| JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA LOCATION : PERTH CITATION : DENG -v- MILLSITE RESOURCES PTY LTD [2010] WADC 21 CORAM : SCHOOMBEE DCJ HEARD : 8 FEBRUARY 2010 DELIVERED : 19 FEBRUARY 2010 FILE NO/S : APP 58 of 2009 BETWEEN : FRANK DENG Appellant
AND
MILLSITE RESOURCES PTY LTD
Respondent
Catchwords: Appeal from Magistrate's Court - Re-hearing - No error by magistrate - Appeal Court not to substitute its own findings of fact unless magistrate's findings are wrong - Adequacy of reason given - Turns own its own facts Legislation: Nil Result: Appeal dismissed
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Representation: Counsel:
Appellant : Mr C E Chenu
Respondent : Mr G Lawton
Solicitors:
Appellant : Lavan Legal
Respondent : Lawton Lawyers
Case(s) referred to in judgment(s):
Allesch v Maunz (2000) 203 CLR 172
Argyll Park Thoroughbreds Pty Ltd v Glen Pacific Pty Ltd (1993) 11 ACSR 1
Australian Trade Commission v Disktravel [2000] FCA 62
Beale v Government Insurance Officer (NSW) (1997) 48 NSWLR 430
Bunbury Foods Pty Ltd v National Bank of Australasia Ltd (1984) 153 CLR 491
Butler v Bennett [2007] WADC 107
Cummings v Lewis (1993) 41 FCR 559
Dodds Family Investment Pty Ltd v Lane Industries Pty Ltd (1992 – 93) 26 IPR 261
Edwards v Noble (1991) 125 CLR 296
EFF Ltd v Mygid Pty Ltd [2004] WASC 174
G Scammell & Nephew Ltd v HC & JG Ouston [1941] AC 251
Hughes v Western Australian Cricket Association (Inc) (1986) ATPR 40 – 748
Mount Lawley Pty Ltd v Western Australia Planning Commission (2004) 29 WAR 273
Universal Greening Pty Ltd v Sabine (1999) 17 ACLC 880
Woods Bagot Pty Ltd v Poppy Lodge Pty Ltd (1995) 65 SASR 583
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1 SCHOOMBEE DCJ: This matter concerns an appeal from a judgment by the learned Magistrate who partially allowed a claim by Millsite Recourses Pty Ltd ("Millsite") against Mr Frank Deng concerning travel expenses and a credit card debt paid by Millsite on behalf of Mr Deng.
The facts 2 Mr Peter Curran and Mr Chris Longmuir are directors of Millsite which company was engaged in cleaning up mine sites in Australia from about 2004 onwards. In 2005 there was an agreement between Millsite and Mr Deng pursuant to which Mr Deng would introduce Mr Curran and Mr Longmuir to contacts in Asia with the aim of expanding Millsite's operations into Asia. The agreement was that if an overseas operation would materialise as a result of Mr Deng's introduction, a new company would be floated to conduct this operation and Mr Curran, Mr Longmuir and Mr Deng would be allocated equal shareholding in the company. 3 The first trip conducted by the three men was in about March 2005 to China. Both Mr Curran and Mr Longmuir recollected that Mr Deng paid his own travel and accommodation expenses in respect of that trip. However, from 1 May to 12 December 2005 Millsite paid for various airfare and accommodation expenses related to Mr Deng as listed in an invoice issued by Millsite to Mr Deng approximately two years later, ie on 1 March 2007. There is no dispute between the parties that these expenses, totalling $10,232.18 were incurred by Millsite and that they related to Mr Deng. An analysis of the invoice indicates that at least some airfares from Perth to destinations in Asia and return and also between destinations in Asia were not paid for by Millsite. 4 There is also agreement between the parties that on 1 June 2005 Millsite paid the amount of $10,721.30 then outstanding on the American Express credit card held by Mr Deng directly to American Express. A second invoice in that amount was issued by Millsite to Mr Deng on 1 March 2007. 5 Millsite made a claim in the Magistrates Court for the repayment of the amounts in the two invoices on the basis that the payment of the travel expenses and the debt on the American Express credit card were loans to Mr Deng which were repayable upon demand. Millsite also made a claim for payment by Mr Deng of an amount of $187.05 outlaid by Millsite in respect of crane hire. The latter claim was conceded by Mr Deng. (Page 4)
6 The learned Magistrate allowed Millsite's claim of $10,721.30 in respect of the credit card payment and the conceded claim in respect of the crane hire. His Honour dismissed the claim of $10,232.18 by Millsite relating to the travel expenses paid on behalf of Mr Deng.
