were manufactured by Rhautomation and that Rhautomation invoiced Mr Clarke for those feeders.
There is no dispute that Mr Clarke paid for those feeders which Mr Bridgman received.
Mr Bridgman acknowledges that he signed the acknowledgment of debt document and that he has not paid the sums totalling $77,500.

Factual matters which are in dispute

There is a dispute on the facts as to what the arrangement was made between Mr Clarke and Mr Bridgman for the supply to Mr Bridgman of the feeders before the acknowledgement of debt was signed.
Mr Clarke's position is that he believed that Mr Bridgman would be paying the invoices from Rhautomation for the supply of the 100 feeders. Mr Clarke paid them because pressure was put on him by Rhautomation to do so, with Ms Wang indicating to him he would not be receiving delivery of any further products unless payment was made. Mr Bridgman agreed to the payment plan in the acknowledgment of debt after discussions, and Mr Bridgman conceded that he owed the money. It was on this basis that the acknowledgment of debt was signed.
Mr Bridgman's position is that he did not owe Mr Clarke the $77,500. Mr Bridgman claims that it was agreed with Mr Clarke that Mr Bridgman would pay a royalty of $200 for each feeder he sold but that there was to be no cash payment for the supply of the feeders.
In the proposed defence and counterclaim which has been prepared for the purpose of this appeal (annexure MB9 to the affidavit of Mr Bridgman sworn 24 January 2013) it is pleaded (par 2) that on or about 17 November 2011 the plaintiff and defendant orally agreed (the Agreement) that:
(a)the plaintiff was to provide to the defendant in Melbourne 100 large universal feeders;
(b)the defendant was to on sell the feeders to Rural‑Co;
(c)the plaintiff was to be paid a royalty of $200 for each feeder, the sale of which Rural‑Co the defendant facilitated to a maximum royalty of $30,000 if all 100 feeders were on sold; and
(d) the royalty was to take the form of a credit of $200 (per feeder) for the plaintiff with Rhautomation.
If Mr Bridgman did not owe $77,500 to Mr Clarke, why did he then sign the acknowledgment of debt? The explanation given is that Mr Bridgman only signed the acknowledgement of debt as a result of representations made to him by Mr Clarke executing another agreement with Rhautomation on 29 December 2011 for the exclusive supply of agricultural equipment by Rhautomation to Mr Clarke (which Mr Bridgman has called the 'supply agreement'). These representations are set out in par 9 of the proposed defence and counterclaim where it is alleged that Mr Clarke:
(a)executed the supply agreement in good faith (the first representation);
(b)intended at the time of its execution to perform the supply agreement (the second representation);
(c)would source all agricultural equipment from China from the company (Rhautomation) (the third representation); and
(d)in sourcing agricultural equipment from China from the company would not use the services or involve one Fish Yu (the fourth representation).
It is alleged that the representations were misleading and deceptive because the supply agreement was not executed by Mr Clarke in good faith and at the time he did not intend to perform that agreement. Following the execution of the supply agreement, Mr Clarke only placed one order with Rhautomation and started using Fish Yu for the supply of agricultural equipment. Accordingly, it is alleged that the representations were misleading or deceptive or likely to mislead or deceive contrary to s 18(1) of sch 2 Competition and Consumer Act 2010 (Cth) and insofar as the representations relate to future conduct, there is reliance on s 4(1) of sch 2 of the Act.
It is alleged that Mr Bridgman suffered loss and damage, the loss being the sum of $77,500 the subject of the plaintiff's claim in the proceedings. Finally, a counterclaim is made seeking declarations that the acknowledgment of debt is void or alternatively is unenforceable pursuant to s 242(a) and (c) of sch 2 of the Act.

