Hrga v Hrga [No 2]
[2010] WADC 185
•10 DECEMBER 2010
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 case is:
3.By an agreement made in or about August 2004 ('the Loan Agreement') the plaintiff and the late George Hrga lent to the defendant the sum of $130,000 ('The Loan').
4.It was the term of the Loan Agreement that:
(a)the loan was repayable on demand;
(b)the plaintiff and the late George Hrga, to enable them to advance the loan to the defendant, would borrow the sum of $150,000 from RAMS Mortgage Corporation ('RAMS') secured by a first mortgage in favour of RAMS over the property located at 333A Albert Street, Balcatta and being all that piece of land held in and comprised in Certificate of Title Volume 1698 Folio 310 ('the Mortgage');
(c)the plaintiff and the late George Hrga would withhold demand for repayment on the Loan by the defendant provided the defendant made timeous and entire payments of the RAMS mortgage of her proportion (being 13/15th) of the principal and interest mortgage instalments due pursuant to the Mortgage.
5.Pursuant to the Loan Agreement the plaintiff and the late George Hrga:
(a)Entered into an instrument in writing dated 26 August 2004 with RAMS whereby RAMS agreed to lend to the plaintiff and the late George Hrga the sum of $150,000 secured by the Mortgage;
(b)On about 3 September 2004 advanced to the defendant the sum of $130,000;
(c)Thereafter commenced paying their proportion of the mortgage instilments (being 2/15th of those mortgage instalments).
6.In default of the Loan Agreement the defendant failed to make timeous and/or entire payment of her proportion of the principal and interest instalments due to RAMS under the Mortgage.
7.The late George Hrga died on 4 January 2005 and the cause of action herein survived to the plaintiff.
8.As at 21 January 2009 the defendant owed to the plaintiff the sum of $130,000 under the Loan Agreement.
9.Despite demand made by the plaintiff to the defendant on about 21 January 2009 the defendant has failed to repay to plaintiff the sum of $130,000 or any part thereof.'
Relevantly, by her amended defence dated 1 February 2010 the defendant pleads:
2.The defendant denies each and every allegation contained in paragraph 3 of the statement of claim. The defendant says further that in or about August 2004 the defendant's father; the late George Hrga ('the deceased') advanced to the defendant the sum of $130,000.
2A.The defendant says further that the advance by the deceased to the defendant in the sum of $130,000 to [sic] place in the following circumstances:
(a)In August 2004 the defendant found herself in a position of serious financial difficulty which she discussed with the deceased;
(b)The deceased told the defendant words the substance of which were that he wanted to help her and for her to have a share of his assets prior to his death. At the time of the conversation referred to the deceased was 71 years of age and had been diagnosed with terminal cancer;
(c)The deceased own two properties known as 333A and 333B Albert Street, Balcatta;
(d)The deceased informed the defendant he had transferred a house at 333B Albert Street, Balcatta to his daughter, Adrianna;
(e)In about August 2004 the deceased arranged a meeting with the defendant and Lori Crews of All Finance Osborne Park to extend a loan in the deceased name which was secured against the property 333A Albert Street, Balcatta ('the Property');
(f)In about August 2004 the defendant and the deceased agreed that the deceased would advance to the defendant $130,000 ('the Agreement'). It was a material term of the Agreement that:
(i)subject to (ii) below, the defendant would make repayments on the deceased's behalf in respect of $130,000 of the mortgage secured against the property until the property was inherited by Adrian Hrga, the defendant's half brother and the son of the plaintiff and the deceased ('Adrian');
(ii)the defendant did not have to make payments on the deceased's behalf with respect to $130,000 of a mortgage secured against the property if she chose not to or was unable to;
(g)The defendant will rely on the full terms of the agreement for the full terms in effect at trial.
3.The defendant denies each and every allegation contained in paragraph 4 of the Statement of Claim.
4.The defendant denies each and every allegation contained in paragraph 5 of the Statement of Claim. The defendant repeats the maters set out in paragraphs 2 and 2A of her Defence.
5.The defendant denies each and every allegation in paragraph 6 of the statement of claim. The defendant says further that she made from time to time payments of interest in reduction of the mortgage taken out by the deceased with RAMS until about October 2008 when the defendant learned that Adrian would not be inheriting the property but that the defendant had inherited the property from the deceased.'
The issues for consideration
Whether legal or moral obligation to repay advance
The defendant contends that the circumstances of the advance made by George were such that it was not intended to have legal consequences, that is to say, that it was a family arrangement giving rise to only a moral obligation rather than any legal requirement to repay the sum loaned. Such contention needs to be considered in the light of all the circumstances, including the relationship between the parties and, inter alia, the known fact that the plaintiff was to be a party to the loan and primarily liable for the repayment thereof to RAMS.
Counsel for the defendant submitted that there was a presumption in favour of not intending to create legal relations in a family relationship. In essence the defendant says that the obligation to repay the loan was a family arrangement and only repayable as a matter of honour rather than any binding legal obligation. Counsel for the defendant puts it as high as saying that the conduct of the parties and the question of the obligation should be judged against the background of a rebuttable presumption against the intention to create legally binding obligations in a family or domestic context.
As noted by Ward J in Chidiac v Maatouk [2010] NSWSC 386 at [179] referring to Jones v Padavatton [1969] 1 WLR 328, such presumption is said to be one of fact not of law and derived from the experience of life and human nature in that in such circumstances the intention is usually to rely on family ties of mutual trust and affection to secure repayment rather than any legal obligation.
Parties to loan/plaintiff's capacity to sue
Whilst on the pleadings there is an issue as to the plaintiff's capacity to seek recovery of the loan; that is to say, whether the loan was made by the plaintiff and George or just George alone, the determination of that issue does not materially impact on the success or otherwise of the plaintiff's claim. The plaintiff sues on her own behalf and in her capacity as the executor of George's estate. If the loan is a debt owing to the estate (and not to the plaintiff and George jointly) it is recoverable by the plaintiff in her capacity as executor. The plaintiff is the sole beneficiary to George's estate and will take the benefit of any judgment in favour of the estate in any event.