The evidence in the Magistrates Court 7 Mr Curran gave evidence that Mr Deng initially paid for his own travel and accommodation expenses but then approached Mr Curran shortly before 1 June 2005 and told him that he had a credit card debt and could not afford to travel. Mr Curran said that he told Mr Deng that Millsite would pay his credit card debt and also the airfares, but that these payments would have to be reimbursed by Mr Deng either when an overseas company was formed or when Mr Deng had the funds available. Mr Curran gave evidence that at that time Mr Deng had been talking about receiving some money from the sale of a property. Mr Curran said that to the best of his recollection the issue of paying for Mr Deng's travel expenses only arose when Mr Deng showed Mr Curran his outstanding credit card account. However, the invoice later issued to Mr Deng shows that hotel accommodation and flights were already paid by Millsite for a trip between 1 and 11 May 2005. 8 Mr Curran gave evidence that he told Mr Deng on a number of occasions that he would have to repay the travel expenses outlaid by Millsite and that normally Mr Longmuir was present during these discussions. Mr Curran said that Mr Longmuir personally also advised Mr Deng that these payments would have to be repaid. With regard to the payment of the American Express credit card debt Mr Curran said that both he and Mr Longmuir told Mr Deng that this had to be repaid. 9 Mr Curran further gave evidence that he spoke to Mr Deng on several occasions about repayment of the money that he owed and that Mr Deng's response each time was that he had no funds. Mr Curran then sent Mr Deng the invoices in early March 2007 "in order to create a paper trail", but the response by Mr Deng remained the same. 10 Mr Curran said that in early December 2007 he spoke to Mr Deng on speaker phone from his office. Mr Deng offered to pay $15,000 in respect of all the outstanding monies and said that this amount would become available upon the sale of a property. Mr Curran agreed to accept the offer and to "call it quits". Mr Curran asked Mr Deng to sign a facsimile to confirm this agreement and Mr Deng agreed to that. A facsimile was sent to Mr Deng, but when Mr Curran went to see Mr Deng at his house a (Page 5)
few hours after the telephone discussion, Mr Deng said that his fax machine was out of ink. 11 Mr Curran's partner, Ms Carter, also gave evidence and confirmed that she had overheard the telephone call between Mr Curran and Mr Deng and had forwarded a fax to Mr Deng which contained an agreement to pay the sum of $15,000 in respect of the invoices that had been issued to him. No money was ever received from Mr Deng. 12 Mr Curran agreed in cross-examination that he had signed a letter "to whom it may concern", dated 28 February 2006, in which he stated that Mr Deng was employed by Millsite as a consultant on overseas projects and that he envisaged that Mr Deng would earn approximately $80,000 to $100,000 per year. Prior to making this concession, Mr Curran's counsel asked the learned Magistrate to issue a certificate under s 11 of the Evidence Act 1906. Mr Curran was not further cross-examined on this letter. 13 Mr Deng did not give evidence but Mr Longmuir was called as a witness on behalf of Mr Deng. Although Mr Longmuir is still a director and shareholder of Millsite, Mr Curran had explained that Mr Longmuir is no longer involved with Millsite's operations and owes money to Millsite. Mr Longmuir gave evidence that in respect of the first trip to China he thought that Mr Deng was paying for his own expenses. Mr Longmuir said that Mr Curran handled all of Millsite's financial affairs and that he never got involved in those matters. 14 Mr Longmuir denied that he had ever said to Mr Deng that he would have to repay the travel expenses paid by Millsite on his behalf or that this was said in his presence by Mr Curran. However, Mr Longmuir agreed that he did not know whether such an arrangement had been made between Mr Curran and Mr Deng and could not say whether this had happened or not. Mr Longmuir could not recall Mr Curran ever having told him about such an agreement with Mr Deng. He said that the first thing that he heard about travel expenses having to be repaid by Mr Deng was when Mr Deng told him that he had been "summonsed for a certain amount of money". 15 As regards the credit card payment, Mr Longmuir said that Mr Curran told him at some stage that he had to put some money into Mr Deng's credit card account and that this was approximately $10,000. Mr Longmuir said that he never discussed with Mr Deng that the payment of the credit card debt had to be repaid. Mr Longmuir said that his (Page 6)
understanding was that Mr Deng would pay for his own travel expenses and that the credit card payment "would be worked out down the line". 16 Ms Carter explained in her evidence that she entered all expenses incurred by the company into a MYOB bookkeeping system. However, she was not an accountant and Millsite's accounts and tax returns were prepared by an independent accountant. Ms Carter agreed that she had entered all the travel expenses listed in the first invoice rendered to Mr Deng as expenses incurred by Millsite. The credit card payment, on the other hand, was entered in the general ledger under "other current liabilities". Ms Carter agreed that loan accounts had been opened in the general ledger for various other people and related companies, including for Mr Curran and Mr Longmuir. However, there was no loan account for Mr Deng.