The position of the defendant

It is submitted on behalf of Mr Bridgman that there is a serious issue to be tried and that the orders of the deputy registrar should be set aside and unconditional leave be given to Mr Bridgman to defend the case because the acknowledgement of debt:
(a)is not an acknowledgment of debt as there was no existing debt to acknowledge. This appears to have been put on two bases. The first is Mr Bridgman says he did not have any indebtedness because of what he says was the Agreement he had with Mr Clarke. The second is that the indebtedness specified in the acknowledgement of debt is in the nature of an unpaid loan and Mr Clarke did not make any loan to Mr Bridgman nor was Mr Bridgman indebted to Mr Clarke in the sum of $77,500 pursuant to a loan or on any other basis.
(b)is not supported by consideration and any consideration is past consideration;
(c)is unenforceable because Mr Clarke paid Mr Bridgman's debt to a third party. There was no assignment of the debt. There is no contractual basis for the respondent claiming the relevant funds from Mr Bridgman, and there is no Australian authority for such claim being brought on a restitutionary basis; and
(d)is unenforceable by reason of Mr Clarke's misleading and deceptive conduct.
Given the way in which Mr Bridgman's proposed defence is pleaded, what is set out in his affidavits, and the submissions which were made during the hearing of this appeal, Mr Bridgman has suggested to this court that he would receive the feeders and, without paying for them, keep the proceeds and only pay a royalty of $200 per feeder to Mr Clarke.
In other words, the whole basis upon which Mr Bridgman denies that he is liable for the sum of $77,500 and argues that the acknowledgement of debt is not enforceable rests upon his contention that he is not responsible for the cost of the feeders supplied to him. In the particular circumstances of this appeal and in particular Mr Bridgman's own circumstances this must be looked at critically.
It is necessary for me to consider whether the version of facts he has put forward is not inherently incredible.

Is the defendant's version of facts 'not inherently incredible'?

Mr Bridgman on his own description is an experienced business man. In par 4 of both his affidavits sworn 30 August 2012 (Mr Bridgman's first affidavit) and 24 January 2013 (Mr Bridgman's second affidavit) he deposes to the business that he has been carrying on since 2004 and the fact that the products which he has designed and manufactured through Chinese suppliers are sold to numerous countries around the world. He also discusses 'my many years of experience in China' (par 7 of his affidavits).
From Mr Bridgman's affidavits he was the one who approached Mr Clarke about selling his feeders. Mr Bridgman specifically states in both affidavits (par 9) that he had a discussion with Mr Clarke about selling the sheep feeders in the Eastern States because 'I saw this as a sideline which could compliment [sic] my existing business in Australia.'
I do not propose to repeat all of what is set out in Mr Bridgman's evidence, particularly issues to do with Rhautomation, but will focus on key aspects relating to the alleged agreement as pleaded in the proposed defence and counterclaim.
There are two main aspects of Mr Bridgman's claim which in my view demonstrate an inherent incredibility in his evidence that he owed no money to Mr Clarke for the supply of the feeders.
The first aspect relates to the evidence of Mr Bridgman that he would replace the feeders supplied to him with high grade feeders ordered through Rhautomation, which would be provided to Mr Clarke. In support of this, Mr Bridgman relies on handwritten notes annexed to both of his affidavits (annexure MB1) which he said were notes Mr Clarke took at a meeting between them on 17 November 2011. In Mr Bridgman's words in both of his affidavits par 13:
The notes make it clear in point 3 that there was no requirement for the exchange of any cash for the 100 sheep feeders that were going to be diverted.
Mr Bridgman further states in relation to the notes in par 14 of his affidavits:
The comment at item 4 ('Hence Mark-Yaya owe Bruce') was a note made to reflect the agreement that Yaya and I will owe the Plaintiff in the sense that we were to replace the 100 sheep feeders that had been ordered by the Plaintiff and were coming out of China.
Mr Clarke, in his second affidavit sworn 10 September 2012 in response to Mr Bridgman's first affidavit par 13, accepted that an agreement was entered into for the payment of royalties (which was superseded by the terms of the acknowledgment of debt) and appears to admit that he made the notes, but his position remains that Mr Bridgman was to pay for the feeders.
Strictly speaking, the handwritten notes are not admissible, as they are secondary evidence. No objection has been taken, however, to Mr Bridgman's reference to and annexure of the notes and since argument has proceeded on the basis of these notes I will have regard to what is recorded in them.
For the following reasons I find that the notes do not record, as Mr Bridgman would have the court believe, that he was not going to pay for the feeders which were delivered to him and would only owe Mr Clarke 'in the sense' that he would replace those feeders.
The notes record 150 feeders; point 1 recording 'Have 50 feeders' and point 2 recording 'Redirect 100 feeders (on water) Perth to Melbourne'. Point 3 records 'Balance of part of 100 to Melbourne = 150'. There is reference in point 3 to 'no payment – replacement', but on a close reading that also appears directly above point 4 which refers to 'credit $30,000'. Reading the notes as a whole, the 'no payment' and 'credit' can only refer to the royalty due of $200. Simple arithmetic confirms this: 150 feeders with a royalty to be paid of $200 per feeder = $30,000. It was the royalty which was to be paid by way of arranging replacement feeders at cost less the credit of (up to) $30,000. It cannot refer to the cost of the feeders as supplied to Mr Bridgman.
The second main aspect of Mr Bridgman's evidence which in my view demonstrates an inherent credibility in his claim that he owed no money for the supply of the feeders relates to the issue of the royalty. A person to whom a royalty is to be paid would not be expected to pay for the goods sold which produced the royalty. The payment of a royalty of $200 per feeder is only sensible and comprehensible if Mr Bridgman was to pay for those feeders.
If the agreement was as Mr Bridgman has both claimed in his affidavits and as pleaded, it follows that:
(a)Mr Clarke would pay for the 100 feeders, in return for which he would receive replacement feeders from Rhautomation. However, he would not receive a royalty (since the royalty was to be a 'credit' on the cost of the replacement feeders) and he would have to pay Rhautomation for the replacement feeders less the credit for royalties;
(b)Mr Bridgman would not pay for the 100 feeders as supplied to him and would keep all of the proceeds of sale from those feeders. As to the cost of the replacement feeders, Mr Bridgman would pay only the royalty of $200 per feeder but instead of paying that to Mr Clarke, Mr Bridgman would (presumably) pay that to Rhautomation.