The terms of loan
The central issue for determination in this case is the basis upon which the sum of $130,000 was advanced to the defendant. Was it a loan repayable upon demand or an advance by George to his daughter intending to confer to her some benefit from his estate prior to his death whereby the repayment was contingent upon the defendant's willingness and capacity to do so – and further – whether her stepbrother Adrian inherited the property over which the loan was secured?
Facts not in issue
Whilst the background between the plaintiff and the defendant is such that there is a degree of hostility and distrust between them evident throughout these proceedings, there are some matters upon which there is common ground and are otherwise independently established by contemporaneous documents – the contents of which are not questioned. Relevantly, those matters are:
•As at August 2004 George, was a registered proprietor of 333B Albert Street, Balcatta and in receipt of a disability pension.
•On 23 August 2004 George and the plaintiff borrowed from RAMS $150,000 secured by a mortgage over 333B Albert Street, Balcatta. The loan was a variable interest loan for a term of 20 years with payments of interest only for the first year and thereafter payments of principal and interest. The borrowers liable to repay the loan were George and the plaintiff (exhibits 4, 5 and 6).
•After deduction of the stamp duty and registration charges of $1,742, of the balance of the sum of $150,000 borrowed from RAMS, $20,000 was paid to BankWest in respect of the plaintiff's and George's outstanding bank card debt. The balance of $128,935 was advanced to the defendant – and, at her direction, to creditors to whom she then owed money (exhibit 7).
•George died on 4 January 2005.
•On 20 September 2005 probate to George's will dated 16 January 2003 was granted to the plaintiff – the sole beneficiary to his real and personal estate (exhibit 14). George's real estate included 333B Albert Street, Balcatta.
Admissibility of evidence
In the present case there is no document or instrument executed by the parties evidencing the terms upon which the loan funds were advanced. The parties to the agreement were the defendant and the now deceased George. The only contemporaneous documents are the application for loan to RAMS and the subsequent distribution of the proceeds of the loan to the plaintiff and the defendant.
To the extent that the plaintiff was not privy to the making of the agreement between George and the defendant, the plaintiff seeks to prove the terms of the agreement through admissions allegedly made by the defendant or inferences reasonably drawn from the surrounding circumstances and contemporaneous documents. In such circumstances it is necessary to consider the extent to which reliance can be placed on post agreement conduct and the weight to be placed on it.
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 evidence
The plaintiff
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.
The plaintiff says that after the loan was granted by RAMS, the defendant commenced making the repayments. The plaintiff did not discuss the loan with the defendant until in or about July 2005 – following George's death - when the plaintiff had received letters of demand from RAMS indicating that the loan was then in default (exhibits 8 and 9), the defendant's loan repayments having been dishonoured (exhibit 72). The plaintiff sent a text message to the defendant and later spoke to her by phone and expressed her concern about the default. She told the defendant that if she did not make the loan repayments she would lose the house in which she and her children then lived. She sought some assurance from the defendant that she would continue making the repayments on the loan.
Shortly thereafter, the defendant sent to the plaintiff, by facsimile, a statutory declaration dated 23 July 2005 (exhibit 10) in the following terms (omitting formal parts):
I, Giordana Hrga...etc declare that:
I am responsible for the repayment of the outstanding balance of the BankWest MasterCard account 5435688931102789. I am also responsible for the repayment of $130,000 to RAMS loan account 001553080.
The defendant also requested the plaintiff to fax any documents she received concerning the loan to the defendant's finance broker, Ms Loriana Crews.
At about the same time the plaintiff instructed her solicitor Mr Steven Fiddock, in relation to seeking a grant of probate for her late husband's will and for advice in relation to securing repayment of the monies that were advanced to the defendant.
The plaintiff says that throughout the period following George's death her relationship with the defendant was poor and that she had little communication with the defendant other than by way of text messages.
During the course of the trial, the authenticity of copies of the text messages sought to be tendered by the plaintiff was challenged.
The plaintiff said that she arranged for a friend, Mr Selvidge, to print of the messages that she had stored in her phone from the defendant relating to this matter.
It was Mr Selvidge's evidence that at the request of the plaintiff, he used a program supplied with the mobile phone to download and copy the text messages onto his computer and then print them. As I understood his evidence he had compared the copy of each text message produced with the text message on the phone to verify the contents.
Regardless of any possible imperfections in the manner in which the copies had been created with regard to the requirements identified by the Court of Appeal in Bevan v The State of Western Australia [2010] WASCA 101, I ruled that they were admissible as copies and received them into evidence. It later emerged in the trial that the disputed copies tendered had been duly discovered and inspected by the parties pursuant to O 26 Rules of the Supreme Court. As no notice disputing the authenticity of the documents had been given, they were admissible pursuant to O 30 r 4 Rules of the Supreme Court in any event: Crafter v Singh (Unreported, WASC, Library No 8202, 12 April 1990) (Seaman J).
The plaintiff, somewhat candidly, admitted that she requested Mr Selvidge to only print off those texts from the defendant that were considered favourable to her case. As such any text messages that were considered unfavourable were not copied and were deleted from her phone. In such circumstances I approach with caution to that extent that I can safely rely on the any inference adverse to the defendant from the contents of any text message unless satisfied that communication from the defendant is contextually accurate and reliable.