The learned Magistrate's judgment and reasons 17 The learned Magistrate came to the conclusion that Millsite's claim in respect of the travel expenses outlaid should be dismissed, but that the claim in respect of the credit card payment should be upheld. The learned Magistrate correctly summarised the evidence given at the trial and noted that Mr Longmuir's evidence was contrary to that of Mr Curran in that Mr Longmuir said that he had never told Mr Deng that he had the obligation to repay the money and was also not present when Mr Curran told Mr Deng this. 18 The learned Magistrate came to the conclusion that the evidence of Mr Curran was unsatisfactory in several respects. Firstly, the learned Magistrate referred to the memorandum "to whom it may concern" signed by Mr Curran, which indicated that Mr Deng was a consultant of Millsite and secondly, came to the conclusion that Mr Curran had given different versions of the agreement as to when the monies were repayable. Mr Curran at first only said that the money was repayable when the company was formed or when Mr Deng had the funds available. Subsequently Mr Curran qualified this by saying that the money was repayable when the company had been formed and was producing some profits and that Mr Deng was waiting for some money to be available from the sale of a property. The learned Magistrate also said that Mr Curran's evidence was unsatisfactory because of the discrepancies between it and Mr Longmuir's evidence regarding Mr Longmuir's presence during the discussions with Mr Deng about repayment of the monies. The learned Magistrate also noted that there was a discrepancy (Page 7)
between Mr Curran's evidence and the statement of claim as the latter stated that the agreement was that the money was repayable on demand. 19 The learned Magistrate then came to the conclusion that he was not satisfied that Millsite had proven an agreement to repay the travel expenses and that it appeared to him that Mr Deng was a consultant, if not an employee, of Millsite. Under those circumstances, the learned Magistrate said, it would not be unusual for Millsite to have financed Mr Deng's travel costs. 20 There is no cross-appeal and no challenge to the findings made by the learned Magistrate in respect of the agreement regarding the repayment of the travel expenses. However, as regards the repayment of the credit card loan, the learned Magistrate came to a different view. His Honour emphasised that this advance was of a totally disparate (the transcript refers to "desperate", but this is presumably a typing error) nature and was for the purpose of giving Mr Deng a respite from a debt owing which had nothing to do with Millsite other than that its payment would give Mr Deng the opportunity to embark upon travel with Millsite's directors. The learned Magistrate came to the conclusion that he was satisfied on a balance probabilities that the payment of the credit card debt was truly a loan and that it was probable that Mr Deng had agreed to repay it within a reasonable time of demand. 21 The learned Magistrate did not regard Mr Deng's offer to settle the invoices issued by Millsite for the amount of $15,000 as inconsistent with Mr Deng's denial of liability for the repayment of the travel expenses. His Honour said that the settlement offer was merely an attempt by Mr Deng to resolve the total claim by Millsite. 22 Accordingly, the learned Magistrate allowed the claim for the credit card payment but dismissed the claim for the travel expenses. 23 As regards the costs of the action, the learned Magistrate made an order that they be paid by Mr Deng. It appears from the transcript that His Honour was first minded to allow only a percentage of the costs in proportion to the amount recovered by Millsite, but then changed his view and stated that the costs should follow the event, as Millsite had been successful with regard to a substantial amount of its claim ("nearly $11,000 of the original – around $24,500"). However, when the learned Magistrate made the order that Mr Deng pay Millsite's costs, he added that the costs should be taxed on a scale applicable to the amount recovered. The learned Magistrate explained at the same time that he recognised that (Page 8)
under the new scale of costs applicable in the Magistrates Court, there was no different scale for different amounts recovered, but that he was of the view that the taxing officer would use his or her discretion in allowing costs on the basis of the amount recovered.