During the course of submissions at the hearing of the appeal, counsel for Mr Bridgman conceded that the arrangements between Bridgman and Clarke were a 'little unusual' and 'less than crisp commercial arrangements'.
In my view, it is inherently incredible that the arrangements were that Mr Clarke would supply the feeders to Mr Bridgman at Mr Clarke's cost (and at a cost per feeder of $775), on the basis that Mr Bridgman would on‑sell those feeders and keep the proceeds of sale apart from $200 per feeder.
There are also internal inconsistencies in Mr Bridgman's evidence. Upon reading Mr Bridgman's first affidavit the impression given is that the acknowledgement of debt was first produced at the meeting on 29 December 2011. In Mr Bridgman's second affidavit, however, he describes how on 26 December 2011 Mr Clarke produced a document 'which purported to impose an obligation on me to pay cash for the diverted sheep feeders' (par 29). Annexed to Mr Bridgman's second affidavit, annexure MB5, is an email from Mr Clarke to Ms Wang dated 22 November 2011 which is to 'put you in the picture'. This email commences by stating '150 of the chicken feeders to go to Melbourne (Mark is going to pay for these later).' That statement in the email indicates that Mr Clarke, within five days of the alleged agreement made 17 November 2011, was conveying that Mr Bridgman was going to pay for the feeders. Since Mr Bridgman is in possession of that email and does not suggest he did not come into possession of it other than contemporaneously, Mr Bridgman must have been on notice before 26 December 2011 that Mr Clarke was expecting him to pay for those feeders.
In Mr Bridgman's second affidavit par 9, Mr Bridgman has claimed he would sell the feeders 'as agent' for Mr Clarke. This was not mentioned in his first affidavit. The recent claim of an agency is internally inconsistent with all of the other evidence of Mr Bridgman as well as what is pleaded in the proposed defence and counterclaim – there is no pleading of agency.
There are other aspects of Mr Bridgman's affidavit evidence which I find problematic. In particular, there are a number of factual matters in Mr Clarke's affidavits which have not been disputed by Mr Bridgman in circumstances where I would have expected him to address those matters.
For example, in the second affidavit of Mr Clarke sworn 10 September 2012 par 21 he stated 'As far as I am aware the defendant received the feeders and is selling them via his business Phrase Change Converters.' That has not been disputed by Mr Bridgman in his second affidavit (which affidavit, as I understand it, was sworn to address the issues in Mr Clarke's second affidavit for the purpose of the appeal). In fact there are no particulars at all of what Mr Bridgman has or has not sold.
Another example of a matter in Mr Clarke's first affidavit sworn 11 July 2012 which is not disputed by Mr Bridgman relates to par 29 of Mr Clarke's affidavit, where he deposed that:
I recall when we signing [sic] the acknowledgment of debt that Ms Wang asked the Defendant what would happen if he could not pay the money by the dates specified in the acknowledgment of debt. The Defendant told her that payment was not my problem and that he would get a bank loan if required. This was said in front of my son and I …
This has not been addressed by Mr Bridgman. If, in fact, there was any real issue about the acknowledgment of debt I would expect this to have been addressed. There was the opportunity to address this allegation both in Mr Bridgman's first and second affidavits. As the evidence of Mr Clarke is not challenged, I therefore proceed on the basis that this discussion as deposed to by Mr Clarke did take place.
In Mr Clarke's first affidavit of 11 July 2012, par 30 he deposed to contacting Mr Bridgman by telephone after he had not paid the first instalment of $38,750 due on 1 March 2012, and asking where the first instalment was:
… The Defendant told me that he had not been able to make payment to me but he knew he owed me money and that he would pay me eventually. He told me he would pay me as and when the feeders were sold by him. I did not agree to this. He also said that he would continue to pay me interest at 15% because he was late in making payment.
Mr Clarke also deposed to what occurred after the second instalment of $38,750 became due on 1 April 2012, at par 36:
Again, I contacted the Defendant and he told me he was selling the feeders but that he could not pay me straight away. He also again said that as and when the feeders sold he would pay me. I did not agree with this proposal. He did not say he did not owe the money and I was led to believe it was more a cash flow problem for him.
Neither of these matters has been addressed in either of Mr Bridgman's affidavits. These are matters which I would have expected to have been addressed, had the conversations not occurred and the admissions made by Mr Bridgman as alleged by Mr Clarke not been made. Indeed in Mr Bridgman's second affidavit he specifically addressed and traversed other paragraphs of Mr Clarke's affidavit sworn 11 July 2012 (see, for example, par 25 of Mr Bridgman's second affidavit). It is telling, in my view, that these matters have not been addressed or challenged by Mr Bridgman. As Mr Clarke's version of these two conversations is not challenged, I proceed on the basis that they did take place.
Further, on all of the evidence before me, including Mr Bridgman's affidavits, nothing was said to Mr Clarke concerning his alleged breach of the supply agreement, nor was any dispute concerning the debt as acknowledged raised at the time that the two amounts of $38,750 became due and payable.
The supply agreement made between Mr Clarke and Rhautomation is annexed to Mr Bridgman's first affidavit, annexure MB2. Mr Bridgman has described this as an agreement for the 'exclusive supply' of agricultural equipment by Rhautomation to Mr Clarke. However, how Mr Bridgman has described the supply agreement is quite different from what the supply agreement actually provides.
The opening paragraph of the supply agreement is:
This agreement is to verify the margin to be added to the price of products supplied by Rhautomation International Co Ltd to B.R.Clarke & Co as at 29 December 2011. The price of the products will be determined by the supplying factory for the relevant products. Both Rhautomation International Co Ltd and B.R.Clarke & Co will receive a copy of the
invoice relating to the product. From the supplying factory price, the predetermined margin to be added will be calculated, as set out below.
Formula sued by Rhautomation to calculate margin:
The formula used by Rhautomation to calculate the margin is then set out according to the product.
The supply agreement then continues:
If the supplying factory does not have a not have an export license [sic], then the margin added by Rhautomation International Co Ltd will be increased by 2 percent.
Fish Yu is not to be involved in any projects between Rhautomation and B.R.Clarke & Co.
This is the extent of what has been termed the 'supply agreement'.
Therefore, adding together what the supply agreement actually provides, the absence of any complaint by Mr Bridgman concerning Mr Clarke's alleged breach of the supply agreement, the matters in the evidence of Mr Clarke which have not been challenged by Mr Bridgman, and looking critically at the key aspects of Mr Bridgman's evidence concerning the agreement for the supply of the feeders to him, I find that the version of facts he has put forward is inherently incredible.
On the face of it, as the evidence of Mr Bridgman is not credible then there is no fair or reasonable probability of his having a defence. However, I will address the arguments made on Mr Bridgman's behalf.