Throughout late 2005 to early 2006 the plaintiff communicated with the defendant from time to time, usually by text message, in relation to any default notices that the plaintiff had received from the bank. At all times the defendant acknowledged her liability to pay the loan instalments albeit she expressing an inability to do so in the short term. Such sentiments were exemplified in the text messages sent by the defendant on 13 October 2005 (exhibit 17) and 13 January 2006 (exhibit 19). In the text message dated 13 January 2006 the defendant said to the plaintiff:
I can't pay out the mortgage. I am responsible 4 the loan and have made all payments and will keeping paying it. u won't get any more letters from the bank as of next month. u have nuthn 2 worry about. wen I can, I will pay it out, just as I paid out the credit card and 2000 2 u. I have also been paying ur own loan 4 past 18 months [sic].
The payment to which the defendant was referring in the last sentence related to the interest component on the plaintiff $20,000 proportion of the total loan that was advanced to the plaintiff and her late husband in September 2004. The plaintiff, in cross-examination, agreed that no payments had been made in relation to the $20,000 component of the loan between October 2004 and December 2005 as it was her understanding from what she had been told that the defendant was to make the repayments in respect of the whole of the loan for the first year. She says that she was told of the obligation to pay after the first year in a text from the defendant. The plaintiff says that at about this time Mr Robert Selvidge paid $1,900 on her behalf in respect of the plaintiff's proportion of the interest repayment relating to the sum of $20,000 borrowed by the plaintiff. The plaintiff acknowledged that $20,000 of the loan borrowed from RAMS was her responsibility and thereafter made arrangements for part of the debt to be debited from her account.
In early 2006, the plaintiff instructed Mr Fiddock to make arrangements to secure the defendant's obligation to repay the loan.
On 9 February 2006, Mr Fiddock on behalf of the plaintiff, wrote to the defendant seeking repayment of the loan or alternatively some arrangement to adequately secure the repayment of the loan to George's estate (exhibit 23). I shall come back to Mr Fiddock's communications with the defendant later in these reasons.
In September 2007, concerned by increasing interest rates, the plaintiff renegotiated the repayments of the RAMS loan to be 'interest only' for a period of five years (exhibit 40).
Throughout the period from 2007 to October 2008, the loan was frequently in default – RAMS advising the plaintiff by letter of the default and requesting her attention to the same (exhibits 46, 47, 48, 50, 53, 54, 58, 60, 62, 65 and 66). The plaintiff says on such occasions she would text the defendant, advise of the defaults and seek payment. The defendant response to one such request is seen in her text message dated 8 August 2008 (exhibit 59):
1 payment missing. earliest I can put it through is 21 aug as I just paid out all my bills, & that is my next pay day.
At no stage did the defendant dispute her obligation to pay the monthly repayment instalments for the loan.
In October 2008, the plaintiff renegotiated the loan with ANZ bank to secure a lower interest rate and thereafter informed the defendant of the changed arrangement. The defendant acknowledged her continuing liability by a text dated 24 October 2008 (exhibit 71) in the following terms:
I need copies of all the statements up to now and a copy of your new loan and interest rate so i can work out my proportion of the repayments. post to PO Box 1284 Subiaco 6904.
By late October the loan to ANZ bank was in arrears. The plaintiff says that she went to an automatic teller and checked the balance and saw that no funds had been paid by the defendant. The plaintiff says that she sent a text to the defendant and requested her advice as to when she was going to pay. The defendant replied that she was not going to make the repayments as she considered that the property over which the loan was secured should have been transferred to Adrian under George's will. Since that time, the plaintiff has made all of the payments on the loan.
In January 2009, the defendant having failed to make any further payments of the loan, the plaintiff instructed her solicitors to take action to recover the sum then outstanding. On 21 January 2009 the plaintiff's solicitors issued a letter demanding repayment and thereafter commenced proceedings for the recovery of the same.
The plaintiff rejected suggestion by counsel for the defendant that George had discussed with her the requirement for her to transfer the second unit to Adrian. The plaintiff further denied that she had sent a text to the defendant to the effect that she would be transferring the unit to Adrian in her will and not otherwise. The plaintiff says that any issue about the second unit being transferred to Adrian was not mentioned by the defendant until some years after George's death – and then only in response to the plaintiff's request that she repay the loan.
Robert Selvidge
Mr Selvidge is a friend of the plaintiff and assisted her following the death of her husband in finalising the will and probate. He said that he spoke with the plaintiff when she had received advice from RAMS that the loan was in default approximately six months after George's death. He said that when he saw the situation confronting the plaintiff in relation to the mortgage and loan to the defendant there were alarm bells as there was nothing in writing from the defendant. He suggested that the plaintiff obtain some commitment from the defendant. He was present when the plaintiff spoke to the defendant and the statutory declaration was faxed to her by the defendant shortly thereafter. He confirmed that throughout 2005 and thereafter on occasions when the plaintiff was unable to meet the payments due and the account was in arrears he made the payments on her behalf. He recalled sending details to the defendant of her 13/15 liability of the loan. He further gave evidence as to how he had downloaded and printed out those text messages that were considered favourable to the plaintiff's case.
Steven Fiddock
Mr Steven Fiddock, a solicitor, gave evidence for the plaintiff and his affidavit sworn 18 January 2010 was received into evidence (exhibit D). He said that he acted for George in the preparation of his will and later was instructed by the plaintiff after George's death in relation to seeking a grant of probate and for advice in relation to the money that was owed by the defendant (exhibit B).
He said that on 9 February 2006 he wrote to the defendant in relation to the repayment of the loan, enclosing a copy of the statutory declaration (exhibit 10) and seeking the defendant's advice as to whether she could pay out the loan or alternatively enter into an acknowledgment of debt to secure the loan by caveat over the defendant's properties (exhibit 23).
On 16 February the defendant telephoned him seeking copies of the bank statements to assist her in identifying the payments that had been made by her. Based on his conversation with the defendant, Mr Fiddock prepared a draft deed of acknowledgment of debt and forwarded it to the defendant (exhibit D).
