Jones v Apps
[2009] VSC 196
•26 May 2009
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
No. 9277 of 2005
| JOSEPH ANTHONY JONES | Plaintiff |
| v | |
| TIMOTHY JOHN APPS | Defendant |
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JUDGE: | HANSEN J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 4 May 2009 | |
DATE OF JUDGMENT: | 26 May 2009 | |
CASE MAY BE CITED AS: | Jones v Apps | |
MEDIUM NEUTRAL CITATION: | [2009] VSC 196 | |
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CONTRACT – Loan agreements – Whether defendant contracted as agent.
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APPEARANCES: |
| The Plaintiff in person |
| The Defendant in person |
HIS HONOUR:
The plaintiff, Joseph Anthony Jones, sues the defendant, Timothy John Apps, for the amount of principal and interest owing under two loan agreements. While each party appeared before me unrepresented they had previously engaged lawyers who had prepared and filed a statement of claim and an amended defence respectively.
The statement of claim alleged as follows, in summary:
(a)On or about 11 April 2003 the parties entered into a written loan agreement whereby the plaintiff agreed to lend the defendant, and did duly advance, $110,000 (“the first agreement”) on terms including –
(i)interest payable at 20% and default interest payable at 20%;
(ii)10% interest was payable in advance on drawdown with the balance capitalised to the end of the project;
(iii)the loan and any accrued interest was repayable on 11 April 2004 or such other date as agreed.
(b)The defendant paid interest of $11,000 on 2 May 2004 but otherwise failed to repay the loan and interest thereon.
(c)On or about 8 September 2003 the parties entered into a written loan agreement whereby the plaintiff agreed to lend the defendant, and on or about that day advanced, $150,000 (“the second agreement”) on terms including –
(i)interest payable at 20% and default interest at 25%;
(ii)the drawdown date was 8 September 2003;
(iii)the loan was repayable on 8 September 2004 or such other date as agreed.
(d)Finally, it is alleged that the defendant made a further total payment of $23,500 of additional interest with respect to the first and second agreements.
The amended defence alleged that the first and second agreements were signed by the defendant as agent for Tumut Development Co Pty Ltd, and otherwise denied the allegations in the statement of claim. In fact, however, the first and second agreements did contain the terms set out at [2] above.
On the pleadings and as put to me by the defendant, the defendant’s liability turns on whether he entered into the agreements as agent and without incurring personal liability. If, however, he incurred personal liability there is an issue as to the total amount that was paid to the plaintiff and should thus be allowed in the defendant’s favour.
For the reasons set out below, I have concluded that the defendant did enter into the agreement in the capacity of an agent and that the claim must fail.
The evidence
The plaintiff and the defendant each gave evidence. They were the only witnesses. The defendant cross-examined the plaintiff. The defendant asked only a few questions in cross‑examination. The first and second agreements and some other documents were tendered.
The facts
The plaintiff attended an investment seminar where he met the defendant. There was a difference as to who approached who, but the fact is that they spoke, and that the possibility of an investment by the plaintiff was mentioned. There was an issue as to who said what, the plaintiff saying that the defendant said he knew a company he could vouch for, they built in New South Wales and Queensland, and that the plaintiff could meet them. According to the plaintiff, the defendant said he could get the plaintiff a good return. On the other hand, the defendant said that the plaintiff asked if he had any mezzanine deals he could invest in, as to which the defendant said he would see. A mezzanine deal meant one secured on second or third mortgage. The differences on these issues do not matter.
Following the seminar the defendant contacted property developers Norman Boyle and Richard Woods and enquired if they had anything that might be of interest to the plaintiff. They said they did and suggested they meet the plaintiff. The defendant arranged for the plaintiff to meet with Boyle, Woods and himself at Sydney Airport on 11 April 2003. The meeting took place.
There were some differences in the accounts of the plaintiff and the defendant as to what transpired at the meeting. The plaintiff’s account was that the defendant introduced him to Boyle and Woods, saying that he knew them and that they did a lot of “this work”. One was supposed to be a developer and the other a builder – the plaintiff understood Boyle was the developer and Woods the builder - and they were doing units in Cairns and Tumut and some other places, and they brought in plans, “and on the surface it looked like you know it was okay”. The plaintiff said that he took the defendant’s word that he knew Boyle and Woods and as to what they were doing because he (the defendant) claimed that he was “their agent”. The defendant said “I am their agent”.
