Hrga v Hrga - [2010] WADC 15

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS

LOCATION: PERTH

CITATION: HRGA -v- HRGA [2010] WADC 15

CORAM: PRINCIPAL REGISTRAR GETHING

HEARD: 1 FEBRUARY 2010

DELIVERED : Delivered Extemporaneously on 1 FEBRUARY 2010 typed from tape and edited by the Principal Registrar

FILE NO/S: CIV 219 of 2009

BETWEEN: ESTHER HRGA
Plaintiff
AND
GIORDANA HRGA
Defendant

Catchwords:

Summary judgment - Turns on its own facts

Legislation:

Nil

Result:

Application dismissed

Representation:

Counsel:

Plaintiff: Mr C P Stokes
Defendant: Mr M Curwood

Solicitors:

Plaintiff: Chris Stokes & Associates
Defendant: Curwood & Co

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

Ansearch Ltd v Wavtech Pty Ltd [2006] WASC 184
Australian Can Co Pty Ltd v Levin & Co Pty Ltd [1947] VLR 332
Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87
General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125
Morgan v Pallister [2004] WASC 188
Webster v Lampard (1993) 177 CLR 598

PRINCIPAL REGISTRAR GETHING: By application filed 7 December 2009 the plaintiff, Ms Esther Hrga, has sought summary judgment against the defendant, Ms Giordana Hrga. The judgment sought is in the amount of $130,000 together with interest.
The plaintiff's claim as set out in the statement of claim annexed to the writ of summons filed 29 January 2009 is that pursuant to an agreement made in or about August 2004, the plaintiff and her late husband, George Hrga, lent the defendant the sum of $130,000. The statement of claim goes on to allege that the loan was repayable on demand, that demand was made, and that no moneys have been paid in relation to the loan.
In support of this application, the plaintiff relied on her affidavits sworn 25 November 2009 and 15 December 2009, and an affidavit of one Steven Fidock sworn 17 January 2010. Mr Fidock is a solicitor who had acted on behalf of the plaintiff in respect of an application for the grant of probate for the estate of the late George Hrga. Mr Fidock also deposes to having received instructions from the plaintiff to recover the outstanding debt said to be owed by the defendant to the plaintiff.
In opposition to the application, the defendant filed an affidavit sworn 19 January 2010.
The application was made out of the relevant time period requirement. Accordingly, the plaintiff needs leave to bring it. The defendant did not oppose the grant of leave. I am minded to grant leave on the basis that no significant work has occurred in the action in between when the time for the summary judgment application to have been filed expired and the date of the present application.

Relevant Law

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 that there is no real question to be tried: Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87 at 99. Great care must be exercised to ensure that under the guise of achieving expeditious finality a party is not improperly deprived of its opportunity for the trial of the case in the appointed manner by the court: General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 129-130.
The burden of persuasion in a summary judgment application was considered by Pullin J, as his Honour then was, in Morgan v Pallister [2004] WASC 188 at [4] in the following terms:
"The plaintiff carries the burden of persuading the court that the claim is a good one, that there is no defence to it, that leave to defence should not be granted, and that judgment should be given for the plaintiff. The party showing cause against the application assumes an evidentiary burden but the overall legal burden of persuasion remains on the applicant. The power to order summary judgment should be exercised with great care and should never be exercised unless it is clear that there is no real question to be tried. It is clear, however, that the procedure is not confined to cases which are immediately plain and obvious and the fact that a transaction is intricate does not disentitle the plaintiff to relief in a clear case. It was never intended that when the facts are in dispute, an action should be disposed of summarily. If a defendant's affidavit reveals inconsistencies which might in a trial persuade a court not to believe the defendant's evidence, this will not necessarily lead to judgment for the plaintiff. It is not necessary to cite authority for these propositions."
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 at 608. In the same case, the members of the High Court had previously commented that: "the issue before the learned Master on the application for summary judgment was whether the material before the Master demonstrated that the action should not be permitted to go to trial in the ordinary way because it was apparent that it must fail" (at 602).
If after argument there remains real uncertainty as to the plaintiff's right to judgment, without further investigation of the facts, summary judgment must be refused: Ansearch Ltd v Wavtech Pty Ltd [2006] WASC 184 at [28]; Australian Can Co Pty Ltd v Levin & Co Pty Ltd [1947] VLR 332 at 335.