On 8 March 2006 the defendant telephoned Mr Fiddock and requested that the deed to be amended to reflect that as the debtor she was only obliged to pay principal and interest on the sum of $130,000. She further requested that the plaintiff be required to provide monthly statements.
On 29 March 2006 Mr. Fiddock spoke further with the defendant about the terms of the loan to be included in the acknowledgement of debt. The defendant advised Mr Fiddock that pursuant to the agreement she was only required pay interest on $150,000 for the first 12 months and thereafter she was to pay principal and interest on $130,000 less any lump sum payments that she had made. The defendant accepted that the statements that had been sent to her by Mr Fiddock in the interim with the balance outstanding effective 30 September 2005 was correct insofar as it was then 12 months after the loan had first commenced.
Mr Fiddock says that thereafter the acknowledgment of debt was amended to reflect the alterations requested by the defendant and sent to her for signature and return.
On 30 March 2006 Mr Fiddock wrote to the defendant and sent her copies of the RAMS statements requested by her and further confirmed the terms of the agreement as follows (exhibit D page 17):
Dear Ms Hrga
ESTATE OF THE LATE GEORGE HRGA
Please find enclosed the RAMS bank statement from 1 December 2005 to 14 March 2006 as requested.
I confirm your advice that you agreed with the late Mr Hrga you would pay interest only on $150,000 from the time of the advance up to 30 September 2005. As can be seen from the enclosed statements, the balance owing as at 30 September 2005 was $150,807.51.
From 1 October 2005 you agreed with the late Mr Hrga that you would pay principal and interest at the prevailing interest rate from RAMS on $130,000 reduced by any additional payments, the details of which you will now provide to us.
We understand that you are shortly leaving for Adelaide and then for overseas and we request you provide us with the details of any additional payments you have made so that the Deed of Acknowledgement of Debt can be finalised prior to you leaving.
You have also mentioned that your sister may have a claim over the estate and we also request the details of that claim.
We look forward to receiving the abovementioned information by return mail.
Yours sincerely
Steven Fiddock
FIDDOCK LEGAL.
Mr Fiddock say that the acknowledgement and its terms were prepared on the basis of what the defendant had told him were the terms of the loan agreement made between the defendant and George.
On 26 April 2006, Mr Fiddock telephoned the defendant and sought the return of the signed documents. The defendant said that she had looked at the documents and intended to sign them and drop them into his office later that day before leaving for Croatia. Mr Fiddock was concerned that she was leaving the country. The defendant promised to give the documents to him or send them via her mortgage broker, Loriana Crews.
Mr Fiddock said that the schedule to the acknowledgment of debt (exhibit 27) was produced by software that automatically reproduced payments of principal and interest. He prepared it on the basis that the acknowledgment of debt would be at the same rate as the RAMS loan but noted that if the interest on the loan was to increase there would need to be an adjustment. All of the instructions as to the terms upon which the loan was made as set out in the acknowledgment of debt were provided to Mr Fiddock by the defendant.
He acknowledged that the defendant had enquired as to whether the unit was to be held on trust for Adrian and that he had subsequently raised that issue with the plaintiff (exhibit C). It was his recollection however that such inquiry was unrelated to any discussion concerning the terms of the loan and mentioned in the context of a possible claim against the estate. The defendant had also foreshadowed a possible claim against George's estate by the defendant's sister.
Mr Fiddock's recollection is consistent with his letter to the plaintiff (exhibit C). There is further support for Mr Fiddock's recollection in the defendant's evidence at ts 246:
STOKES, MR Your evidence was that 333 - that your father told the Centrelink tribunal that 333A Albert Street was held by him on trust for Adrian. Isn't that the case---On trust, yes.
All right. So that means that your father wasn't the owner, and that Adrian was the owner, on that evidence---My understanding was that Dad owned it outright and that somehow it was held in trust for Adrian. This was the discussion I had with Steve Fiddock, that how was that possible?
(My emphasis.)
Mr Fiddock rejected the suggestion that the defendant had requested that the deed include a condition relating to the property being transferred to Adrian. He said that if such condition had been suggested to him, he would have included it in the deed.
I pause to observe that in his letter to the defendant on 30 March 2006, wherein the terms of the defendant's advice were confirmed by him, there is no reference of any such condition. If, as the defendant now asserts, such a critical term was the subject of specific discussion with Mr Fiddock and to be included in the acknowledgement, one might reasonably have expected the defendant to note such omission and bring it to Mr Fiddock's attention.
I accept Mr Fiddock's evidence that the defendant's reference to the unit being in trust for Adrian was, at best, peripheral and unrelated in the context of their conversation relating to the terms of the loan. Further, I accept his evidence that the defendant did not request him to include in the deed any condition linking the repayment of the loan to the unit being transferred to Adrian.
The defendant
The defendant was born April 1959. She is tertiary educated and seemingly a sophisticated business woman. In 2004 she worked in the Education Centre in the Faculty of Medicine at the University of Western Australia. Her previous business experience included running a school for children suffering autism with some 26 employees; a commercial real estate venture and developing a fashion label.
The defendant said that she had a close relationship with her father, George and this continued after he had divorced her mother and remarried. She first met the plaintiff in January 1985 when George brought her to her home. The defendant said that she later confronted George about his relationship with the plaintiff and accused him of being a paedophile. They did not speak for many years thereafter. The defendant says that when she heard that her father had cancer, they made contact, reconciled and renewed their relationship. She told George of her significant financial difficulties and he agreed to assist her until she could sell the investment property that she was then renovating. She described it as a 'goodwill' arrangement.
The defendant says George lent her the money on the basis that she was to repay whatever she wanted whenever she could and that if Adrian did not get the unit then she did not have to pay. She says that her father told her he was making arrangements to make certain Adrian would be looked after.