The plaintiff said that “they” (meaning Boyle and Woods) did most of the talking and showed him plans, drawings and photographs. The plaintiff said that he listened “to try to find out”. They provided a brochure of what they were planning to build in Cairns and Tumut. The plaintiff said that it looked okay and that they discussed and agreed on the loan. He said that he would loan $110,000 but that he needed $11,000 to pay interest due on the $110,000, which he had raised by mortgage. He provided a cheque payable to the defendant for $110,000. In return he received a cheque from the defendant for $11,000; the cheque was drawn on the account of the defendant’s company, Juke Box Jives Australasia Pty Ltd.
At that point there was no document that recorded the loan or the terms thereof. The plaintiff said that he took a risk in paying his money without a written loan agreement. A written loan agreement was produced and signed, but subsequently as to which I refer below.
The defendant’s account of the meeting was, in summary, as follows. He introduced the parties, described Boyle and Woods as the property developers he had discussed, said that they were looking for mezzanine funding and that the plaintiff had indicated he had some funds to invest. The plaintiff said he only had $110,000 at the moment and would need interest to be paid in advance. Boyle said that was fine, they needed the money to pay a deposit on a project at Cairns. Boyle said the money was needed for 10 to 12 months and they could give a second mortgage although not until they secured the first mortgage over the development. They could also give security over a property at Lot 6, Booral Avenue, Tumut. Boyle then outlined the project and, after about an hour, handed the plaintiff a folder outlining finishes in, and the quality of, the houses. The plaintiff asked who he should write his cheque out to and Boyle said he could write it out to them or to the defendant, it was all the same because the defendant was “our agent and he knows what deals we are doing. That way we’ll be able to keep track of his investors that have – that he has brought in with the money”. The plaintiff said that he would write the cheque out to the defendant if that was okay, to which Woods said that was “fine by us”, that the defendant “can give you your 10% deposit – 10% per annum interest up front and we will get the balance from [the defendant] and we will deal with [the defendant] over that. He can bank the cheque and he can give you a cheque that will cover your interest for the first 12 months and we’ll give you the balance of your interest at the end … when we give you back your money”. They plaintiff said okay, that he would write out a cheque to the defendant and asked who to write it out to. The defendant advised that the cheque should be made payable to himself. The plaintiff provided his cheque and the defendant wrote out a cheque for the plaintiff, as mentioned above.
The defendant said that at the same time he prepared a one page document which “outlined the terms of the deal”, discussed it with those present and printed it on the computer. He handed it to Boyle and Woods who read it and agreed with it. The plaintiff also said it looked like what they had discussed. The defendant then signed the document. The document includes the following statement:
“4.The project is a joint venture with Timothy John Apps (or nominee) and I will be involved with Project and Asset Management Pty Ltd … of 108 Wynward Street, Tumut NSW 2720 who will complete the project within 12 months from this date.”
As to the statement in the document that he would be “involved with Project and Asset Management”, the defendant said that that was what Boyle and Woods told him to say, he “was virtually doing what I was dictated to”.
I note further as to this document, that in cross-examination the plaintiff said he had not seen it before. In my view, the likelihood is that at the meeting he either saw it or heard it read out.
The defendant said in evidence that following agreement as to this document there was further discussion between the plaintiff, Boyle and Woods in which the plaintiff said that he had a further $150,000 equity in his home and his mother-in-law had an unencumbered home which she could use to give her some cash flow. Woods said that they could use that too, and that if the plaintiff wanted they would help him get the equity out of each home and they could deal with him for those amounts of money. He was sure they could use those funds in the project. They would give the plaintiff a second mortgage over the project when the money was ready. He could have security over the Cairns One project and the project at Lot 6, Booral Avenue, Tumut. The plaintiff said that would be okay, he would let the defendant know what was happening. The plaintiff then left the meeting.
Following the meeting, the cheques were banked and cleared and the defendant gave Boyle and Woods a cheque for $105,000 made payable to Project and Asset Management Pty Ltd.
Subsequently, on 18 May 2003 the defendant received an email from Woods concerning urgent settlement of Lot 6, Booral Avenue, Tumut. Woods followed this up by telephone on 22 May 2003 when he told the defendant he needed $200,000 to settle on Lot 6, Booral Avenue, Tumut until they could get the first and second mortgage in place. The defendant said he would see if he could borrow that amount. A short time later the defendant rang back and said he only had $28,000 and would that do? Woods said it would not, and asked about the plaintiff who had $150,000. Woods said that the plaintiff had rung him a short time ago and that he had it ready to spend. Woods said that he would ring the plaintiff and get him to meet the defendant, the defendant could do the paperwork and the plaintiff can transfer the funds. The defendant referred to another person who had about $22,000 to lend. Woods said that they needed $200,000 to settle the next day or they would lose the block. The defendant said he would ring the plaintiff. Woods said that the plaintiff wanted to invest, he would get him to put it straight into the defendant’s Juke Box Jives account, and the defendant could get in the other $50,000. The defendant agreed.
