George Pegios v Simon Rez - [2022] NSWSC 837

Supreme Court

New South Wales

Medium Neutral Citation: George Pegios v Simon Rez [2022] NSWSC 837
Hearing dates: 21 June 2022
Decision date: 23 June 2022
Jurisdiction: Equity
Before: Hammerschlag CJ in Eq
Decision:
Proceedings dismissed

Catchwords:
CONTRACT – Claim by the plaintiff that he lent $170,000 to the first defendant for a period of two years at an interest rate of 5% per annum pursuant to an oral agreement – the first defendant denies the loan – reliance on spoken words to establish cause of action – conversation must be proved to reasonable satisfaction of the Court – HELD – Loan not proved

Cases Cited:
Briginshaw v Briginshaw (1938) 60 CLR 336
Helton v Allen (1940) 63 CLR 691
Rejfek v McElroy (1965) 112 CLR 517
Sergei Sergienko v AXL Financial Pty Limited [2021] NSWSC 297
Watson v Foxman (1995) 49 NSWLR 315

Category: Principal judgment
Parties: George Pegios - Plaintiff
Simon Rez - First Defendant
Reka Consultants Pty Limited - Second Defendant
Representation:
Counsel:
P Doyle Gray - Plaintiff
J Young, A Lim - Defendants
Solicitors:
First Choice Legal - Plaintiff
Swaab - Defendants

File Number(s): 2020/173791

JUDGMENT

introduction

HIS HONOUR: The determinative question in this case is: did the plaintiff (to whom I will refer as George) lend the first defendant (to whom I shall refer as Simon) $170,000 in 2017?
First names are used with no disrespect intended.
The answer to the question turns on whether George is to be believed with respect to a conversation which he says he had with Simon “in or around June 2017, and after 11 June 2017”, when Simon asked for a loan, which George says he then made.
Simon denies this conversation. He says that there was no loan, but that George asked him to help hide money from his (George’s) estranged wife Mariana Arambasic (Mariana), and that $120,000 was paid over to Simon’s company (the second defendant, Reka) and repaid to Simon in cash over time by way of five payments. Simon says that another $50,000 was given to him by George as a gift. George denies this.
George sues for repayment of the alleged loan, together with interest.
George bears the onus of establishing the loan. He asserts no other form of transaction or entitlement to payment.
The parties’ respective positions are irreconcilable. There is no room on George’s case for a finding of liability (in whole or in part) on Simon on any basis other than non-repayment of the loan. By the same token, in Simon’s case, no question of repayment of a loan can arise, and he bears no onus to establish the existence of the alleged gift, although, if he does, it is destructive of George’s case.
I am unpersuaded that George made the loan.
Far from feeling an actual persuasion that the conversation relied on by George took place, I consider that it is more probable than not that there was no loan, but that there was an…

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: [2022] NSWSC 837
Decision Date: 23 June 2022

CaseChat Overview and Summary

The matter before the court involved a claim by the plaintiff, George Pegios, against the first defendant, Simon Rez. The plaintiff alleged that he had lent $170,000 to the first defendant over a period of two years at an interest rate of 5% per annum, pursuant to an oral agreement. The first defendant denied the loan and denied any such agreement. The case hinged on the plaintiff's ability to prove the existence of the loan and the terms of the agreement through oral testimony alone, as there was no written documentation. The court was tasked with determining the credibility of the plaintiff's evidence and deciding whether the loan had indeed been made under the terms claimed.

The primary legal issues before the court were the burden of proof required to establish the existence of an oral contract and the sufficiency of the plaintiff's evidence in proving the loan and its terms. The court had to assess whether the plaintiff's testimony was credible and convincing enough to satisfy the standard of proof, which in civil matters is the balance of probabilities. The court also needed to consider whether the plaintiff's reliance on spoken words alone was sufficient to establish a legally binding agreement. Furthermore, the court had to determine the weight to be given to the first defendant's denial and whether it sufficiently rebutted the plaintiff's claims.

The court carefully considered the evidence presented by both parties. It found that the plaintiff had not provided sufficient evidence to prove the existence of the loan on the balance of probabilities. The plaintiff's reliance on his own testimony and the absence of any corroborative evidence, such as bank records or witness statements, did not meet the required standard. The court was not convinced that the conversation had indeed taken place or that the terms alleged by the plaintiff were accurate. Consequently, the court dismissed the plaintiff's claim, finding that the loan had not been proved. The court also considered the first defendant's denial as a significant factor in its decision.

In light of the court's findings, the plaintiff's claim was dismissed in its entirety, with no orders for costs. The court concluded that the plaintiff had failed to discharge the burden of proof necessary to establish the loan agreement as claimed.

Orders