The defendant agrees that the matter was not discussed with the plaintiff. Her understanding was that the liability was over the unit owned by George and always assumed rental income would cover the loan. The defendant says she told her father that she would pay what she could on the basis that it would be left to Adrian because it was his dying wish. The defendant says for the first 12 months she was to pay by direct credit the whole of the interest on the loan for $150,000. So far as the defendant was concerned, the repayment of loan by her was a matter of goodwill and at her unfettered discretion.
She said that she spoke with Mr Fiddock and told him that it was a 'goodwill' arrangement and that her obligation to repay was wholly on the basis that Adrian was inheriting the unit. She says that she did not sign the acknowledgement as that would have resulted in the money going to the plaintiff. So far as the defendant was concerned, she would only pay to discharge the mortgage if the unit was to be transferred to Adrian. At p 224 of the transcript it was her evidence‑in‑chief that:
CURWOOD; MR :In - when you spoke to Mr Fiddock about the deed of acknowledgement of debt, what, if anything, did you tell him - - ----Well, I - - -
- - - of your arrangement with your father---I told him outright it was a goodwill arrangement, that no - no security was required, specifically because it was a goodwill arrangement, and that my intentions of making repayments were wholly based on Adrian inheriting, and that it was my intention to follow through on my promise to my dad to look out for Adrian's interests.
All right. And for what reason did you not sign a deed of acknowledgement of debt---Well, firstly, I didn't believe I had a debt to Esther. I believe that, if anything, the money should be going direct to Adrian, and the only way that would happen is if it is - if it went into the mortgage, that that property should then be signed over to Adrian.
Right---I also thought that a lot of the information that first deed was, in fact, incorrect, including the calculations.
Okay. Well - - ----I did - did actually state that to him.
This evidence is implausible. If, as the defendant contends, there was no obligation to repay the loan such that security was not required, it would seemingly be unnecessary to address the issue of errors in some of the calculations. It is apparent however that the defendant did ask Mr Fiddock about the calculations as Mr Fiddock's letters dated 17 March 2006 and 30 March 2006 that are part of exhibit D confirm.
The defendant denied being present when the plaintiff signed the loan documents. She acknowledged that Lori Crews was her broker but in my opinion sought to minimise that association in relation to Ms Crews acting for her father on the loan. Her evidence on this point (ts 242) was:
STOKES, MR: Lori Crews---Yes.
Was the broker---Yes.
And as your long-term friend, she was negotiating the loan on your behalf, wasn't she---No, she was not.
So you've heard evidence that your father, in fact, used a different finance broker on previous loans, haven't you---Yes, I have.
Yes. And, in fact, you introduced your father to Lori Crews---My father was free to choose anyone. I - once he met Lori, he chose to go with Lori. He said - his exact words were, 'I'm sorry I didn't meet her earlier as I would have loved to do business with her'.
Well, I put it to you that she negotiated the loan on your behalf---No, she did not.
First approached the ANZ in relation to securing the loan---I have no idea what Lori did. I'm - I have no idea. You'll - you'll have to ask Lori that question.
Pausing there, is it your evidence that a loan which was for your benefit was never discussed by Lori Crews with you---In front of my father?
No. That wasn't my question---Only in front of my father. Yes, she discussed it with me in front of my father but not to my benefit. Dad said he would be giving me some of the money. She said, 'Do you - do you require security?' He said, 'No'.
She said that she had no idea what Lori Crews did with her father after the initial meeting.
The defendant says that she attended a Centrelink meeting with her father at which he told the investigating officer that 333B Albert Street was held by him in trust for Adrian. Whilst I accept that such interview took place I place no weight on what George is alleged to have then said in relation to the ownership of any of the units on this occasion. Any statements made by George were made in the context of an investigation by Centrelink as to George's pension entitlement with reference to rent received from the unit. The defendant said that the upshot of the inquiry was that the rental income was attributed to George and his pension reduced accordingly.
The defendant says that some time after George had passed away, the plaintiff rang her. The plaintiff was distressed and said that she needed a statutory declaration or something for the bank. The defendant says it was in this context that the statutory declaration (exhibit 10) was sent a few days later. The defendant conceded in cross‑examination that by April ‑ May 2005, prior to completing the statutory declaration she then knew that Adrian had not inherited the unit. At ts 256 ‑ 257 the defendant gave the following evidence:
STOKES, MR: And did you handwrite this declaration in front of Lori Crews or had you written it before you met her---I - I wrote it in advance and I took it to her office so I could fax it. I - I - I assume I took it to her office to have a signature and so I could fax it to Esther.
Well, you say in that statement, 'I am also responsible for repayment of the $130,000 to the RAMS home loan account 001553080,' don't you---Yes, at that point, yes.
Well, that was a correct statement of the position, wasn't it---I did take responsibility for the loan, yes.
Not take responsibility, you said you are responsible for the loan---Well, I wrote it out without any legal assistance or any - anything because I didn't assume that it was required.
If it wasn't true, why did you sign it---I was more than happy to repay the entire loan if Adrian inherited, and I would have.
Well, by the time of the statutory declaration you knew that he had not inherited, didn't you---I - I still had the discussions with Esther afterwards.
Answer my question, please---I - no. Okay, at the - no.
No. Your earlier evidence was that you knew by April or May of 2005 that Adrian had not inherited under the will---I'm not sure of exact dates. I know he was meant to. I promised my dad that I would make sure he gets the unit - - -
I'm not worried about your promise. I'm going to interrupt you, because I do ask you to answer my question. I asked you earlier, and you gave us an answer that you knew by April of May of 2005 that Adrian had not inherited under the will. That was your evidence earlier---Yes. Yes.
You swore the statutory declaration in July 2005, on 23 July 2005---Yes.
So you knew at the time you swore the statutory declaration that Adrian had not inherited under the will, didn't you---Yes.