Plaintiff's claim

The determination of the present case turns on what agreement was made in or about August 2004 pursuant to which the plaintiff and the late George Hrga forwarded the sum of $130,000 to the defendant. It is not in issue that an amount of $130,000 was forwarded by at least George Hrga to the defendant in or about August 2004. The plaintiff's case is that this was a loan.
In her first affidavit, the plaintiff deposes that she has read the statement of claim, and stated the facts in the statement of claim are true to the best of her knowledge, information and belief (par 3). The plaintiff does not go into any detail as to the communications and conversations surrounding the agreement made in or about August 2004.
The essence of the plaintiff's case before me is that there is a series of conduct by the defendant after the date on which the money was forwarded which is consistent, and only consistent, with the agreement between the parties being a loan.
The plaintiff points to three pools of evidence. The first is a statutory declaration signed by the plaintiff in July 2005. That statutory declaration is annexure EH1 to the plaintiff's first affidavit. The declaration is:
"I am responsible for the repayment of the outstanding balance of the Bankwest Mastercard account 543568893110278. I am also responsible for repayment of $130,000 to RAMS loan account 001553080."
The plaintiff says that this is a clear admission that the arrangement between the parties was a loan.
The second pool of evidence relied on by the plaintiff is that contained in Mr Fidock's affidavit. In particular, Mr Fidock deposes that in early 2006 he received instructions from the plaintiff to recover and outstanding debt owed by the defendant to the plaintiff. He further deposes that in the period from February 2006 through to April 2006, he was in communication with the defendant about negotiation of a deed of acknowledgment of debt.
The recitals to the deed (which is annexed to Mr Fidock's affidavit as Annexure SF2) are that in August 2004 Jure (which I understand to be George) and Esther Hrga were granted a loan to RAMS and agreed to grant a mortgage over 333B Albert Street, Balcatta as a security. I pause here to note that it seems common ground between the parties that this should be 333A Albert Street, Balcatta.
The recitals then go on to state that on 23 August 2004 RAMS advanced a loan to Jure Hrga and Esther Hrga for $150,000 in loan account 0011553080 secured by mortgage over 333B Albert Street, Balcatta repayable by equal calendar monthly instalments of principal and interest at 7.24 per cent per annum over a term of 20 years. The recitals then provide that the proceeds of the RAMS loan in the amount of $130,000 were advanced to the defendant at the defendant's request. The plaintiff asserts that the chain of correspondence between the defendant and Mr Fidock is consistent, and only consistent, with the arrangement between the parties being a loan.
The third pool of evidence relied on by the plaintiff is in her second affidavit. This affidavit annexes a number of text messages between the plaintiff and the defendant relating to the matters currently in issue. In these text messages, of which there are four annexed, the defendant talks about a loan. At no stage in these text messages does she refer to it as a gift. Rather, she talks in terms of difficulties with repayments.
On these bases, the plaintiff says that the defendant's version of the facts is so inherently incredible that consistent with decisions such as Webster v Lampard (supra) which I have quoted there ought to be summary judgment.

