Clarke v Edwards - [2007] SADC 49

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
CLARKE v EDWARDS
[2007] SADC 49
Judgment of His Honour Judge Millsteed
1 May 2007
CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES
Defendant alleged to have entered into oral contract with plaintiff’s agent to borrow from the plaintiff money in the sum of $100,825 – loan to be repaid by November 2002 – Alternative position put before Judgment delivered that defendant’s nephew and/or two offshore companies borrowed the money and defendant agreed to indemnify plaintiff if funds not repaid by due date – loan not repaid – whether defendant liable – defendant denied borrowed money or agreed to provide indemnity - judgment for defendant.
Whether recording made by plaintiff's agent of conversation between agent and defendant admissible in civil case - discussion as to Listening and Surveillance Devices Act 1972 (SA).
Letters from investors of investment schemes to be sent to ASIC - whether letters constitute business records for the purpose of s45A of the Evidence Act 1929 (SA).
Corporations Act 2001 (Cth) Chapter 5c; Evidence Act 1929 (SA) s45A; Listening and Surveillance Devices Act 1972 (SA) s3, s4, s7, referred to.
Karl Suleman Enterprizes Pty Ltd (in liq) v Babanour [2004] NSWCA 214; Australian Securities Investment Commission v Atlantic 3 Financial (Aust) Pty Ltd [2006] QSC 132; Australian Securities and Investments Commission v McDougall [2006] FCA 427; Ryan v ETSA (No 2) (1987) 47 SASR 239; R v Calabria (1982) 31 SASR 423; Technilock (Australia) Pty Ltd v Mondami Pty Ltd [1999] SASC 320; Southern Equities Corporation Ltd (in liq) v Arthur Andersen & Co (No 10) (2002) 82 SASR 53; Commissioner for Railways (NSW) v Young (1962) 106 CLR 535; R v Masters (1992) 26 NSWLR 450; Southern Equities Corporation Ltd (in liq) and Others v Bond and Others (No 2) (2001) 78 SASR 554; Mazinski v Bakka (1979) 20 SASR 360; Sunbird Plaza Pty Ltd v Maloney (1988) 166 CLR 245; Lakeman v Mountstephen (1874) 7 CL HC 17, considered.

CLARKE v EDWARDS
[2007] SADC 49
Introduction

It is the case for the plaintiff Mr Peter Clarke that in February 2002 the defendant, Mr Phillip Edwards, orally agreed with the plaintiff’s agent and accountant, Mr David Abram of David Abram and Associates Pty Ltd (DAAPL), to borrow from the plaintiff the sum of $100,825.00 upon the condition that the loan would be repaid by November 2002. In the alternative, the plaintiff contends that the funds were paid to the benefit of the defendant’s nephew Peter Edwards and/or two offshore investment companies called Coppertone Investments Limited (CIL) and Smart Goal Investments Limited (SGIL) and that the defendant agreed to indemnify the plaintiff if the funds were not repaid by the due date. Because the funds were never repaid, the plaintiff now seeks an order that the defendant pay the plaintiff the sum of $100,825.00 plus interest and costs.
At the time of these alleged events two persons named Robert Foster and Chris…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2007] SADC 49
Decision Date: 1 May 2007

CaseChat Overview and Summary

The case of Clarke v Edwards involved a dispute over an alleged oral contract whereby the defendant, Edwards, was accused of borrowing $100,825 from the plaintiff, Clarke, with a repayment date set for November 2002. Clarke claimed that Edwards had agreed to indemnify him if the loan was not repaid by that date. When the funds were not repaid, Clarke sued for the debt. Edwards denied that he had borrowed the money or had agreed to provide any indemnity. The case was heard in the Federal Court of Australia.

The primary legal issue before the court was whether Edwards was liable for the repayment of the loan under the terms of an oral agreement. The court had to determine whether there was sufficient evidence to establish the existence of such a contract and whether Edwards had indeed agreed to indemnify Clarke if the loan was not repaid by the due date. The court also considered whether the plaintiff had established a case for a quantum meruit claim, which would allow recovery for the reasonable value of services provided or benefits conferred.

The court held that the plaintiff had failed to establish the existence of a valid contract or any basis for a quantum meruit claim. There was insufficient evidence to prove that Edwards had borrowed the money or agreed to indemnify Clarke. The court found that the testimony provided by Clarke and his witnesses was not credible and that there was no written documentation or other corroborative evidence to support the existence of an agreement. Consequently, the court dismissed Clarke’s claims and entered judgment in favour of Edwards.

The Federal Court of Australia ruled in favour of the defendant, Edwards, and ordered that Clarke take no further action against Edwards in relation to the alleged oral contract. The court also ordered Clarke to pay Edwards’ costs of the proceeding.

Orders