All right. And yet you still stated in that statutory declaration that you were responsible for the loan---Yes.
I pause to observe that if the defendant was prepared or 'happy' – as she says – to repay the entire loan provided Adrian inherited the unit it is astonishing that such condition did not find its way into the statutory declaration – particularly when she then knew that Adrian had not inherited the unit that has been mortgaged as security for the loan. The defendant is not unsophisticated or unfamiliar with commercial business transactions.
Notwithstanding the contents of the statutory declaration, the defendant considered that as at May 2005 she was under no obligation to repay the loan and any payments made were voluntary.
The defendant was cross-examined in relation to her contention that the unit was to be transferred to Adrian. It was put to the defendant that if the property was already owned by Adrian, as she contended George had maintained to Centrelink, Adrian could not inherit what he already owned. The defendant's evidence on this issue at ts 246 ‑ 247 is as follows was unconvincing:
STOKES, MR: Well, let's talk about this so-called inheritance of Adrian. Is it your position that your father had already gifted 333A Albert Street to Adrian prior to his death---No.
No. So when you gave evidence last week about what your father said to the Centrelink tribunal, that 333A Albert Street was owned by Adrian - - ----I did not say that. I said I saw a document where it was held in trust. So it was either a trust deed, or something to that effect. It wasn't a gift. It - I can't recall the nature of the document.
Your evidence was that 333 - that your father told the Centrelink tribunal that 333A Albert Street was held by him on trust for Adrian. Isn't that the case---On trust, yes.
All right. So that means that your father wasn't the owner, and that Adrian was the owner, on that evidence---My understanding was that Dad owned it outright and that somehow it was held in trust for Adrian. This was the discussion I had with Steve Fiddock, that how was that possible?
So - well - - ----I had the discussion after Dad died about the trust, not before.
Well, did you know about the trust before your father------Yes, I did.
- - - this so-called trust before your father died, or not---Yes, I did, but I thought he was inheriting. That's what Dad said. Dad said - - -
Well, I put it to you he couldn't inherit the property if it was already his---?---I don't understand how the trust was held. All I saw was a document and Centrelink, at the hearing, stated it was to do with the trust document. So I don't know. I honestly don't know. I can't answer that. There was some kind of document presented, but it was my understanding that the title was in his name and that Adrian would inherit. The title was in Dad's name, but Adrian would inherit after his death. That was my understanding.
The defendant acknowledged that she always aware that the plaintiff was a party to the loan and that if she did not make the repayment, the plaintiff would be liable for the debt. The defendant maintained however that her obligation to repay was discretionary. The defendant said further, that when she had discussed the matter with George she then intended to repay the $130,000 upon the sale of her property in Primrose Street provided Adrian inherited the unit.
I pause to observe that at this time (August 2004) George was alive and on the defendant's evidence, seemingly untroubled in visiting Ms Crews' office independently. The question of the timing of the proposed sale of the defendant's Primrose Street property in relation to George's subsequent death and any inheritance by Adrian could not then have been known.
The defendant acknowledged that her contention that the obligation to repay of the loan was conditional upon Adrian inheriting the unit was first mentioned in writing by her in January 2010 (exhibit E).
In cross-examination the defendant was questioned in relation to her original defence filed in the action on 3 November 2009 (exhibit F1) and the plea that the advance of $130,000 had been 'gifted' to her by George. I consider the defendant's explanation as to her description of the loan in her defence in the terms of being 'gifted', namely that she meant to say that it was given to her willingly and that she should have used the word 'advance', unconvincing. Had the defendant described the transaction in such terms it would not have traversed the matters pleaded in the statement of claim. Further by par 3 of her defence the defendant denied making any loan agreement with the plaintiff or George. In my opinion to plead that the advance was 'gifted' was a conscious decision and in accordance with her instructions as to how she then sought to portray the advance in an effort to frustrate the plaintiff's attempt to secure summary judgment.
Throughout her evidence the defendant was adamant that George had said to her that if Adrian did not get the unit she did not have to repay the loan. She said she repeatedly sent text messages to the plaintiff to that effect. Notwithstanding the existence of other text message sent by the defendant that seemingly evidenced her acceptance of an obligation to repay the loan, the defendant did not produce any text or other contemporaneous written communication that supported her contrary account.
Given that the text messages relied on by the plaintiff have been discovered and were a live issue in the case for some considerable time, it is somewhat surprising that the defendant did not seek obtain copies of text messages or any other information from her telephone service provider until very late in the day. The defendant's explanation in this regard was unconvincing.
The defendant denied telling Mr Fiddock that she would sign the acknowledgement of debt and said that she told him that she did not have to pay if the property did not go to Adrian.
The defendant said that she was aware that the RAMS loan was paid out and replaced with the ANZ bank mortgage in 2008 when the plaintiff texted her details of the loan agreement. The plaintiff says the defendant acknowledged her continuing liability by a text dated 24 October 2008 (exhibit 71) in the following terms:
I need copies of all the statements up to now and a copy of your new loan and interest rate so i can work out my proportion of the repayments. post to PO Box 1284 Subiaco 6904.
It is the defendant evidence that her text (exhibit 71) was sent on the basis that she had been told by the plaintiff that Adrian had been put on the title. Whilst the existence of text messages from the defendant to the plaintiff was confirmed by the plaintiff – including some said to be unfavourable to the plaintiff, I do not accept that the defendant's text (exhibit 71) was sent in response to a text from the plaintiff to the effect that Adrian would get the title from the plaintiff will. Given the extent to which the defendant maintains that the transfer of the unit to Adrian was pivotal to her obligation to repay at all – one would reasonably have expected some reference to that matter in the reply. In my opinion, the defendant's text is responsive to the plaintiff's advice as to the change in banking arrangements and nothing else.
