Michael v Ogun

[2009] NSWDC 52

CITATION:	Michael v Ogun [2009] NSWDC 52
HEARING DATE(S):	16, 17, 18 and 19 February 2009
JUDGMENT DATE:	31 March 2009
JURISDICTION:	Civil
JUDGMENT OF:	Hungerford ADCJ
DECISION:	1. Verdict for the plaintiffs against the defendant on the claim in the amount of $63,838.34. 2. Verdict for the cross-claimant/defendant against the cross-defendants/plaintiffs on the cross-claim in the amount of $24,040. 3. Parties to be heard on interest and costs before final orders are made. 4. Parties to be heard as to whether judgment should be entered separately on each verdict or for the balance of $39,798.34 in favour of the plaintiffs by way of set-off.
CATCHWORDS:	CONTRACTS-Ongoing trading relationship between the parties-Trade in artworks and artefacts-Barter system-Membership of Bartercard organisation-Sale of goods but subject to payment or return of goods in a reasonable time-Loans-Formation of a partnership to develop a tourist resort-One party acting as a travel agent for the overseas holiday of the other party-Payment for the holiday in Barter dollars or credit points-Alleged unauthorised use of one party's credit card by the other-Respective amounts owing by one party to the other-Balance due from overall trading relationship between the parties
LEGISLATION CITED:	Civil Procedure Act 2005, s90(2) Uniform Civil Procedure Rules 2005, Pt14 r14.26
PARTIES:	Christopher Douglas Michael (First Plaintiff/First Cross-Defendant) Kathleen Michael (Second Plaintiff/Second Cross-Defendant) Sinan Ogun (Defendant/Cross-Claimant)
FILE NUMBER(S):	No 940 of 2006
COUNSEL:	Mr H Altan - Plaintiffs/Cross-Defendants Mr T Rickard - Defendant/Cross-Claimant
SOLICITORS:	Ziman & Ziman - Plaintiffs/Cross-Defendants Prichard Lawyers - Defendant/Cross-Claimant

JUDGMENT

1 A business relationship between the parties commenced in mid-2000 whereby they traded in artworks and artefacts and, although no money was actually paid at the time, each of the items so traded had a value which was to be paid within a reasonable time or, alternatively, the item was to be returned. In this sense, the items concerned were provided by way of consignment from one party to the other and some of the dealings were conducted through, or perhaps better described as being facilitated by, the Bartercard organisation of which both parties were members. In addition, loans were allegedly made by one party to the other in relation to a joint venture in which they conducted through a corporation a tourist resort development in Queensland. Further, one of the parties acted as a travel agent for the other in arranging transport and accommodation for a private family holiday to the United States of America but where payment for much of which was tied in with the Bartercard dealings on the artworks and artefacts.

2 The dealings so identified over a period of a few years were many and various but where the record-keeping by the parties, perhaps because they considered themselves partners and in a relationship of trust, was simply lacking and wholly inadequate to enable an independent assessment of the parties’ dealings and of the balance of any monies due by one to the other. Therefore, the proceedings focused largely upon oral assertions and counter-assertions, although to the extent some documentary material existed it was subject to disagreement as to what it meant and sometimes was inconsistent with the oral assertions. Even so, some admissions were made by the parties to a not insignificant degree in a commercial dispute which may fairly be characterised as a curious complex of dealings. For instance, one party was a signatory to the other party’s bank account, apparently as security for a loan, and operated on the account without the knowledge of the other party.

3 In the result, a claim and a counter-claim for breach of contract, in detinue and in debt were filed in which, after adjustment for credits allowed, respective verdicts were sought in the net amounts of $81,921.45 on the claim and $45,434 on the cross-claim. However, some items in this mix were common to both the claim and the cross-claim so that it is convenient to consider them collectively although each head of claim necessarily will have to be assessed separately as to the particular transaction involved.

Factual context

4 The two plaintiffs/cross-defendants, Christopher Douglas Michael and Kathleen Michael, were husband and wife who carried on business as dealers in artworks and artefacts both in Australia and internationally and had done so for approximately 23 years. For an even longer period they were general traders in various goods and commodities. The specialty artworks and artefacts included original oil paintings, prints, lithographs, geology specimens and the like. Mr Michael, who said he had “hundreds of thousands” of such items, was responsible for the operational side of the business and Mrs Michael attended to matters of an administrative nature, including the accounting. In practice, Mr Michael conceded his recording of the stock was very informal, as he left it to his wife to keep the annual stocktake records, although none were produced in evidence, and he kept track of the various items and their value during trading from his detailed knowledge of them but without any written record.

5 Sinan Ogun, the defendant/cross-claimant, said he was a consultant horticulturist and landscape gardener by occupation now living near Cairns in Queensland. In late-1999/early-2000 he was resident in the United States and was then, like Mr Michael, a member of Bartercard and engaged in selling artwork, artefacts, travel services and landscaping consulting services through Bartercard to other members. He made visits to Sydney from time-to-time in connection with his principal interest as an art collector.