The grounds of appeal 24 Mr Deng has challenged the learned Magistrate's finding that there was an agreement for him to repay the credit card payment on demand within a reasonable period of time as well as the learned Magistrate's order that Mr Deng pay Millsite's costs. 25 There are three grounds of appeal. The first one is essentially that the finding by the learned Magistrate was perverse or against the overwhelming weight of the evidence. The second ground is that the learned Magistrate failed to give any or adequate reasons for upholding an agreement to repay the credit card payment while not upholding an agreement in respect of the travel expenses. The particulars provided in respect of this ground were essentially that the learned Magistrate found that Mr Curran was not a reliable witness and gave no reasons why Mr Curran's evidence should be preferred to that of Mr Longmuir in respect of the credit card payment. Mr Longmuir's evidence was not challenged and the learned Magistrate made no adverse finding regarding Mr Longmuir's credibility. The learned Magistrate also gave no explanation as to how he reconciled the inconsistencies between the evidence of Mr Curran and Mr Longmuir. The third ground of appeal is that the learned Magistrate erred in making an order that Mr Deng pay Millsite's costs "to be taxed on a scale applicable to the amount recovered", and that the learned Magistrate should have apportioned the costs or made no order as to costs.
The nature of the appeal, error and duty to give reasons 26 An appeal to the District Court from a decision by a magistrate is in the nature of a re-hearing: Butler v Bennett [2007] WADC 107 at [4]-[10]. In an appeal by way of re-hearing the appellate court can exercise its powers only where the appellant can demonstrate that, having regard to all the evidence before the appellate court, the order that is the subject of the appeal is the result of some legal, factual or discretionary error. If so satisfied, an appellate court may substitute its own decision based on the facts and the law as they then stand: Allesch v Maunz (2000) 203 CLR 172 at [23] per Gaudron, McHugh, Gummow and Hayne JJ. However, an appellate court ought not to reverse a finding of fact, unless it is convinced that it is wrong. If a finding of fact is reasonably open on (Page 9)
the evidence, it is not enough to warrant its reversal that the appellate court would not have been prepared on that evidence to make the same finding. Merely different views do not establish that another view is wrong: Edwards v Noble (1991) 125 CLR 296 at 304 per Barwick CJ. 27 A magistrate also has a duty to give reasons. The extent of that duty has been succinctly summarised by Bowden DCJ in Butler v Bennett (supra) at [45] – [47] as follows: "45 The reasons for decision must be sufficient to give effect to any right of appeal and the basis for the decision must be apparent as otherwise the losing party cannot know whether there has been a mistake of law or a (sic) fact. However, reasons need not be lengthy or elaborate, nor need they refer to all of the evidence led in the proceedings. However, relevant evidence should be referred to (albeit not necessarily in detail) and where there is conflicting evidence of significance to the outcome, both sets of evidence should be referred to. (Mount Lawley Pty Ltd v Western Australia Planning Commission(2004) 29 WAR 273 at 283 per the court). 46 A full or detailed statement of reasons would not be practical in a busy court such as the District Court and it would be even less practical in a Magistrates Court. The imposition of such a requirement in every case would cause delays in the administration of justice. The reasons may be stated shortly without being developed in any detail. The decisions are required to set out the relevant findings of fact and the reasons for the decision and must disclose adequate (sic) the intellectual process which has resulted in a particular determination. (Whitehead v Procopis(2005) 156 A Crim R 67). 47 It is not necessary to make explicit findings on every disputed aspect of the evidence if such findings can be inferred. The judicial obligation at least obliges a Judge to state generally and briefly the grounds which have led him or her to the conclusion reached concerning disputed facts or questions and to list the findings on the principle (sic) contended issues. (Soulemezis v Dudley (Holdings) Pty Ltd(1987) 10 NSWLR 249 at 258 per Kirby J)." (Page 10)
28 In Mount Lawley Pty Ltd v Western Australia Planning Commission(2004) 29 WAR 273 at [28] – [29] it was further held in reliance on Beale v Government Insurance Office (NSW) (1997) 48 NSWLR 430, that where one set of significant evidence was preferred by the trial Judge over another, he or she should set out findings sufficient to explain why. However, the Court of Appeal explained that inadequacy of reasons did not necessarily amount to an appealable error. A court of appeal would only intervene if no reasons were given in circumstances in which they were required or when the inadequacy was such as to give rise to a miscarriage of justice. Further, an appealable error arising from inadequate reasons did not necessarily result in a new trial. The appellate court was entitled to consider the matter and, if it could do so (where, for example, only one conclusion was reasonably open on the available evidence), it could itself decide the matter. 29 As regards the appeal against the learned Magistrate's costs order, this is a discretionary order and an appellant must establish an error of principle in exercising the discretion before a court of appeal will intervene in the order given at first instance: Cummings v Lewis (1993) 41 FCR 559 at 604. However, s 43(7)(e) of the Magistrates Court (Civil Proceedings) Act 2004, which sets out the District Court's powers in dealing on appeal with a decision by a magistrate, provides that the appeal court may make an order as to the costs of the appeal and as to the costs in the Magistrates Court. This section seems to indicate that the District Court has wider powers to review the costs order granted in the Magistrates Court than under the usual rule dealing with the review of a discretionary order on appeal.