The construction of the acknowledgement of debt – was there a debt to acknowledge?

The first paragraph of the acknowledgement of debt is clear and unambiguous. It also reflects the matters which are not disputed by Mr Bridgman.
Of course, Mr Bridgman claims that he did not owe Mr Clarke anything. In the proposed defence and counterclaim, however, it is specifically pleaded that 'the plaintiff was to provide to the defendant in Melbourne 100 large universal feeders' (par 2(a)) and also that these were provided (par 3). As I have found, Mr Bridgman's explanation of the agreement he had with Mr Clarke in relation to payment for those feeders is inherently incredible. It is clear from the whole of the evidence that Mr Bridgman was supplied with 100 universal feeders which he did not pay for. On the basis of Mr Bridgman's own proposed pleading and the evidence of the feeders having been supplied to him, as well as the other matters I have identified in [34] to [60] above, I am unable to accept the submission that Mr Bridgman did not owe a debt to Mr Clarke.
There was also an argument concerning the reference in the acknowledgment of debt to repayment of a 'loan'. Much was made of the fact that when referring to the installments due on 1 March and 1 April 2012, the acknowledgment of debt stated 'The repayment of this loan is as follows'. The submission was made on behalf of Mr Bridgman that the acknowledgment of debt records the sum of $77,500 as being an unpaid loan made by Mr Clarke to Mr Bridgman and there is no evidence to support this.
I must construe the reference to repayment of a loan in the acknowledgment of debt and must do so in accordance with the principles of construction in Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337, 352 (Mason J); see also Western Export Services Inc v Jireh International Pty Ltd [2011] HCA 45; (2011) 282 ALR 604, 605 [3] ‑ [5].
Although there is reference in the acknowledgment of debt to 'the repayment of this loan' and 'repayment of the loan' (in the last paragraph), in my view that is clumsy drafting by a non lawyer. The references to 'loan' must be read in light of what precedes it, which is an unambiguous acknowledgement of debt. It is plain that what is being referred to by 'the repayment of this loan' is the manner in which the acknowledged debt in the opening paragraph of the document is be paid by Mr Bridgman. I consider that this is what a reasonable person in the position of the parties would have understood the term 'repayment of the loan' to mean: Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165, 179 [40]; Western Export Services Inc v Jireh International Pty Ltd [6]. This construction is also consistent with the commercial purpose of the acknowledgement of debt.
On the undisputed facts it is, in my view, disingenuous for Mr Bridgman to suggest that the indebtedness specified in the acknowledgement of debt is an unpaid loan when clearly the indebtedness relates to the feeders he received and did not pay for.
Further, there is the evidence, not challenged, of the discussion Mr Bridgman had with Ms Wang at the time of the signing of the acknowledgement of debt (as I have discussed in [49] and [50] above) and the fact that when contacted by Mr Clarke after the two payments of $38,750 became due, Mr Bridgman did not dispute the debt and said he would pay as and when he sold the feeders (as discussed in [57] to [53] above).
Finally, I find it inherently incredible that an experienced businessman in the position of Mr Bridgman would sign an acknowledgement of debt for the amount of $77,500, if that money was not owed.
Accordingly I am satisfied that there is no triable issue in relation to the first basis of Mr Bridgman's proposed defence, namely that there was no existing debt to acknowledge.

