Kizmann v De Maine (No 2) - [2024] ACTSC 139

SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Case Title:	Kizmann v De Maine (No 2)
Citation:	[2024] ACTSC 139
Hearing Date:	10 July 2023
Decision Date:	9 May 2024
Before:	McCallum CJ
Decision:	(1) That judgment be entered for the plaintiff against the first defendant in the sum of $858,767.46 plus interest in an amount to be determined. (2) Direct the parties to provide to my Associate a short statement as to their agreed or competing positions concerning interest within 14 days. (3) That the first defendant pay the plaintiff’s costs.
Catchwords:	CIVIL LAW – LOAN AGREEMENT DISPUTE – where plaintiff made five loans to a friend – identity of the borrower – whether the loans were requested by the friend in his personal capacity or on behalf of his company – where plaintiff signed a written agreement with the company for one of the loans – whether the signed agreement was a sham prepared for the purpose of securing the release of the funds from a foreign bank after the legitimacy of a transfer of foreign currency was questioned
Cases Cited:	Codelfa Constructions Pty Ltd v State Rail Authority of NSW [1982] HCA 24; 149 CLR 337 Fox v Percy [2003] HCA 22; 214 CLR 118 Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd (1988) 5 BPR 11 Realestate.com.au Pty Ltd v Hardingham; RP Data Pty Ltd v Hardingham [2022] HCA 39 Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; 219 CLR 165 Watson v Foxman (1995) 49 NSWLR 315
Parties:	Ivan Gerard Kizmann ( Plaintiff) Gregory John De Maine ( First Defendant) Shostko Systems Pty Ltd (deregistered) (Second Defendant)
Texts Cited:	J D Heydon, Heydon on Contract (Thomson Reuters, Lawbook Co, 2019)
Representation:	Counsel B Connell ( Plaintiff) W Sharwood ( First Defendant) None (ex parte) (Second Defendant)
Solicitors Legal on London ( Plaintiff) Gabbedy Milson Lee ( First Defendant)
File Number:	SC 586 of 2019

McCALLUM CJ:

1․Ivan Kizmann and Gregory De Maine shared a background in the armed services and were good friends for over 20 years. Their relationship now is one of bitter hostility as a result of the events giving rise to these proceedings. Mr Kizmann made a series of loans which he contends were made to Mr De Maine personally. Mr De Maine does not dispute that the loans were made at his request, or that the funds advanced were used to support business enterprises in which he was engaged. At the time of each request, he assured Mr Kizmann that he would repay what had been borrowed (and more) within certain times or as soon as various events occurred. However, as time went on, he became more evasive, saying he was too much in debt to make any repayments. He blamed unforeseen difficulties for his straitened circumstances and even accused Mr Kizmann of being greedy for seeking repayment. Mr De Maine now contends that the funds were advanced not to him but…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2024] ACTSC 139
Decision Date: 9 May 2024

CaseChat Overview and Summary

In the case of Kizmann v De Maine, the plaintiff, Mr. Kizmann, sought to recover money owed by the first defendant, Mr. De Maine, for five loans that were made to Mr. De Maine. The central dispute in the case was whether these loans were made to Mr. De Maine in his personal capacity or on behalf of his company. The case was heard in the Supreme Court of New South Wales. The court was required to determine whether Mr. De Maine had made a valid agreement with the plaintiff to repay the loans and if the written agreement that Mr. De Maine signed with the plaintiff's company was a genuine agreement or a sham.

The court examined the nature of the relationship between the parties and whether the loans were made for personal reasons or for business purposes. The court also considered the circumstances under which the written agreement was signed and whether it was intended to secure the release of funds from a foreign bank. Ultimately, the court found that the written agreement was a sham, and the loans were made to Mr. De Maine in his personal capacity. The court ordered that judgment be entered in favour of the plaintiff for the sum of $858,767.46, plus interest, and that the first defendant pay the plaintiff's costs. The court also directed the parties to provide a statement as to their agreed or competing positions concerning interest within 14 days.

Orders

Orders of the court

(1) That judgment be entered for the plaintiff against the first defendant in the sum of $858,767.46 plus interest in an amount to be determined.

(2) Direct the parties to provide to my Associate a short statement as to their agreed or competing positions concerning interest within 14 days.

(3) That the first defendant pay the plaintiff’s costs.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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