Findings on appeal 30 I am not persuaded that the learned Magistrate's judgment allowing the claim in respect of the credit card payment was perverse or against the overwhelming weight of the evidence. I agree that the learned Magistrate could have explained in more detail what evidence he relied on in order to find this agreement proven and how he dealt with the conflict between the evidence of Mr Curran and that of Mr Longmuir. However, the learned Magistrate's findings were open on the evidence and although he does not spell out every step of his reasoning process it is readily apparent what evidence the learned Magistrate relied upon, because he set out the evidence in fair detail. (Page 11)
31 Although the learned Magistrate said that Mr Curran's evidence was unsatisfactory, he did not make any credibility finding against Mr Curran. The learned Magistrate was not persuaded that the oral agreement regarding the travel expenses was proven because of the various versions of the agreed time for repayment that Mr Curran gave (including in the statement of claim) and the fact that Mr Curran said that Mr Longmuir had also told Mr Deng that these expenses were repayable or at least had been present when this was discussed between Mr Curran and Mr Deng. 32 One matter which clearly swayed the learned Magistrate against a finding that the travel expenses were repayable was the fact that the letter addressed to "to whom it may concern" indicated that Mr Deng was a consultant of Millsite and would receive some sort of remuneration. Although Mr Curran had asked for a s 11 certificate before he agreed that he signed this letter, there was no evidence that the information in the letter was incorrect. The learned Magistrate made the comment that it would not be unusual for Millsite to have financed Mr Deng's travel arrangements if Millsite had received the benefit of his services. 33 The learned Magistrate also found that the fact that Mr Deng had offered to settle the claims set out in the invoices by paying $15,000, was not inconsistent with him denying liability for the travel expenses. Further, although the learned Magistrate did not refer in his final analysis of why Millsite's claim in respect of the travel expenses should be dismissed to the fact that the travel expenses had been entered by the company as expenses in its general ledger, the learned Magistrate dealt with this matter when he summarised Ms Carter's evidence. This is clearly another piece of evidence that supports a finding that the travel expenses were not repayable. 34 The learned Magistrate came to the conclusion that the payment of Mr Deng's credit card debt was disparate in nature, as the amount paid had nothing to do with Millsite. This is an important point that the learned Magistrate made, because there was no evidence that an amount similar to the $10,721.30 paid by Millsite to American Express was thereafter incurred by Mr Deng for travel expenses. If there had been such evidence, the submission that the learned Magistrate should not have treated the two agreements differently, would have had more force. 35 Counsel for the appellant submitted that once the learned Magistrate had rejected Mr Curran's evidence regarding repayment of the travel expenses, it was not open for the learned Magistrate to accept Mr Curran's evidence regarding the repayment of the credit card debt. However, there (Page 12)
is no reason why a witness's evidence may be accepted with regard to one particular claim, but not with regard to another. It may also be that other evidence supports the probability of the witness's evidence being true and correct in respect of one particular claim, but not in respect of another. This is exactly what happened in this case. The learned Magistrate essentially found that it was not probable that the travel expenses had to be repaid, as Mr Deng was a consultant, whereas the learned Magistrate found that it was probable that the credit card payment had to be reimbursed by Mr Deng because it was for an amount unrelated to Millsite's business. Although the learned Magistrate did not refer in his final conclusions to the treatment of the credit card payment in the books of Millsite, the evidence was that the payment of the credit card was treated differently to the payment of the travel expenses and was reflected in Millsite's "other current liabilities" account. Whether this was a correct entry in accounting terms is not relevant, but it is important that Millsite regarded this payment to be in a different category to the payment of the travel expenses. 36 The learned Magistrate did not spell out that he accepted Mr Curran's evidence that he told Mr Deng that the payment of the credit card debt was to be reimbursed, but this is fairly to be implied. Mr Longmuir did not deny that there may have been such an agreement between Mr Curran on behalf of Millsite and Mr Deng. Mr Longmuir merely said that he did not make that agreement and he was not present when this was discussed between Mr Curran and Mr Deng. However, Mr Longmuir also said that he had left anything to do with the finances of Millsite to Mr Curran and that Mr Curran had told him at some stage that Millsite had paid approximately $10,000 in respect of Mr Deng's credit card. Mr Curran understood that it would be "worked out down the line", which presumably means that Millsite would get some sort of consideration for the loan. 37 Given the fact that the credit card payment was made to American Express in respect of the specified amount in the credit card statement without any evidence that a matching amount of travel expenses was incurred by Mr Deng and given the fact that this payment was treated differently in Millsite's accounts to the travel expenses, the probabilities of an agreement for reimbursement were strong. These probabilities are likely to have influenced the learned Magistrate in accepting Mr Curren's evidence in respect of the credit card payment. The learned Magistrate did not spell out these considerations in detail other than to say that the credit card payment was of "an entirely disparate nature", but these (Page 13)
matters are important issues which His Honour did refer to in summarising the evidence. 38 Another matter that supports the learned Magistrate's conclusion is the fact that Mr Deng made an offer to settle the claims arising from all the invoices for $15,000. Although the learned Magistrate does not specifically refer to the fact that this evidence supported his decision in respect of the credit card payment, he does state that the offer of settlement was "an attempt … to resolve what was clearly a total claim". The fact that Mr Deng offered to pay some money is a piece of evidence which goes towards the conclusion that there was some amount repayable by him and that he accepted that. 39 Accordingly, I find that neither the appellant's first or second ground for the appeal is to be upheld.