The issue of consideration

Counsel for Mr Clarke submitted that the acknowledgement of debt was intended to be and operate as a deed, in which case consideration is not required. Counsel for Mr Bridgman disputed that the acknowledgement of debt is a deed.
The formal requirements for a deed at common law were that it should be a writing on paper, vellum or parchment, sealed and delivered. The requirements have, however, been modified by s 9 of the Property Law Act: Monarch Petroleum NL v Citco Australia Petroleum Ltd [1986] WAR 310, 353 (Kennedy J). Section 9 provides:
9. Formalities of deed
(1)Every deed, whether or not affecting property —
(a)shall be signed by the party to be bound thereby; and
(b)shall be attested by at least one witness not being a party to the deed but no particular form of words is required for the attestation.
(2)It is not necessary to seal any deed except in the case of a deed executed by a corporation under its common or official seal.
(3)Formal delivery and indenting are not necessary in any case.
(4)Every instrument expressed or purporting to be an indenture or a deed or an agreement under seal or otherwise purporting to be a document executed under seal and which is executed as required by this section has the same effect as a deed duly executed in accordance with the law in force immediately prior to the coming into operation of this Act.
It is no longer necessary for a deed to be under seal, except in the case of a corporation, and formal delivery is not necessary.
While formal delivery is no longer necessary, that does not dispense with any requirement for delivery. However, delivery means some conduct indicating that the person who has executed the deed intends to be bound by it. Anything which shows that he treats the instrument as his deed will suffice: Monarch Petroleum v Citco Petroleum (355). In Scook v Premier Building Solutions Pty Ltd (2003) 28 WAR 124 [25] Steytler J, (with whom McKechnie and Hasluck JJ agreed) explained that:
It is enough to meet the requirement of delivery that there be acts or words sufficient to show that the document is intended by the party to be executed as his or her deed presently binding on him or her: Tupper v Foulkes (1861) 142 ER 314 at 319; Xenos v Wickham (1867) LR 2 HL 296 at 312, per Blackburn J; Windsor Refrigerator Co Ltd v Branch Nominees Ltd [1961] Ch 88 at 98, per Cross J; and Vincent v Premo Enterprises (Voucher Sales) Ltd [1969] 2 QB 609 at 619, per Lord Denning MR. There is no need for any physical handing over of the deed: Doe d Garnons v Knight (1826) 108 ER 250 at 257; and Xenos v Wickham(HL) (at 323). Whether there has, or has not, been delivery is a question of fact: Xenos v Wickham(HL) (at 309, 311, 319); Ansett Transport Industries (Operations) Pty Ltd v Comptroller of Stamps (Vic) [1985] VR 70 at 78. Intention to deliver may be expressly proved or inferred from circumstances: Re Carile; Dakin v Trustees, Executors & Agency Co Ltd [1920] VLR 427 at 433. While intention is to be ascertained from circumstances prior to or contemporaneous with delivery, it is permissible to look at later events in order to ascertain what was the intention of the person concerned at the critical time: Poole v Neely [1976] 1 NZLR 529 at 541 and Monarch Petroleum (at 356).
Section 9 confirms that 'no particular technical form of words or act is necessary to render an instrument the deed of the party': Monarch Petroleum v Citco Petroleum (353 ‑ 354). Kennedy J stated in Monarch Petroleum v Citco Petroleum (355).
Thus, in my view, an instrument which is not clearly indicated or distinctly stated to be a deed, but which otherwise conveys to the mind, by implication, through its tenor and the words used therein, that it is intended to be a deed, is an instrument purporting to be a deed.
The meaning of 'purports to be a deed' in s 9(4) was also considered by Ipp J in Dean & Westham Holdings Pty Ltd v Lloyd (1991) 3 WAR 235, 252:
Before considering that material it is necessary to determine whether the instrument is expressed or purports to be a deed, as required by s 9(4) of the Property Law Act. Unless this requirement is fulfilled, the document will not have effect as a deed, irrespective of the parties' intention.
As the learned trial judge pointed out:
The meaning of 'expressed' is obvious enough. It means, clearly indicated or distinctly stated, rather than implied.