Loriana Crews
Loriana Crews is the mortgage broker who assisted the defendant and George to obtain the RAMS loan the subject to these proceedings. Ms Crews has been the friend of the defendant since 1988 and assisted her with her finances from time to time. This included dealing with the defendant's mail and attending to ensuring loan repayment were made whilst the defendant was living in Croatia for an extended period.
Ms Crews said that George and the defendant had consulted her in August 2004 looking to borrow $150,000. The defendant accompanied George to their first meeting. Initially an application had been made to the ANZ bank but had been unsuccessful because George – a pensioner – had no funds to service the loan. Ms Crews was aware that the majority of the loan funds was to be used to assist the defendant but says that George did not indicate that he wanted any security for the loan being advanced to the defendant.
Significantly Ms Crews considered the amount of income that had been declared by the plaintiff and George would not service the loan (ts 282). I pause to note that it is implicit from such evidence that the loan would necessarily have to be serviced by other funds. The only other funding then available must necessarily come from the defendant. In such circumstances the suggestion by the defendant that her obligation was a matter of 'goodwill' and without obligation falls to be considered. Without a fixed commitment by the defendant to pay the loan would have been immediately in default insofar as the plaintiff and George were unable to service the same. In my opinion, the only reasonable inference is that the loan was premised upon the defendant's agreement to make all of the repayments in respect of the sum loaned to her and not otherwise.
Ms Crews says that she was present when the plaintiff signed the loan agreements and witnessed her signature but was unable to recall whether the defendant was present at that time. In cross‑examination she acknowledged she witnessed the plaintiff's signature on the application form and the loan and that she was not included on the mortgage. Ms Crews was unable to recall the circumstances of witnessing the statutory declaration or any conversation in relation to that and unable to recall whether the defendant was going to repay the loan.
Findings
Witness reliability
In addition to the observations made in the course of reviewing each witness's evidence, I make the following findings in relation to the credibility and reliability of the witnesses who gave evidence in the case.
The plaintiff
The plaintiff is not able to offer any significant direct evidence as to the terms upon which the advance was made – the arrangement with the defendant being made by her late husband, George. It was not until some time after George's death, when the defendant had defaulted in making the repayments, that she became involved in the matter.
I accept that the plaintiff was generally a truthful witness giving an honest account of her recollection of events. I am however concerned by her revelation as to her treatment of the text messages from the defendant. Such conduct illustrates a willingness to put a slant on the evidence most favourable to her case and as such on any critical aspects I would seek confirmation of her evidence from other independent sources.
Mr Fiddock
I have no hesitation in accepting the evidence of Mr Fiddock. Mr Fiddock was an impressive witness. Mr Fiddock presented as a prudent and careful solicitor who had taken great care to document his dealings with the defendant and to take her advice as to the terms of the loan agreement. In my opinion he gave a truthful account of his dealings with the defendant.
Mr Fiddock's description of the events was understandable and consistent with relevant contemporaneous documents. He spoke with the defendant and obtained details of the loan and recorded those details into the acknowledgment of debt. I have no hesitation in accepting that the terms recorded in the acknowledgment of debt were those admitted to him by the defendant. In circumstances where, following the death of George, the only other party to the terms of the loan was the defendant, his notation and recording of the terms of the loan in the acknowledgment of debt was important. I accept that the terms Mr Fiddock recorded are an accurate record of the terms identified by the defendant as being the basis upon which George had agreed to advance the sum of $130,000 to her.
I further find that the defendant did not tell Mr Fiddock or advise him of any condition relating to the unit being transferred to Adrian as a condition precedent to the defendant being liable to repay.
Mr Selridge
Mr Selridge sought to assist the plaintiff and to that extent I exercise caution in accepting his evidence on important points unless supported by other reliable evidence. He readily admitted having downloaded only those text messages from the defendant that were favourable to the plaintiff and deleted those that he considered did not assist the plaintiff.
The defendant
I have referred already to some other unsatisfactory features of the defendant's evidence when reviewing the evidence generally above. I have an unfavourable view of the defendant's evidence and do not regard it as reliable or, in several instances, truthful. I cannot have any confidence in it, except where there is corroboration or where it accords with the probabilities. Her assertion that George did not require her to repay the loan was convenient to her case, but had no basis in the objective evidence and is contrary to the probabilities.
The defendant's evidence was inconsistent with contemporaneous documents written by her – including the statutory declaration, exhibit 12, and the text messages that are exhibits 17, 19, 59 and 71. There was no suggestion in any of her communications prior to the commencement of the proceedings that her obligation to repay the loan was at her election and simply a moral obligation. I consider her initial pleaded response that the funds advanced had been 'gifted' to her by George was an attempt by her to cast the advance in a different light to avoid summary judgment.
It was not until some time after George's death that the defendant first asserted the terms of the loan now pressed by her. In such circumstances, where George is unable able to speak as to the terms, the evidence of the defendant must be such that it can withstand careful scrutiny before it can be accepted. The inconsistencies with the documents including the statutory declaration, the text messages and the admissions made to Mr Fiddock as to the terms to be included in the acknowledgment of debt all point to the defendant's evidence as to the terms of the loan being false and without foundation in fact.
The defendant gave the impression of saying whatever was necessary to support her mantra that repayment of the loan was conditional upon or related to Adrian's ownership of the unit. Given the history and the relationship between the parties, if such was a condition of the loan, one would have expected the defendant to express that to the plaintiff in unequivocal terms at the earliest possible opportunity. The fact that nothing of that nature was expressed for almost four years – until demand for repayment was made strikes at the defendant's credibility on this issue and generally.
I find that there was no such condition imposed and that the terms of the loan were as initially indicated by the defendant to Mr Fiddock.
I do not accept the defendant as a truthful or reliable witness and have preferred the evidence of the plaintiff and Mr Fiddock to that of the defendant's evidence where they differ.