6 It seems that, before the parties met, Mr Michael had sold goods to and purchased goods from Mr Ogun through Bartercard. In late-1999 or early-2000, while at the Parramatta office of Bartercard, Mr Ogun saw some artworks displayed by Mr Michael and arrangements were made for them to meet at the plaintiffs’ home at St Ives where Mr Ogun purchased some artworks for $6,900 paid for in Barter dollars. As Mr Michael explained, trading occurred by way of payment for goods in trade dollars which were actually credits or debits in an account held with Bartercard by a member; there were Bartercard organisations throughout the world to facilitate international trading between members. After this initial transaction, however, the goods traded between the parties were not through the Bartercard system but if an amount became outstanding as between them then it could, as they arranged, be cleared by the use of Bartercard dollars thereby avoiding Bartercard fees on the actual transaction.

7 At this initial meeting, it was common ground that the parties made an arrangement under which they would exchange artwork and artefacts. This was convenient because it allowed them to supply each other with goods for sale in the United States by Mr Ogun and in Australia by Mr Michael for their mutual benefit. The basis of the supply, outside the Bartercard system, was that the goods were on consignment from one to the other, they having agreed on a money price, so that the receiver had the right to sell the item and to retain any profit over or to bear any loss under the agreed price; there was to be an accounting in respect of goods sold from time-to-time and with the right for either to change his mind before a sale and return the goods. It is significant that although many transactions so occurred between the parties there was no recording of any accounting, formal or informal, of the transactions and, specifically, no running account was kept of the balance due to either party from the trading.

8 Having met and entered a business relationship, the parties decided in December 2000 to form Bramston Beach Plantation Resort Pty Limited to develop and operate a tourist facility in Queensland with four or five employees. The parties were to invest $500,000 each as capital in the company in the form of cash by the plaintiffs and Bartercard credits by Mr Ogun because he did not have the cash resources. Mr Michael and Mr Ogun were the directors of the new company and joint signatories to its bank account at the National Australia Bank, Turramurra Branch. Mrs Michael was the company secretary and took an active role in its management.

9 Mr Ogun until 1998 operated a landscaping business under the business name of “Systems Landscaping” until he moved overseas to the United States; however, he continued its bank account to allow for ongoing maintenance transactions and, with the formation of Bramston Beach, then transferred the bank account of Systems Landscaping to the Cairns Branch of National Australia Bank. Mr Ogun said the Systems Landscaping account was one of the accounts to be used for Bramston Beach purposes and, so, he arranged for Mr Michael to become a signatory to it; he also used the account for his own personal use. On the other hand, Mr Michael said he became a signatory to the account as security for the artworks and other monies he had provided to Mr Ogun. Until about March 2002, Mr Ogun said Bramston Beach used the Systems Landscaping bank account as its working account but Mrs Michael was adamant that that was not so as Systems Landscaping only ever paid some of the creditors of Bramston Beach if expedient to do so and would later be reimbursed. Bramston Beach went into liquidation shortly thereafter.

Transactions between the parties

10 The plaintiffs decided to holiday in the United States during the period of the Olympic Games in Sydney in September 2000. At the time, the defendant operated a travel agency known as “Travellers Tales”, and Mr Michael asked him to make the travel arrangements for the holiday. In an email sent on 27 August 2000, Mr Ogun advised the plaintiffs of the detailed itinerary for the trip portion before Seattle and advised costing of $US9,680 for internal flights, $US11,260 for accommodation and an interim amount of $US2,670 for extras such as entrance fees, boat trips, car hire and restaurants. The travel costs were to be paid with Bartercard credits by Mr Ogun with Bartercard credit reimbursement by the plaintiffs or cash payments for the non-Bartercard portion of the travel; Mr Michael said it had been agreed also that there would be a set-off against the travel costs unable to be paid by Bartercard credits of amounts owing by the defendant to the plaintiffs for artworks. Mrs Michael gave Mr Ogun her credit card details to enable bookings for accommodation to be made. The holiday was duly taken by the plaintiffs but a dispute later arose as to unauthorised debits said to be made by the defendant for his own purposes on Mrs Michael’s credit card in the sum of $9,183.11 – this was referred to in the proceedings as Claim 6 and, for convenience, I will so refer to it as I will do likewise with the other claims. On 31 October 2000, Mr Ogun emailed the plaintiffs advising that the total cost of the US trip was $US11,260 ($A21,394 at the then exchange rate), but excluding the queries by Mrs Michael on the alleged unauthorised credit card use which Mr Ogun was to look into. The plaintiffs had not paid this cost which then formed part of the defendant’s cross-claim against them.