Defendant's claim

The position of the defendant is, firstly, set out in defence dated 3 November 2009. In the defence, the defendant pleads that in or about August 2004, the defendant's father, the late George Hrga, gifted to her to sum of $130,000. If a court accepted that the arrangement pursuant to which the $130,000 was transferred or was a gift, then it would follow that there would be no obligation on the defendant to repay it and the plaintiff's claim would fail.
However, as I have mentioned, the plaintiff asserts that the facts which I have referred to mean that the defendant's version of the facts, namely that it was a loan, are inherently incredible.
The defendant elaborates on the arrangement pursuant to which the $130,000 was transferred in her affidavit (par 7).
"I was present at a meeting between my father and Ms Crews when my father discussed the loan and his intention to give me approximately $130,000 of the loan amount. Ms Crews asked my father (in my presence) whether he required any security from me. My father replied 'No,' and went on to say words to the effect that he did not want or need security because, 'she is my daughter and if she can pay it back, that would be good and if she can't, that's fine as well because she had as much right to share in my assets with Adrian and Adrianna.'"
The reference to Ms Crews is a reference to Ms Lori Crews of All Finance Osborne Park who appears to have been instructed by George Hrga to arrange the loan secured over 333A Albert Street, Balcatta. The reference to Adrian and Adrianna is to Adrian and Adrianna Hrga who are the children that George Hrga had with the plaintiff.
The defendant then goes on to depose in par 8 that her father said to her on several occasions at the time the loan was being organised that if she could repay him out of the money that he gave her, he would appreciate that; but if she could not afford or choose not to, that was completely acceptable. Critically, the defendant goes on to depose the following (par 8);
"I told my father at the time the loan was taken out that I would make all of the repayments on my father's mortgage until the property was inherited by Adrian (who was then 14). He told me that was fine and that in the near future he thought Adrian would be leaving school and Adrian could use the rent to pay the mortgage payment or he could sell the Property. All of my discussions with my father were in the context that it was my father's intention that Adrian would inherit the Property".
The defendant further deposes that her father's condition worsened quickly after August 2004 and he died on 4 January 2005. She then goes on to elaborate further conversations between herself and her father consistent with her understanding of the arrangement that the property at 333A Albert Street would be inherited by Adrian.
At par 11, the defendant deposes:
"In early 2005 after my father died I had a conversation with the Plaintiff about continuing repayments of my father's mortgage. These repayments included some debts of the Plaintiff that were secured over the property. I told the plaintiff that I would continue to make the loan repayments. I told her I would continue to make the loan repayments until Adrian inherited the Property. This conversation was in the context of her asking me to continue making payments and giving me a specific account number to make repayments into. She did not tell me during the conversation that Adrian was not going to be inheriting the property."
Then in par 15, she deposes:
"I made payments in reduction of the Rams (sic) loan until the loan was terminated in October 2008. I learned that Adrian was not inheriting the property but that the Plaintiff inherited it. I learned this in or about October 2008 when I received a text message from the Plaintiff also stating that she would look after Adrian in her will. In these circumstances I did not feel under any obligation to make repayments or any further payments to or for the benefit of the Plaintiff in the circumstances where my half brother did not inherit the property."
The defendant then goes on to depose in par 16 that the plaintiff was not present during any conversations she had with her father regarding him taking out the Rams (sic) mortgage and giving the money to her. From her affidavit, it appears that the arrangement, at least as the defendant understood it, was that the $130,000 was a loan. However, it was subject to effectively a condition that the lenders, being the plaintiff and George Hrga, would not demand repayment of the loan.
The arrangement that appears to have ensued is that while the defendant was under the understanding that her half brother Adrian would inherit the property at 333A Albert Street, she continued to pay the mortgage repayments. It appears from her affidavit that at the point in time when Adrian was going to inherit the property, he would take responsibility for the loan. He could either use the rent to pay the mortgage payments or he could sell the property.
This version of the defendant's case is consistent with her referring to the arrangement between the defendant and the plaintiff and George Hrga being a loan. It is consistent with her conduct in signing the statutory declaration and it is consistent with the tenor of the text messages.
In my view, if a Judge were to accept the facts as set out in the defendant's affidavit, the Judge at trial would find in favour of the defendant. However, this would be on the basis that there was a loan, but the loan was subject to a condition that the plaintiff and George Hrga would not demand repayment of it.
The fact that this is not pleaded in the defendant is not fatal to the defendant's defence of the summary judgment application. This is because in determining a summary judgment application the authorities direct me to look at the defendant's version of the facts.
I do not find the defendant's version of the facts as described to be inherently incredible, or at least I do not find that they are so incredible that there ought to be summary judgment. To my mind, after hearing argument, there remains real uncertainty as to the plaintiff's right to judgment without further investigation of the facts.
On those bases, I am of the view that summary judgment must be refused. I will hear counsel as to the formal of the ensuing orders.