Hrga v Hrga [No 2] - [2010] WADC 185

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION: PERTH

CITATION: HRGA -v- HRGA [No 2] [2010] WADC 185

CORAM: BIRMINGHAM QC DCJ

HEARD: 22-23 & 29 JULY 2010

DELIVERED : 10 DECEMBER 2010

FILE NO/S: CIV 219 of 2009

BETWEEN: ESTHER HRGA
Plaintiff
AND
GIORDANA HRGA
Defendant

Catchwords:

Oral loan agreement - Family arrangement - Legal or moral obligation to repay - Disputed terms of repayment - Post contractual conduct - Admissions by defendant

Legislation:

Rules of the Supreme Court 1971

Result:

Judgment for plaintiff

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):

Anaconda Nickel Ltd v Tarmoola Australia Pty Ltd (2000) 22 WAR 101
Bevan v The State of Western Australia [2010] WASCA 101
Chidiac v Maatouk [2010] NSWSC 386
Crafter v Singh (Unreported, WASC, Library No 8202, 12 April 1990)
Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95
Jones v Padavatton [1969] 1 WLR 328
Ogilvie v Adams [1981] VR 1041
RJ Baker Nominees Pty Ltd v Parsons Management Group Ltd [2010] WASCA 128
Sudojo Consulting Pty Ltd v Africa Pacific Capital Pty Ltd [2008] NSWSC 353
The Bell Group Ltd (in liq) v Westpac Banking Corporation [No 9] [2008] WASC 239

BIRMINGHAM QC DCJ:

Background

The genesis of this action has its origins in 1985, when George Hrga ('George') and the plaintiff (then 17 years old) commenced a relationship and later married. It was George's third marriage. The defendant is George's daughter from his first marriage and nine years older than her stepmother, the plaintiff.
There existed considerable ill‑will between the plaintiff and the defendant - the defendant seemingly resenting the plaintiff's relationship and subsequent marriage to her father. For many years the defendant and her father, George, were estranged and did not speak to each other. It was not until 2004, when the defendant became aware that her father was suffering terminal cancer that the defendant and George resumed speaking to one another. George died in January 2005. The relationship between the plaintiff and the defendant remains strained.
In August 2004 the defendant was in significant financial difficulty – with considerable debts outstanding. The defendant spoke to George about her difficulties and requested assistance. George then agreed to loan to the defendant $130,000. To facilitate the loan, George and the plaintiff took out a loan with RAMS for $150,000 of which $130,000 was advanced to the defendant in about late August 2004. As George was then an invalid pensioner the loan was taken out jointly by George and the plaintiff and secured over the unit in which George, the plaintiff and their children then lived.
By this action, the plaintiff seeks the repayment of the sum of $130,000 loaned to the defendant. The defendant admits receiving the funds advanced but denies that she has any obligation to repay the loan to the plaintiff.

The pleadings

Omitting the formalities, the plaintiff's pleaded…

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.

Continue reading Hrga v Hrga [No 2]

Details

AGLC: Hrga v Hrga [No 2] [2010] WADC 185
Case: [2010] WADC 185
Decision Date: 10 DECEMBER 2010

CaseChat Overview and Summary

This case involved a dispute between the plaintiff and the defendant regarding an oral loan agreement made between the plaintiff and the plaintiff’s late husband. The plaintiff sought a declaration that she was not liable to repay the loan, as the defendant had not provided evidence of the loan agreement and its terms. The case was heard in the Supreme Court of Western Australia.

The legal issues in the case were whether there was an oral loan agreement between the plaintiff and her late husband, and if so, what were the terms of the agreement. The court had to determine whether the plaintiff’s conduct and communications with the defendant after the loan was made could be used as evidence to establish the existence and terms of the agreement. The court also had to consider the weight to be given to the admissions made by the defendant.

The court found that the law permits access to extrinsic evidence of the conduct of the parties for the limited purpose of ascertaining whether a contract with the terms contended existed. The court noted that subsequent communications and conduct of the parties can legitimately be used as evidence to determine whether a binding agreement existed. In this case, the court found that the plaintiff’s conduct and communications with the defendant after the loan was made could be used as evidence to establish the existence and terms of the agreement. The court also found that the weight to be given to the admissions made by the defendant depended on the source of knowledge of the person making the admission.

The court ordered that the plaintiff was not liable to repay the loan as the defendant had not provided evidence of the loan agreement and its terms. The court also ordered that the defendant pay the plaintiff’s costs of the proceeding.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

For the purposes of determining this issue, namely the identification of the agreement and its terms, regard may be had to the conduct of and communication between the parties both before and after the formation of an allegedly binding agreement for the purpose of determining objectively whether they intended to form a binding agreement. The law permits access to extrinsic evidence of the conduct of the parties for the limited purpose of ascertaining whether a contract with the terms contended existed: TheBell Group Ltd (in liq) v Westpac Banking Corporation [No 9] [2008] WASC 239 [2668] ‑ [2672]; Anaconda Nickel Ltd v Tarmoola Australia Pty Ltd (2000) 22 WAR 101 [26] (Ipp J) and [127] (Anderson J). As noted by Newnes JA in RJ Baker Nominees Pty Ltd v Parsons Management Group Ltd [2010] WASCA 128 [66]:Evidence of the parties' subsequent communications is admissible for the light it casts on their dealings from which the contract was alleged to have arisen: Abigroup Contractors Pty Ltd v ABB Service Pty Ltd [2004] NSWCA 181 … [63]. A statement that there is or is not a concluded contract, if admissible, may carry significant weight or little weight depending on the circumstances, and the weight of any admission will depend upon the source of knowledge of the person making the admission: Sagacious Procurement Pty Ltd v Symbion Health Ltd (formerly Mayne Health Group Ltd) [2008] NSWCA 149 [106]. Subsequent conduct can also legitimately be used against the party as an admission of the existence or non-existence as the case may be of a subsisting contract: Sudojo Consulting Pty Ltd v Africa Pacific Capital Pty Ltd [2008] NSWSC 353 [20] (vi), (x) and (xi) (Einstein J). It is against this background that the evidence of the communications and conduct of the parties following the making of the loan needs to be considered, including what weight is to be attached to any admissions said to have been made by the defendant contrary to her interests. The plaintiff says she commenced a relationship with her late husband in 1985. He was then married to his second wife. She was 17 and he 34 years her senior. They married in January 1991and had two children, Adrianna born in May 1989 and Adrian in November 1991. In 1998 they purchased a pair of units at 333A and 333B Albert Street, Balcatta. One unit was put in Adrianna's name. The plaintiff says this was done as Adrianna was a chronic diabetic and was very ill as a child and George wanted to ensure that she was always provided for. They initially moved into the unit purchased in Adrianna's name and proceeded to renovate the adjoining unit. When the renovation was completed they then moved into that unit and the unit that was in Adrianna's name was then leased. In late 2003, George was diagnosed with terminal cancer. At that time the defendant began to speak to George again and would visit him. The plaintiff says that in late August 2004 when she came home from work George presented her with a loan application to borrow $150,000 from RAMS and asked her to sign the papers. The defendant was present and asked her to hurry up as she (the defendant) needed to take the papers to the bank that day. The plaintiff says that she signed as requested and the defendant then left with the documents. The plaintiff was not privy to the discussions relating to the terms of the loan.