The plaintiff having then been contacted, on 23 May 2003 he met the defendant at a bank in Melbourne and transferred $150,000 from his account to the defendant’s Juke Box Jives account as a further investment in the project. This is the second loan. The defendant then transferred $200,000 from the Juke Box Jives account to Project and Asset Management Pty Ltd for the project, and advised Woods accordingly. The plaintiff and the defendant then parted.
The next event in the chronology was the preparation of the first and second agreements. That occurred at the plaintiff’s insistence to the defendant that the loans be recorded “in case a situation arise”.
The defendant prepared the first and second agreements in or about August 2003 and, following discussions, they were signed by the plaintiff and the defendant in September 2003, it would seem on the 8th. While the first agreement is dated the date of the advance on 11 April 2003, the second agreement is dated 8 September 2003, months after the advance on 23 May 2003. The 8 September date was requested by Boyle and Woods on the basis of paying the plaintiff $5,000 to leave his and his mother-in-law’s money in until 8 September 2004, and that payment of $5,000 was made on 8 September 2003.
As tendered in evidence, the first and second agreements each had attached to them a three page document signed by the parties, evidently at the same time as the agreements were signed, which in a summary way stated and explained the transaction. I refer to each as the summary statement. By reason of their contents and that they were executed contemporaneously with the first and second agreements, the summary statements may be read with the loan agreement to which they relate.
The first thing to note about the first and second agreements is that they did contain the terms respectively referred to at [2](a) and (c) above.
The second thing to note is that each of the first and second agreements commences with the date of the agreement followed by the parties who are described as follows:
“Joseph A Jones of … (the ‘lender’);
Timothy John Apps of … FOR AND ON behalf of Tumut Development Company Pty Ltd ACN No. 104 495 383 of 108 Wynward Street, Tumut, New South Wales 2720 (the ‘borrower’).”
In each summary statement, under the heading “Parties of the group”, the names of the plaintiff and the defendant are set out, the defendant’s name being followed by the words “for and on behalf of Tumut Development Co Pty Limited”. Then, under the heading “Structure of the group” the defendant is referred to as borrower and the plaintiff as the provider of the amount lent.
At this point I should make further reference to the provisions of the first and second agreements. I do not, however, repeat the terms set out at [2](a) and (c) above.
Each agreement commenced with recitals in the same terms except as to the amount of the loan. It was recited that the lender had agreed at the request of the borrower to provide a loan facility to the borrower (of the agreed amount) and that the lender and borrower had agreed to enter into the agreement to set out the terms of the loan facility.
Thereafter were set out the terms of the agreement which overall runs to 15 pages. With little exception the agreements were in identical terms. Each agreement includes the following. Clause 1.1.15 defined “Security” to mean “jointly with others (to be advised) second registered mortgage over Lot 6 D.P. 2347171 at Booral Ave, Tumut, New South Wales any mortgage, pledge, lien, hypothecation, security interest or other encumbrance or charge now or in the future given by the borrower or any guarantor in favour of the lender to secure the obligations of the borrower under this agreement and includes any guarantee executed by any guarantor”.
Clause 2 provided for payment of interest, clause 3 made provision for the borrower to pay certain costs and expenses of the lender, clause 4 provided for the borrower to repay the loan and interest, and clause 5 concerned the method of payment. In clause 6 the borrower represented and warranted that it is not the trustee of a trust and that it entered into the agreement “on its own behalf and not as trustee of any trust”. Clause 7 set out a series of undertakings and agreements by the borrower as follows, in summary:
(a)7.2.1 – “negative pledge:” not without consent create or allow to exist any encumbrance (other than under the security) “to secure any indebtedness upon any of the present or future property, undertaking, assets or revenues of the borrower;”.
(b)7.2.2 – “purpose of loan: to apply the proceeds of the advance wholly for the purpose of settlement and costs as outlined in debt equity proposal and loan agreement (supplied) on Lot 6 D.P. 2347171 at Booral Ave, Tumut, New South Wales;”.