'Purport' according to the Macquarie Dictionary means 'to profess or claim … to convey to the mind as the meaning or thing intended; express, imply, … tenor, import or meaning, … purpose or object …'. In the context of s 9(4) of the Property Law Act 'purporting' is used in contra-distinction to 'expressed'. Thus, in my view, an instrument which is not clearly indicated or distinctly stated to be a deed, but which otherwise conveys to the mind, by implication, through its tenor and the words used therein, that it is intended to be a deed, is an instrument purporting to be a deed.
Where an instrument is clearly indicated or distinctly stated to be a deed, absent any extrinsic evidence to the contrary, it would ordinarily be inferred that the parties intended that it should have effect as a deed. The question whether an instrument purports to be a deed is closely bound up with the question whether it appears from the words used in the instrument that the parties intended it to be a deed. Thus the resolution of the questions whether there has been compliance with s 9(4) of the Property Law Act and whether the parties intended the instrument to be a deed depend, in the circumstances of this case, upon a construction of the instrument itself.
The learned trial judge held that in determining whether an instrument was expressed or purported to be a deed, in terms of s 9(4), regard should be had to the form of the instrument alone, and not its substance. He said that it was unnecessary 'to determine whether the document is in substance a deed. Subsection (4) provides no justification for such an exercise.' With great respect I differ from that view. I have already pointed out that, in my opinion, s 9 of the Property Law Act does not dispense with the requirement of intention, and, 'purporting', in the context of s 9(4), does not mean convey to the mind by form alone, but, rather, convey by the instrument as a whole, including both its form and its tenor or substance (252).
The acknowledgement of debt is not expressed to be a deed and, in fact, there is no use of the word 'deed' anywhere. Here the acknowledgment of debt was not drafted by a lawyer and this is not a case where it might be assumed that the draftsman knew the difference between a deed and an agreement: Dean & Westham Holdings Pty Ltd v Lloyd (239). The failure to describe or refer to the acknowledgment of debt as a deed should not deprive the document of its real effect, as that is not the only indication of whether a document is a deed. Whether the acknowledgement of debt is a deed depends not on form but on substance and what was conveyed by Mr Bridgman when he signed it.
In my view the terms of the acknowledgment of debt convey, by implication, that it was intended to be a deed. The object of the acknowledgment of debt was to obtain a commitment for payment of the sum of $77,500.
The acknowledgment of debt provided for the signature of the parties to be witnessed, which is another indication of a deed: Dean & Westham Holdings Pty Ltd v Lloyd (254). The acknowledgement of debt was executed by Mr Bridgman in the presence of a witness, Ms Wang. That is an indication that Mr Bridgman intended to be bound by it.
When Mr Bridgman signed the deed, even on his own affidavit evidence, he did not say anything to Mr Clarke at the time of the signing of the deed. Mr Bridgman's version of what occurred on 29 December 2011 was that Ms Wang signed the new supply agreement with Mr Clarke (Mr Bridgman's first affidavit par 28 and 29) and then:
At the same meeting but after we had discussed and signed the supply agreement, the Plaintiff insisted I sign an agreement on cash terms for the 100 sheep feeders he had diverted to me. That agreement is annexed hereto and marked as 'MB3' [annexure MB3 is the acknowledgment of debt]. The Plaintiff said he had changed his mind about our arrangement for the diverted sheep feeders as his accountant had insisted he do so and he didn't want the replacements coming out of China anymore.
Our relationship had prior to that meeting had been deteriorating but having seen him sign the supply agreement which ensured he would only deal with us and not employ Fish Yu or another party to supply, I signed the agreement … At the time I did not accept that amount was owning under the previous agreement and I had told him that the money wasn't owing. I did not receive any consideration from the plaintiff in return for the changed arrangement but I relied upon him having signed the supply agreement and the expectation that he would comply with it. I would not have signed the agreement without the plaintiff first having signed the supply agreement, leading me to believe that he would comply with the then supply agreement.

