Fels v Schnitzerling

[2021] QCA 103

[2021] QCA 103

COURT OF APPEAL

FRASER JA
MAZZA AJA
DAVIS J

Appeal No 404 of 2021
DC No 929 of 2017

ROSS GREGORY FELS  Appellant

v

DENISE SCHNITZERLING  Respondent
AS PERSONAL REPRESENTATIVE OF THE
ESTATE OF SYDNEY MARSDEN

BRISBANE

WEDNESDAY, 12 MAY 2021

JUDGMENT

FRASER JA:  After a trial in the District Court judgment was given in favour of Mr Marsden, the plaintiff, requiring the appellant and his daughter, the first and second defendants, to pay Mr Marsden $226,428.93, together with interest from the date of commencement of the proceeding.  Mr Marsden died before this appeal could be heard and the Court has made an order substituting for him as the respondent his personal representative.  The appellant’s notice of appeal contends that he was denied procedural fairness and the primary judge erred in accepting the evidence adduced for Mr Marsden.

Mr Marsden’s partner, the current respondent Ms Schnitzerling, was a close friend of the appellant’s wife and the two couples socialised together.  In September 2013, Mr Marsden won more than $2 million gambling at a hotel.  He and his partner offered to give the appellant and his wife $50,000.  Mr Marsden’s evidence was that he gave that money by two cash payments of $20,000 and one of $10,000 by December 2013.  The appellant’s evidence was that there were three cash payments of $10,000, leaving $20,000 of the proposed gift unpaid.  And the appellant’s wife’s evidence was to similar effect.

Mr Marsden gave evidence to the following effect.  In December 2013, the appellant asked Mr Marsden for a loan of about $48,000 to stop the appellant’s daughter’s house from being repossessed.  The appellant said he would give Mr Marsden a “proof of debt” and a “method of repayment”.  The appellant made similar statements until, in late February, he said he had to go to court to try to stop his daughter’s eviction.  In response, Mr Marsden said he would get a bank cheque.  The appellant told Mr Marsden not to do that because the appellant would not know the full amount until going to court.

Subsequently, Mr Marsden’s partner rang Mr Marsden and told him that the amount was $152,000.  Mr Marsden authorised his partner to obtain a bank cheque payable to Permanent Custodians, which was the named mortgagee of the appellant’s daughter’s house.  Mr Marsden subsequently had conversations with his partner to the same effect in relation to requests during March 2014 for further bank cheques payable to Permanent Custodians of $60,000 and $14,358.45.  In relation to the last payment, in a conversation with the appellant and his wife, Mr Marsden was told that the appellant’s daughter’s house was being repossessed and there was an eviction notice.  In response, Mr Marsden said he would lend the money and he was not going to let those bastards take the house.

Mr Marsden gave evidence that when the appellant and his wife came to the house and thanked them, he reminded them that it was only a loan and not a gift and he did not care if it took two to three years or whatever it was.  The appellant and his wife thanked him and acknowledged that it was a loan.  After Mr Marsden made the final payment, he rarely saw the appellant and his wife, and the relationship seemed to sour.

Subsequently, Mr Marsden received a “certificate of indebtedness” signed by the appellant.  The certificate, exhibit 1 in the trial, is dated 29 January 2015.  The appellant’s signature is witnessed by a Commissioner for Declarations.  The certificate recites that the appellant certifies that the listed amounts (which matched those amounts described in Mr Marsden’s evidence): “were received by me from Mr. Frank Marsden … for the purpose of settling the claims made … by Permanent Custodians Limited …”  The certificate concludes that: “It has always been understood that the $226,428.93 was made as a loan and has to be repaid.”

The appellant, who represented himself in the District Court and again in this appeal, put to Mr Marsden in cross-examination that the statement of claim specified that the appellant personally approached Mr Marsden and asked specifically for the amounts of the subsequent bank cheques.  In answer, Mr Marsden referred to thinking that was misconstrued.  He said that the appellant asked him originally for $48,000 and he would find out the exact amounts after going to court.  As it turned out, that was on three separate occasions.  Mr Marsden agreed in response to subsequent questions that the appellant did not personally ask him for those amounts.

Ms Schnitzerling gave evidence to much the same effect as the evidence given by Mr Marsden.  There were, as was submitted in this appeal, some inconsistencies in the details in the evidence given by Mr Marsden and the evidence given by Ms Schnitzerling.

The appellant gave evidence to the following effect.  He had not asked for $48,000 or for any money in December 2013.  The only money mentioned was the $50,000 to be paid as a gift.  When the gift was discussed, Mr Marsden mentioned how much he hated the financier said to have been behind Permanent Custodians.  There was no talk of loans.  The appellant’s wife rang up Mr Marsden’s partner and picked up the bank cheque for $152,070.48.  She gave it to the appellant.  He gave it to his daughter.  She gave it to the lawyers representing the mortgagee of her property.  The appellant gave detailed evidence about his daughter’s litigation about the house.  His evidence about the bank cheque for $60,000 was similar to his evidence about the preceding bank cheque.  In relation to the bank cheque for $14,358.45, the appellant said his wife spoke to Mr Marsden’s partner about taking the money out of the “gift money”, of which the appellant said $20,000 remained outstanding.  The appellant denied he had any discussion about owing Mr Marsden money or about a proof of debt or a payment plan.