(c)7.2.3 – “further assurances:” to execute further assurances as reasonably required by the lender to give effect to the covenants in the agreement and the security in favour of the lender or to protect the lender’s rights under the agreement or the security.
(d)7.2.4 – “compliance with requirements:” to comply with requirements of the law.
(e)7.2.5 – “Event of default: to notify the lender forthwith of the occurrence of any event of default … which either would, or might, in the lender’s opinion, adversely effect the ability of the borrower fully and promptly to perform its obligations under this agreement or the security;”.
(f)7.2.6 – “Insurance:” to keep its assets and undertaking insured.
Clause 8 then provided for default by the borrower and termination by the lender, clause 9 for the order of application of money received by the lender, clause 10 provided certain protections for the lender, and clause 11 appointed the lender as attorney for the borrower in certain circumstances. It is not necessary to refer to the remaining provisions (clauses 12 and 13). Each agreement was then “EXECUTED AS AN AGREEMENT” by the parties signing.
I now refer again to the summary statements relating to the agreements. In that pertaining to the first agreement, under the heading “Structure of the group” it is stated that the plaintiff is the provider of:
“$110,000 in conjunction with others to allow Tumut Land Company for settlement and costs as outlined in debt equity proposal and loan agreement (supplied) on Lot 6 D.P. 2347171 at Booral Ave, Tumut, New South Wales in relation to same.
This sum is to be returned to Joseph Anthony JONES within twelve (12) calendar months from date of release of the funds.”
Then, under the heading “Goals” was an explanation of how interest would be calculated and paid. That was followed by “Investment Criteria” where it was stated that the plaintiff would receive $11,000 at settlement (and which was paid), and that the plaintiff “is allowed to put a registered caveat on the property above for security of the loan”. Then, under “Time Plan” was the statement that the plaintiff “is to produce the $110,000 by Friday 11th April, 2003”. And, under “Individual Responsibilities” it was stated that the plaintiff and defendant are “to stick to time plan as this is extremely crucial for this venture”, and that the defendant “is to pay all reasonable expenses for Joseph Anthony JONES to have this agreement finalised”. Then, under “Risk Management Strategy” it was stated that the plaintiff “is allowed to put a caveat on the property mentioned above in conjunction with others (Names TBA)”, and that the plaintiff “is not to withdraw the above sums before … twelve calendar months from advance of money”. Then, under “Legal Costs” it was stated that the defendant “would be responsible for all reasonable legal costs, expenses and disbursements related to this agreement”. Finally, under “Agreement” it was stated that the parties entered into “this agreement for themselves and their respective successors, assigns, heirs and legal personal representatives”. That was followed by the parties’ signature to “this Agreement”.
Apart from differences as to amounts, interest and relevant dates, the summary statement relating to the second loan was in all material respects the same as the first.
I now return to the chronology of events.
Leaving aside for the moment the matter of what amounts were paid for interest, the next event was that in March or April 2004 the defendant passed on to the plaintiff a request from Project and Asset Management Pty Ltd that repayment of the loans be extended for up to 12 months. The defendant said that he received, and he produced in evidence, an unsigned letter addressed to him from Tumut Development Co Pty Ltd dated 1 April 2004 requesting an extension of the plaintiff’s loan for up to 12 months “to complete and settle the subdivision”, in consideration of which “the company will provide a further upfront interest payment of $11,000 (equating to 10% pa) payable by 30 April 2004, based on the original terms of loan agreement”. The plaintiff agreed to the extension verbally and by an email sent to the defendant on 4 April 2004. In the email the plaintiff stated that he had read the email the defendant had received from Tumut Development Co Pty Ltd and set out the terms the plaintiff accepted, one of which was that:
“4Suitable security is given by 11/4/2004 to cover this and the other monies owed by Norm and Richard T/A Tumut Development Company. This was to be organised nearly twelve months ago and as yet has not been done to my knowledge.”
The defendant received the sum of $11,000 on or about 2 May 2004.
Ultimately the project collapsed and the loans were not repaid. I refer below to the amounts that were paid in respect of interest. For the moment I note the defendant’s evidence that Boyle and Woods’ projects were repossessed by the bank. The defendant said that he lost all his money.