Whether finding that loan was repayable on demand open on the evidence 40 There is one other matter that I need to deal with and that is whether it was open to the learned Magistrate to make the finding that the credit card loan was repayable within a reasonable time of demand. The notice of appeal did not specifically challenge this finding and it is not mentioned in the particulars to the second ground, that is, that the learned Magistrate did not give adequate reasons. This issue was also not raised in oral submissions. However, in the written submissions filed on behalf of the appellant it is said that the learned Magistrate did not give reasons with regard to the finding that Mr Deng agreed to repay the credit card payment within a reasonable time of demand, where the evidence by Mr Curran was that the amount was repayable when the overseas company was up and running or when Mr Deng had funds available. I shall therefore deal with this issue. 41 It is correct that the learned Magistrate did not spell out his reasoning as to why he came to the conclusion that the amount paid in respect of the credit card was repayable within a reasonable time of demand. However, that issue was dealt with in the oral submissions made to the learned Magistrate. Counsel for the appellant provided the learned Magistrate with two authorities dealing with the question whether a term regarding payment as described by Mr Curran was valid or void and unenforceable. Importantly, counsel for the appellant submitted that should the learned Magistrate find that the term regarding repayment was void, but that there was nevertheless a loan by Millsite to Mr Deng, an implied term arose that the loan was "repayable on demand". (Page 14)
42 As to whether the term dealing with the time for repayment was void, Counsel for the appellant submitted (at AB223 - 4) that it was difficult to make any finding as to what the term of repayment was, as Mr Curran's evidence in that regard was vague and inconsistent. Nevertheless, even if the part of the term which provided for payment when Mr Deng had available funds was void for vagueness, counsel submitted that the other part of the term, that is, that Mr Deng would pay when the newly formed company made profits, was not void for uncertainty. It therefore seems that counsel for the appellant submitted that the term for payment was partially valid, but that the time for payment had never arrived because the overseas company was never formed. 43 Although the learned Magistrate did not explain his reasoning process following from these submissions, his finding was in my view, open on the evidence. 44 The law regarding the issue whether a term in a contract providing for the time of payment is void for uncertainty was summarised by Master Newnes (as he then was) in EFF Ltd v Mygid Pty Ltd [2004] WASC 174 at [21] – [32]. His Honour held that whilst it is trite law that the courts will strive to give legal effect to a bargain, particularly a commercial bargain made between business people, there are also occasions when the bargain is not one to which the court can attach a legal obligation sufficiently definite to be enforceable. His Honour referred to G Scammell & Nephew Ltd v HC & JG Ouston [1941] AC 251 at 268 - 269 where Lord Wright said that in order to be binding a term must be so definite, or capable of being made definite without further agreement of the parties, that the promises and performances to be rendered by each party are reasonably certain. 45 Master Newnes referred to a number of cases in which the term describing the time for payment was relatively vague, but was nevertheless held to be enforceable. His Honour said the following in this regard: "In Chasemore v Turner (1874) LR10QB 500 a promise to pay "as soon as we can get our affairs arranged" was held sufficient consideration to give rise to an enforceable agreement: see also Waters v Thanet (1842) 2 QB 757 and Hammond v Smith (1864) 33 Beav 452. In Fettes v Robertson [1921] WN 136 a promise by the defendant to pay a debt "when he could" was held enforceable. (Page 15)
In Ledingham v Bermejo Estancia Co Ltd [1947] 1 All ER 749 the defendant company was in financial difficulties and the plaintiff, in order to induce it to carry on, agreed to waive payment of interest on a loan "until such time as the company is in the position to pay the interest". It was held that that meant until the company was in the position to pay the interest out of income, it being at that time in a position to pay out of capital if its assets were sold. It was held that there was an enforceable agreement under which, in consideration of carrying on, the defendant was not liable to pay interest until it was in a position to pay it out of income. In Head v Kelk (1962) 63 SR (NSW) 1363, the borrower agreed to repay the loan "when [he] was financially able to do so and not before". It was argued that that did not constitute consideration and the agreement was so vague and uncertain as to be unenforceable. That was rejected by the Full Court of the Supreme Court of New South Wales, which held that there was an enforceable contract on those terms." 