The appellant gave evidence that the acknowledgement of debt was “an appeasement to try and protect the friendship between my wife and Ms Schnitzerling”.

Counsel for Mr Marsden cross-examined the appellant about a statement of claim the appellant had prepared and signed in a claim he brought against Permanent Custodians Ltd.  In that statement of claim, the appellant alleged that he “took possession from Mr Marsden of a bank cheque for $152,070.48 made payable to Permanent Custodians Limited”, Mr Marsden provided to the appellant a bank cheque for $60,000 made payable to Permanent Custodians Limited”, and the appellant “was forced to borrow a further $14,358.45 from [Mr Marsden] to stop Permanent Custodians Limited depriving his daughter and his grandchildren of their home.”  Understandably, the appellant had very considerable difficulties in reconciling those statements with his evidence.  After acknowledging he was “between a rock and a hard place”, he said he had made false statements in his statement of claim.

The appellant’s wife gave evidence which was substantially consistent with the evidence of the appellant.  The appellant’s son gave evidence that he overheard Mr Marsden insisting that he give money to sort the circumstances out.  It emerged in cross-examination that, for various reasons, the appellant’s son did not have a good recollection of any discussions about the money.

The trial judge did not accept that the appellant drew up the acknowledgment of debt in an effort to save the friendship between his wife and Mr Marsden’s partner.  Her Honour noted that the appellant’s wife did not say that there was any pressure by Mr Marsden’s partner for that to occur.  The trial judge referred to an email dated 24 August 2016 to Mr Marsden’s solicitor, in which the appellant had stated that there had never been an agreement stating: “payable on demand” and that “the only timeframe that was mentioned to me was, “I don’t care if it takes two years or five years”.”  And as the trial judge observed, that suggested that there had been previous discussion about repaying the money.  The trial judge noted that the appellant’s statement of claim against Permanent Custodians acknowledged that the appellant had borrowed the money from Mr Marsden.  The trial judge did not accept the appellant’s evidence that he did not ask Mr Marsden for money, although the trial judge did accept, as Mr Marsden had acknowledged in evidence, that the appellant did not personally ask for the particular amounts making up the loan.  The trial judge accepted the evidence of Mr Marsden and his partner in preference to the evidence given by the appellant, his wife and their son.

Grounds 7, 9 and 10 of the appellant’s notice of appeal contend that the trial judge erred in various ways by accepting the evidence in Mr Marsden’s case.  The appellant’s arguments encounter the obstacle that the trial judge’s findings derived powerful support from the appellant’s unambiguous statements in his “certificate of indebtedness”, his statement of claim against Permanent Custodians and his email to the respondent’s solicitors.  As I have indicated, there were inconsistencies within the evidence in Mr Marsden’s case, but so much is to be expected in honest evidence given by witnesses who give a reliable account of the substance of a transaction some time after the relevant events.

It is necessary to bear in mind that the trial judge had the advantage of seeing and hearing the evidence unfold and her Honour’s findings of fact were necessarily affected by her impressions about the credibility and the reliability of the witnesses.  In these circumstances, those findings are not vulnerable to challenge “unless they are demonstrated to be wrong by incontrovertible facts or uncontested testimony”, or they are “glaringly improbable” or “contrary to compelling inferences”: Robinson Helicopter Co Inc v McDermott (2016) 90 ALJR 679 at [43], referring to Fox v Percy (2003) 214 CLR 118. The appellant’s arguments could not and do not purport to satisfy that requirement.

Grounds 1 to 5 of the notice of appeal contend for denials of procedural fairness for the central reason that Mr Marsden’s amended statement of claim did not specifically plead the conversation in which the appellant initially sought a loan for the benefit of his daughter.  The generality of the allegations in the statement of claim left scope for evidence of that character.  Furthermore, after the evidence in Mr Marsden’s case was given, the appellant and his witnesses gave responsive evidence to the evidence given in Mr Marsden’s case.  The appellant was not disadvantaged by his perception of the nature of the case brought by Mr Marsden.  Having examined the transcript of the trial, I have been unable to find any substantial basis for the proposition that the appellant was denied procedural fairness.

Ground 6 contends that the primary judge erred by relying upon statements in the appellant’s statement of claim against Permanent Custodians.  No basis appears for thinking that the primary judge was not entitled to take into account the cross-examination of the appellant upon his own pleading.

Ground 8 contends that there was no court order made against the appellant’s daughter about non-payment of a mortgage.  That is a peripheral matter which is of no material significance for the judgment against the appellant.

For these reasons, I would dismiss the appeal.

MAZZA AJA:  I, too, would dismiss this appeal for the reasons given by Appeal Justice Fraser.

DAVIS J:  I agree with the order proposed by Justice of Appeal Fraser and the reasons given by his Honour.

...

FRASER JA:  Well, in that case, I would order that because the respondent is the successful party, the order should be that the appellant pays the respondent’s costs of the appeal.

MAZZA AJA:  I agree.

DAVIS J:  I agree.