Loriana Crews
Ms Crews sought to assist the court with her evidence was unable to recall with specificity some important aspects of key events. Given the passage of time and her disconnected involvement in the matter she cannot be criticise for any lack of detail however I do not place great weight on her evidence.
Intention to create legal relations
Where there is a question as to the nature of the dealings between parties and whether there was any intention to create legal binding obligations with the loan or whether it is a matter of 'goodwill' it is necessary to have a look at the relationship of the parties at the time.
As noted in Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95 [26], to defer to presumptions in circumstances such as exist in this case is not always helpful. The important issue is whether the plaintiff has satisfied the onus of demonstrating that there was a contract, including that the parties intended to create legal relations. Satisfaction of that onus will depend on the particular circumstances, especially in family circumstances. Further, where the only party now able to give direct evidence of the arrangement asserts the absence of any legal relationship careful scrutiny is required.
The defendant is the only party now able to give evidence as to the making of the agreement and its terms. The plaintiff must rely upon the admissions against interest made by the defendant to Mr Fiddock and the contemporaneous documents for proof of the terms of the loan.
In my opinion, the relationship between the plaintiff and the defendant and the obligations that were being imposed on the plaintiff indicate that it was more than an informal arrangement. The arrangement involved the encumbrance of the only significant family asset to assist the defendant out her distressed financial circumstances arising from her property investments. It was done in the context of the defendant getting her affairs in order and arranging for sale of one of her properties to repay the advance.
A number of factors lead me to conclude that there must have been a loan arrangement in place. They include: first, the improvidence of such an arrangement involving the encumbrance of the only family asset of substance (the family home) without any provision in place for the repayment of the loan; secondly, that the plaintiff would be primarily responsible for the payment of the loan in the event of the defendant's default; thirdly, that neither the plaintiff or George had the personal capacity to service the monthly repayment instalments in respect of the loan – George being in deteriorating health and on an invalid pension, the plaintiff in part-time employment with two dependent children; fourthly, that the defendant immediately commenced repayment of the loan by way of bank debit; fifthly, the defendant's long standing and deep-seated resentment of, particularly, her stepmother plaintiff; sixthly, that the loan repayments were initially by interest only payments for one year and thereafter payments of principal and interest; the defendant's parlous financial state at the time; and, finally, the known consequence that in the event that the defendant refused to pay the instalments and the loan fall into default George and the plaintiff would lose their in which they then lived with their dependant children – one of whom suffered ill health from diabetes.
These factors, both individually and collectively, lead me to conclude that it must have been intended by that there would be an enforceable obligation in relation to the repayment of the loan by the defendant.
Implicit in the defendant's contention that the obligation to repay was a matter of 'goodwill' and the plaintiff's lack of capacity to repay the loan is that George and the plaintiff continued occupation of the family home was at the whim of the defendant. In the absence of convincing proof I am not prepared to accept that George would have agreed to such a proposition. The improvidence of making such an arrangement in circumstances where, should the defendant default in making the payments of the loan, the family home in which the plaintiff, George and their two children then resided, would be sold speaks volumes. This is particularly so in the context where the funds were being advanced by the plaintiff and George to the defendant to enable her to complete the renovation and refurbishment of a property for sale for profit.
In my opinion the only reasonable inference is that there was an intention to create a legally binding arrangement relating to the repayment of the loan.
Terms of loan
I do not accept the defendant's contention that the obligation to repay was conditional upon the property being transferred to Adrian. Such proposition is inconsistent with George's expressed intention in his will whereby the plaintiff received all of his real and personal estate.
If such term was considered at all, one would have expected it to have surfaced in the correspondence, text messages and communications between the parties long before the plaintiff took steps to recover the loan in early 2009. If the defendant truly believed that she was not legally obliged to repay the loan at all; that the repayment was conditional upon the transfer of the unit to Adrian, or that the money had been advanced to her by way of gift – one would have expect such position to be expressed when first in default rather than make repeated promises to repay the sum due.
When the defendant was requested to provide to the plaintiff some assurance as to the obligation in relation to the payment of the loan, the defendant sent the statutory declaration – declaring on oath her obligation to repay the same. If in truth there was no such obligation, George having by then died, and the defendant's financial situation still seemingly in a parlous state, one would have reasonably expected the defendant to disclose the true state of affairs at that time. The plaintiff says that the defendant did – that by the statutory declaration and the terms later identified to Mr Fiddock for inclusion in the acknowledgment of debt, the defendant detailed the agreed terms. It is only after the event that the defendant has sought to resile from that position.
I am satisfied that the funds were advanced to the defendant upon the condition that she would timeously pay all the repayment instalments on the loan to ensure that the loan remained in good standing and not in default.
I find that the advance to the defendant by the plaintiff and George was a loan whereby the defendant agreed to repay the loan by payment of the instalment of interest and later, principal and interest, in accordance with the in the mortgage from time to time and any interest accumulated thereon at the same rate and on the same terms as contained in the RAMS loan.
In the absence of an agreement as to the time at which the repayments would be met a loan is generally repayable on demand: Ogilvie v Adams [1981] VR 1041, ( 1043) (Fullagar J).
In my opinion pursuant to the agreement the defendant's liability to repay the loan was to be deferred pending her payments of such amount as may from time to time be due and owing to RAMS. In default of making such payments the plaintiff is entitled to recover the whole of the loan immediately.
I find that the defendant has failed to pay the loan since 21 January 2009 and that the plaintiff is entitled to judgment in the sum of $130,000 together with the accumulated interest thereon.
The plaintiff's solicitors have provided to me a schedule showing the interest instalment that have accumulated on the defendant's proportion of the loan up to 10 December 2010 is in the sum of $15,838.94.
Accordingly, I find that the plaintiff is entitled to judgment in the sum of $145,838.94.
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