There is essentially the same version in Mr Bridgman's second affidavit, par 35 and par 36.
That is all that is said about the signing of the acknowledgement of the debt on 29 December 2011. No other details are provided. While Mr Bridgman states in his affidavits that 'I had told him that the money wasn't owing' (italics my emphasis), he does not condescend to particulars. There is no reference to an earlier discussion in Mr Bridgman's first affidavit. There is mention in the second affidavit of an occasion on 26 December 2011 where Mr Bridgman states that he told Mr Clarke he refused to sign as that was not the agreement (par 30). Even if he had previously voiced to Mr Clarke that the money was not owing, on Mr Bridgman's version of events he nonetheless signed the acknowledgment of debt on 29 December 2011, did so in the presence of a witness and said nothing which would indicate that he did not consider himself to be bound by it.
Indeed, on the unchallenged evidence of Mr Clarke as to the discussion that Mr Bridgman had with Ms Wang when signing the acknowledgment of debt (set out in [49] above), Mr Bridgman conveyed that he treated this as his deed and did consider himself to be bound.
In my view the acknowledgment of debt was a deed and Mr Bridgman is bound by it.
In case I am wrong in my conclusion that the acknowledgment of debt was a deed, I have considered the alternative argument that there was no consideration for the acknowledgement of debt because a promise to pay money advanced by a third party to a plaintiff is not enforceable, as it is only supported by past consideration: Hercules Motors Pty Ltd v Schubert (1953) 53 SR (NSW) 301.
It is true that Mr Clarke's initial evidence concerning who was to order and pay for the feeders is unclear. He began in his first affidavit by stating that he did not agree to pay for the feeders and that any agreement for the supply of feeders to Mr Bridgman was a separate commercial arrangement between Mr Bridgman and Ms Wang (par 13). However, the notes produced by Mr Bridgman, (MB1 to his first affidavit) which Mr Clarke conceded in his second affidavit sworn 10 September 2012, and Mr Clarke's evidence at par 17(b) of that affidavit clarify that Mr Clarke told Mr Bridgman that he would be prepared to divert 100 feeders to Victoria. Counsel for Mr Clarke also conceded during the appeal hearing that the feeders were re-directed to Mr Bridgman.
On Mr Bridgman's evidence the feeders which he received had been 'diverted' or 're-directed' by Mr Clarke to Mr Bridgman. As I have already observed in [63] above, it is also specifically pleaded in the proposed defence and counterclaim that Mr Clarke was to supply the feeders and the feeders were supplied. The diversion or redirection of an order which Mr Clarke had placed with Rhautomation was the way in which the supply to Mr Bridgman was effected. On the whole of the evidence Mr Clarke did supply those feeders and, of course, there is no dispute that he paid for these.
The evidence from Mr Clarke is that he had been seeking payment from Mr Bridgman for the feeders which had been delivered to him. On Mr Clarke's version of the facts the acknowledgment of debt was to settle this matter, with Mr Bridgman to pay the amount owed in two instalments.
On the whole of the evidence, for the reasons I have discussed above [34] to [60], Mr Bridgman's claim that he did not have to pay for the feeders is inherently incredible. He had received the feeders and not paid for them.
Thus, had the acknowledgment of debt not been signed, Mr Clarke would have had a good claim for the cost of the feeders on the basis of moneys owed for goods supplied and delivered to Mr Bridgman.
It is well established that a compromise, forbearance to sue or an extension of time to pay an existing debt is good consideration, and an implicit promise of forbearance to sue is sufficient: McDermott v Black (1940) 63 CLR 161; Scolio Pty Ltd v Cote (1992) 6 WAR 475, 485 (Ipp J). Forbearance to sue can be implied in this case as time to pay was granted by the arrangements for payment of the debt by installments on 1 March and 1 April 2012.
The argument that there was no consideration for the acknowledgment of debt has no reasonable prospect of success and Mr Bridgman has not shown that he has an arguable defence or that there is a triable issue relating to absence of consideration.