I now refer to the amounts received by the plaintiff. As mentioned earlier, in the statement of claim the plaintiff acknowledged having received $11,000 (although that occurred on 11 April 2003 and not 2 May 2004 as alleged in the statement of claim) and a further total payment of $23,500 as additional interest “with respect to both” agreements. In further and better particulars of the amount of $23,500 filed on 27 June 2006, it was stated that the plaintiff received five payments of interest from the defendant which totalled $15,500. In evidence the plaintiff was unable to explain how the amount of $23,500 was calculated. In his evidence he produced a list of payments (Exhibit B) which had been prepared by the defendant and which totalled $55,000, and on which the plaintiff had written comments to indicate whether he had a record of receiving the payments set out. Against some amounts he had written “no record” which meant that he had not received the amount, and against one payment of $3,000 he had recorded that it was for his mother-in-law. As I understand the notations, the plaintiff acknowledged receiving $25,500 in addition to the initial $11,000. There was a disharmony between this evidence and the payments acknowledged in the further and better particulars, as three of those payments (totalling $9,000) were listed in the defendant’s list (Exhibit B) but noted by the plaintiff as “no record” or as having been paid to his mother-in-law.
In his evidence the defendant stated that he prepared the list of payments (Exhibit B) from his records. He said that “Project and Asset Management/Tumut Development/Woods/Boyle, whoever you want to call it, were at times slow paying but they always did pay and I had, in most cases, borrowed those funds to pay [the plaintiff] on behalf of Tumut, their entities, Tumut Development Companies/Project and Asset Management”, and he was out of pocket $55,000. It is to be noted that the plaintiff did not cross-examine the defendant as to the amounts in Exhibit B.
In all the circumstances, I accept the defendant’s evidence that he paid the amounts shown on his list and totalling $55,000. I also accept that one payment of $3,000 was attributable to a loan of the plaintiff’s mother-in-law and is thus to be allowed off the list, leaving a balance of $52,000 as the total of all the amounts of interest paid by the defendant to the plaintiff in respect of the first and second agreements. The plaintiff received no other amounts in payment of principal or interest from the defendant or any other party.
Finally, I note some further evidence of the defendant which he gave in answer to some questions I asked. This was on the question whether he drew to the plaintiff’s attention that he was acting for and on behalf of Tumut Development Co Pty Ltd. He said that he did, stating that:
“… I told him I was acting [as] agent for – for them and it was Project and Asset Management or Cairns Development One or Project – Tumut Development Company.
When did you say that to him? ——— We had numerous phone calls, numerous conversations over many, many months.
But what I’m concerned about is the time prior to or at the time of actually agreeing to provide money? ——— The – no, at the time of borrowing the money Boyle and Woods acknowledged that I was an agent, Mr Jones acknowledged that I was acting as an intermediary between them and that’s about how it all panned out.”
I accept this evidence. Indeed, I should add, I accept all of the defendant’s evidence, and that of the plaintiff also, on this issue of the capacity in which the defendant acted.
It remains to mention that following the hearing the defendant emailed to my associate some information concerning his financial position. In fact the defendant had referred to his financial position in the course of his evidence. That was not, of course, the issue for determination. Nevertheless he emailed the further information which comprised a letter from his accountant dated 30 April 2009 which among other things stated that Juke Box Jives Pty Ltd was deregistered on 5 April 2008, and an Australian Securities and Investments Commission historical search of that company and other companies which had been operated by the defendant. These materials were forwarded to the plaintiff with an invitation to respond if he wished. He did not respond. There was no need to. The information does not affect my conclusion.
Decision
As mentioned earlier, the primary issue for determination is whether the defendant is personally liable under the first and second agreements.
In the statement of claim the first and second agreements are pleaded but with the omission of any reference to the defendant having entered into them “for and on behalf of Tumut Development Company Pty Ltd”, or as agent for any other person or company. There was no reference to an agency capacity. The plain meaning of the pleading is that the defendant entered into the agreements as principal in his own right.
The defendant’s response to this, in the amended defence, was to deny the alleged agreement and to assert positively that the agreements were signed by him “as agent for Tumut Development Co Pty Ltd”. It was not pleaded that by reason thereof the defendant was not personally liable under the agreements, but that was the plain intendment of the plea.
The plaintiff did not file a reply to the amended defence. Hence, the parties joined issue on the matter of the defendant’s contractual liability under the first and second agreements. But the fact is that each loan was made well prior to the preparation and signing of those agreements and in a factual context in respect of which, in the absence of the written agreements, the same contractual issue could or would arise. The plaintiff has not sought, by his statement of claim or before me, as I understood it, to put his case on an alternative basis that the facts and circumstances of the lending on 11 April 2003 and 23 May 2003 were such as to render the defendant personally liable.