46 Master Newnes also referred to three cases in which the term dealing with payment was held to be not sufficiently certain to be enforceable because it conferred on the debtor a discretion to determine whether, and to what extent the debt was to be repaid. In Bailes v Modern Amusements Pty Ltd [1964] VR 436 the agreement was that loans by a shareholder to the company would be repayable when the company "considered that it was in a position to pay them". Scholl J held that this raised a number of questions as to who on behalf of the company had to be of the view that the company was in a position to repay the loans, whether they were all payable at once and whether the payment could be made out of capital or income only, or out of gross or net profits. Scholl J came to the conclusion that this was not a case in which there was no promise at all to repay. The agreement provided for a loan and that, without more, would import an obligation to repay on demand. The superadded condition purporting to limit the right to repayment was either illusory or not sufficiently certain to be enforceable, because it involved an arbitrary discretion by the company and the wording of the promise allowed for a number of alternative meanings. 47 In Argyll Park Thoroughbreds Pty Ltd v Glen Pacific Pty Ltd (1993) 11 ACSR 1 the agreement was that loans were only repayable by one company to a related company when the directors of the borrowing company felt that it was in a position to make repayment in part or in (Page 16)
whole. Drummond J held at p 4 that the agreement had left it to the subjective determination of the directors of the borrowing company when, if ever, the loan would be repaid. This was an illusory stipulation for payment, but did not mean that the whole agreement for a loan was invalid. His Honour referred to Bailes v Modern Amusements Pty Ltd (supra) at 441 and Chitty on Contracts 26 Ed at par 352, for the proposition that where there was an agreement for a loan, but the time for repayment was not fixed, any money advanced would be repayable on demand. 48 Drummond J suggested that the true distinction between Head v Kelk and Bailes v Modern Amusements Pty Ltd was whether the agreed time for repayment could be determined objectively, in which case the term would be valid, or whether it required a subjective decision by the borrower, in which case the term would be void as illusory. 49 In Universal Greening Pty Ltd v Sabine (1999) 17 ACLC 880 the agreement between a company and its directors was that loans made to the company would only be repayable when the company either through cash flow or through the provision of further capital could afford to do so. Kenny J held at [22] that this agreement was void for uncertainty because it left it to the company to decide when, if at all, the occasion for repayment might arise. Her Honour noted that as in Bailes v Modern Amusements Pty Ltd this term prompted in the mind of the reader a whole series of questions as to what the parties intended. However, the fact that the term dealing with repayment was void for uncertainty did not mean that there was not a valid loan agreement. Where the time for repayment was not fixed by agreement, any money advanced would be repayable on demand. Her Honour added at [25], in reliance on Bunbury Foods Pty Ltd v National Bank of Australasia Ltd (1984) 153 CLR 491 at 502 - 503, that a debtor is entitled to a reasonable time to comply with a demand. 50 A further case in which a loan upon terms that "would be for as short a time as possible, repaid as soon as we can see our way clear in a cash management situation" was held to be repayable on demand is Woods Bagot Pty Ltd v Poppy Lodge Pty Ltd (1995) 65 SASR 583 at 587. 51 In EFF Ltd v Mygid Pty Ltd (supra) at [32] Master Newnes also came to the conclusion that a promise to "work towards trying to repay" money by a certain date was too vague to be enforceable. (Page 17)
52 In light of these authorities it was open to the learned Magistrate to come to the conclusion that there was not a sufficiently defined or certain term regarding repayment of the credit card payment and that in its absence the loan by Millsite to Mr Deng was repayable on demand. Mr Curran was not able to give a precise description of the content of the agreement. He first said that he had told Mr Deng that the money was repayable "when the company is up and running" or when Mr Deng "had funds available" (at AB172). Mr Curran explained that when the company was formed the repayment would "come out of … (Mr Deng's) share" and that Mr Deng was waiting on money "coming through from a property" At a later stage Mr Curran said that the loan was repayable when the company was up and running and produced some profits (AB201). He then said that "a proportion" of the profits would be used to repay the loan, without explaining what that proportion would be. 53 Similar to the situation