Payment of a debt owed to a third party

It has been submitted that on Mr Clarke's case he paid Mr Bridgman's debt to Rhautomation, and thus there is no contractual basis for the recovery of the funds from Mr Bridgman and no claim for restitution. The written submissions made were as follows:
Where A pays B's debt to C, may A obtain reimbursement from B?
There will be a contractual right of reimbursement where A obtains an assignment of B's debt to C. In the absence of such assignment, the law is unclear: Mason & Carter's Restitution Law in Australia (2^nd ed) [840]. There is no Australian case law as to a right of restitution by A, who intervenes to pay B's debt to C.
For the reasons I have discussed when looking at the issue of consideration, there was a good basis for the recovery of the funds from Mr Bridgman, for goods supplied and delivered. This argument has no reasonable prospect of success and I do not consider there is any triable issue in relation to this part of Mr Bridgman's defence.

Misleading and deceptive conduct

The allegations of misleading and deceptive conduct are alleged to arise from the execution of the supply agreement. Where the allegation is that a representation is misleading, the question is whether the conduct of the representor had a tendency to lead the person to whom the representation was made into error. This is an objective test: see Campbell v Backoffice Investments Pty Ltd [2009] HCA 25; (2009) 238 CLR 304 [25]; Butcher v Lachlan Elder Realty Pty Ltd [2004] HCA 60; (2004) 218 CLR 592 [109]; Grainger v Williams [2009] WASCA 60 [26].
As I have already set out, Mr Bridgman describes in some detail the business which he carried on in Victoria and his experience. It was Mr Bridgman who approached Mr Clarke about selling Mr Clarke's feeders because Mr Bridgman wanted to complement his existing business.
Mr Bridgman also describes Ms Wang's experience with Rhautomation and that she had been involved in that business since September 2006 (Mr Bridgman's first and second affidavits par 5).
There is no evidence that Mr Bridgman was a director or had any recognised role in or connection with Rhautomation, other than being Ms Wang's fiancé. In fact Mr Bridgman referred in his affidavits to inviting Mr Clarke to China 'to see how Yaya's company operated and sourced manufactured steel products' (Mr Bridgman's first and second affidavits par 7). That indicates that Mr Bridgman and his fiancé were carrying out quite different businesses.
However, throughout his affidavits when referring to Rhautomation Mr Bridgman refers to 'we' and 'us'.
What Mr Bridgman has done in his affidavits is to raise issues which arise between Rhautomation and Mr Clarke to 'muddy the waters' in an attempt to raise a defence to the acknowledgment of debt.
I consider that it is objectively improbable that the alleged representations which related to Mr Clarke's dealings with a separate company led Mr Bridgman into error and induced him to execute the acknowledgment of debt, particularly given all of the circumstances as I have already discussed when considering the other proposed defences and the issue of whether Mr Bridgman's version of facts is inherently incredible.
I consider that Mr Bridgman's claim that 'I would not have signed the agreement without the plaintiff first having signed the supply agreement, leading me to believe that he would comply with the then supply agreement' is inherently incredible. As I have already observed, having regard to Mr Bridgman's circumstances, it is improbable that he would, as a businessman, sign an acknowledgment of debt if there was no basis for him to so sign.
Even if it could be said that Mr Bridgman signed the acknowledgment of debt in reliance upon the alleged misleading and deceptive conduct of Mr Clarke and the acknowledgment of debt were to be set aside (which is the relief sought by Mr Bridgman) there still remains the fact that Mr Bridgman received the feeders supplied to him by Mr Clarke and has not paid for them.
While it might be said that the supply agreement between Mr Clarke and Rhautomation was breached soon after it was entered into, that in my view is a matter between Mr Clarke and Rhautomation and, based on the evidence of Mr Clarke, issues between Mr Clarke and Rhautomation are already the subject of other proceedings.

Conclusions

This is a case where, while superficially on the face of the affidavits filed there is a dispute on the facts, on a critical review the matters put forward by Mr Bridgman are inherently incredible. I consider that all of the defences and the counterclaim which he has raised are contrived, lack bona fides and are without merit and this is an attempt by him to postpone or avoid having to make payment to Mr Clarke.
In my view, on the whole of the material there is no question to be tried in relation to the debt (acknowledged by deed, and supported by consideration) owed by Mr Bridgman and he should not be given leave to defend.
Accordingly, Mr Clarke is entitled to summary judgment and the appeal must be dismissed.