I turn then to the determination of the question whether the defendant undertook personal liability under the first and second agreements. That is, did he contract with the plaintiff as principal or as an agent without incurring liability in his own behalf. This question, as Williams J observed in J S Robertson (Aust) Pty Ltd v Martin[1] “must be answered by an examination of what occurred” between the parties. See also Calder v Dobell[2]. What occurred were the various facts and events to which I have made reference above and which it is not necessary to repeat.
[1](1956) 94 CLR 30 at 55.
[2](1871) LR 6 CP 486.
It is plain, and I have accepted all the evidence on this point, that from the outset on 11 April 2003 the defendant’s role was identified, and accepted by the plaintiff as being, that of an agent for Boyle and Woods or their relevant entity. In my view the reference to a joint venture with the defendant in the document signed by the defendant at the meeting on 11 April 2003 is to be, and was, understood by the plaintiff in that context. To that may be added the further evidence of the defendant referred to at [37] above, which I find reflected in discussions with the plaintiff prior to the making of the second loan and, following that, up to the signing of the first and second agreements. The first and second agreements themselves were brought into existence at the request of the plaintiff for the purpose of having a written record of the transactions of loan previously entered into and for the purpose of setting out the terms which the plaintiff and the defendant subsequently agreed as stated in the agreements. That included precise identification of the relevant entity, Tumut Development Company Pty Ltd. It accords with the basis on which those transactions occurred, that the first and second agreements described the defendant as borrower for and on behalf of Tumut Development Company Pty Ltd, that company clearly being accepted as the relevant entity of Boyle and Woods for this purpose.
In J S Robertson (Aust) Pty Ltd Williams J said that[3]:
“The proper way for a person who signs a contract for a principal and who wishes to exclude any personal liability is to sign as agent: Universal Steam Navigation Co. Ltd. v. James McKelvie & Co. [1923] AC 492. But a person who is really an agent may still save his personal liability although he signs the contract without qualification if it is clear from the body of the contract that he contracted only as agent, per Archibald J. in Gadd v. Houghton (1876) LR 1 Ex D 357. ‘Prima facie a party is personally liable on a contract if he puts his unqualified signature to it. In order, therefore, to exonerate the agent from liability the contract must show, when construed as a whole, that he contracted as agent only and did not undertake any personal liability’: Halsbury's Laws of England (3rd ed.), vol. I, p. 228 ; Bowstead on Agency (11th ed.) (1951), p. 246.”
[3](1956) 94 CLR 30 at 56.
Universal Steam Navigation Company Limited v James McKelvie & Company[4] concerned a charterparty expressed to be made between “T H Seed & Co Ltd, agents for the owners” of a steamship and “James McKelvie & Co., Newcastle–on-Tyne, Charterers” and was signed “For and on behalf of James McKelvie & Co (as agents)”. The question was whether the defendants were liable under the charterparty to pay demurrage. The House of Lords held that they were not liable. Although the defendants were described as charterers in the charterparty they had signed as agents and were thus not personally liable. The words “as agents” were a sufficient qualification for this purpose. They clearly showed that the charterparty was signed for a principal and that it was not intended that the defendants incur personal liability.
[4][1923] AC 492.
In my view the expression “for and on behalf of” in the present case is to be understood as stating that the defendant entered into the first and second agreements as agent for Tumut Development Company Pty Ltd, and that the defendant signed the agreement in that capacity. I agree with the observations of Neville J, stated in dissent in H O Brandt & Co v H N Morris& Co[5] that the phrases “as agents for”, “on account of” and “on behalf of” bear precisely the same meaning. I do not overlook that the agreements set out an extensive range of terms and that throughout they used the expression borrower. But the terms themselves, read with an understanding of the surrounding circumstances, reflect the undertaking of commitments, including the giving of security over property owned by another (as it is apparent in the circumstances) that indicate that the real party or principal was another person or entity. Hence, in my view the first and second agreements do not indicate a contrary intention to that which is indicated by the stated capacity of agency in which the defendant entered into them. In my view the correct position is that the defendant did not incur personal liability under the first or second agreements.
[5][1917] 2 KB 784 at 801.
I should add that the conclusion would be the same absent the first and second agreements. That is, the facts established that the advances made on 11 April 2003 and 23 May 2003 were made to the defendant as agent for another without him undertaking personal liability for the loan and the attendant obligations such as the provision of security over property the subject of the proposed development.
For these reasons the claim must fail and the proceeding will be dismissed.
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