in Bailes v Modern Amusements Pty Ltd and Universal Greening Pty Ltd v Sabine the term dealing with repayment raised more questions than it answered. The agreement does not spell out whether the availability of funds by Mr Deng was tied to the proceeds from a particular property, which property that was or whether the obligation to pay when funds were available remained if the property did not generate the required funds. It is also not certain what is meant by "available funds". Were these funds available from selling capital assets or only from cash flow? As regards the term making repayment conditional upon an overseas company being formed and producing profits, questions again arise as to what type of profits were in contemplation of the parties, what proportion of the profits were to be used to repay the loan and whether the loan was to be paid in instalments as profits allowed or in one sum. 54 In light of the uncertainty of what was actually agreed between the parties and the vagueness of the term put forward by Mr Curran, it was open to His Honour to find that the usual term that a loan is repayable on demand after reasonable notice was not displaced by a more specific term regarding repayment. His Honour did not spell out his reasoning process to the extent that I have done, but counsel for the appellant had argued these issues in his submissions and had referred his Honour to EFF Ltd v Mygid Pty Ltd and Argyll Park Thoroughbreds Pty Ltd v Glen Pacific Pty Ltd (supra). It therefore seems readily apparent what reasoning was adopted by his Honour. (Page 18)
Costs order 55 Although his Honour initially had been under the impression that there was a different scale of costs depending on the amount recovered, it seems that he ultimately accepted the submissions by counsel for the respondent that there was only one scale of costs and that costs should follow the event. His Honour then stated that Millsite had been successful as to a substantial amount of its claim and that he therefore had come to the conclusion that Mr Deng should pay Millsite's costs. His Honour made the statement hat the costs should be "taxed on a scale applicable to the amount recovered", but then qualified this by saying that as there was no different scale of costs in respect of various amounts, this was only a reminder to the taxing officer to take into account the amount recovered in exercising her discretion. 56 Counsel for the appellant submits that a proper exercise of the discretion in relation to costs would have been to apportion the costs between the parties or to make no order as to costs. Section 25(1) of the Magistrates Court (Civil Proceedings) Act 2004 allows the Magistrates Court to order a party to pay the whole or part of another party's costs. However, s 25(2) provides that a successful party is entitled to an order that the whole of its costs in the case be paid by the unsuccessful party, unless the Magistrates Court considers that there is good reason not to make such an order or subsection (5) applies. Sub-section 25(5) deals with matters where the value of the claim is not more than the minor cases jurisdictional limit. This issue does not apply to the present case as the minor cases jurisdictional limit is currently $10,000 and was the same at the time that the learned Magistrate made his decision. 57 An apportionment of costs may be made by a court where a party has been successful on some issues, but failed on others, but the general rule is that costs follow the event, unless there are special circumstances justifying an apportionment: Hughes v Western Australian Cricket Association (Inc) (1986) ATPR 40 – 748 at 136 – 7. In this case the evidence regarding the agreement to repay the travel expenses and the evidence regarding the agreement to repay the credit card loan overlapped to a large extent and it was not the case that the court spent substantial time dealing with matters regarding the travel expenses which had no relevance to the claim in respect of which Millsite was successful. 58 A court's decision with regard to costs is a discretionary one and the judgment as to apportionment an evaluative one: Australian Trade Commission v Disktravel [2000] FCA 62 at p 4 and Dodds Family (Page 19)
Investment Pty Ltd v Lane Industries Pty Ltd (1992 – 93) 26 IPR 261 at 271. 59 There is no reason to interfere with the discretionary judgment by his Honour in deciding the matter of costs. His Honour did not commit an error of principle. The fact that His Honour gave a direction to the taxing officer to take into account the amount of the claim when assessing the costs does not mean that His Honour took into account irrelevant material when he made his discretionary decision. It would not be unusual for a taxing officer to consider the amount of a claim in deciding how much should be recoverable under a particular item on the applicable costs determination.
Conclusion 60 The appellant has failed to establish any of any of the three grounds of appeal and the appeal is dismissed. |