11 In the meantime, and pursuant to the arrangement made in early-2000, shortly before October 2000 at the plaintiffs’ home Mr Ogun “purchased”(to be understood in accordance with the terms of the parties’ trading arrangement outside the Bartercard system) artworks from the plaintiffs to the value of $35,800; at the same time, the plaintiffs purchased three Pink Panther prints from Mr Ogun to the value of $1,800 – the balance therefore due to the plaintiffs from those transactions was $34,000. This transaction was referred to as Claim 1 and there was no dispute by Mr Ogun that those transactions occurred.

12 A short time later, Mr Ogun purchased from the plaintiffs artworks to the value of $8,900. This may be referred to as Claim 2 and, again, Mr Ogun did not dispute he received the goods.

13 Mr Michael said that in February 2001 he made an agreement with Mr Ogun, at Mr Ogun’s request, to loan $22,000 for repayment within a week. Apparently, Mr Ogun said he needed the money to pay lawyers in connection with the Bramston Beach project. On informing his wife of the loan, Mrs Michael expressed dissatisfaction because, as she said, “Sinan (Ogun) has not paid his contribution to Bramston Beach, will we ever get the money back?” Mr Michael, on assuring his wife, said cash in the sum of $22,000 taken from their home safe was deposited into Mr Ogun’s bank account but he could not recall who by or when or where the deposit was made.

14 Nevertheless, reference to this $22,000 amount around the relevant time was made in a number of documents, albeit somewhat briefly and perhaps obliquely, such as a letter dated 31 January 2002 from Mrs Michael to Mr Ogun in terms “Bells Direct Deposit Loan 8.2.2001 $22,000; handwritten letter by fax dated 22 February 2001 from Mr Michael to Mr Ogun stating “get my 22 000 back”; undated handwritten letter from Mr Michael to Mr Ogun pleading “because I am 25 000 down my income has severely reduced so it’s up to you”; email from Mrs Michael to Mr Ogun dated 26 April 2001 referring to $22,000; and email from Mrs Michael to Mr Ogun dated 22 May 2001 in which an amount of $22,000 (together with $3,000 making $25,000 from the Bramston Beach account as no doubt being the above reference by Mr Michael to “25 000 down” in his undated letter) was referred to as “personal loans to Sinan (Ogun)” as at 5 February 2001. Mr Ogun, significantly, made no response to any of that correspondence at the time and no challenge in the proceedings was made to the authenticity of the documents concerned.

15 In the pleadings, the plaintiffs alleged that Mr Michael deposited the $22,000 amount into a designated account nominated by Mr Ogun; in his defence, Mr Ogun did not traverse that pleading so that by operation of Pt 14 r14.26 of the Uniform Civil Procedure Rules 2005 the allegation by the plaintiffs is taken to be admitted. Otherwise, Mr Ogun denied liability to the plaintiffs for the amount of $22,000. This resulted in it becoming Claim 5 in the proceedings.

16 On or about 5 April 2001, Mr Michael said he advanced to Mr Ogun an amount of $12,440 by way of a loan to be repayable in a few months; Mrs Michael confirmed her husband informed her of this loan. The money was deposited at the Rose Bay Branch of the National Australia Bank on 5 April 2001 and deposit slips and bank statements noted such deposit. Although agreeing the $12,440 was in fact so deposited into System Landscaping’s account, Mr Ogun denied it was at his direction or nomination. Indeed, he denied any agreement had been made with Mr Michael for the loan and, therefore, liability to repay it was denied. Recovery of the $12,440 was Claim 4 in the proceedings.

17 During May 2001 in selling artworks at auction, the plaintiffs were to receive the proceeds in the amount of $8,041.76 from the auctioneers, Eric Dodd Pty Limited. At about the same time, Mr Michael said Mr Ogun asked to be loaned some funds so he could put them into the Bramston Beach project; repayment was said to be promised in a few months on the sale by Mr Ogun of his house in Seattle in the United States and, so, Mr Michael agreed. On receipt of the auction proceeds from Eric Dodd in June 2001, which Mr Michael arranged to be made out in the name of Systems Landscaping pursuant to his agreement with Mr Ogun, Mrs Michael deposited the $8,041.76 into the Systems Landscaping account at the National Australia Bank, Hornsby Branch; a deposit slip and bank statement confirmed the deposit had been made. Mr Ogun admitted the money had been so deposited but denied it was at his direction or nomination and liability was denied on the basis no loan agreement had been made. Recovery of the amount of $8,041.76 was Claim 3 in the proceedings.

18 Finally on the transactions leading to the plaintiffs’ claims, Claim 7 in the amount of $6,752.58 comprised $5,800 worth of artefacts purchased by Mr Ogun from the plaintiffs on 6 April 2001 plus $3,512.28 as damage caused by Mr Ogun to the plaintiffs’ motor vehicle in February 2001 in the total of $9,312.28. The defendant returned certain artefacts to the plaintiff valued at $2,560 in June 2007 resulting in the net amount due of $6,752.58. Mr Ogun admitted his indebtedness for this claim.

19 In summary, then, the claims by the plaintiffs against the defendant were –

Claim	Amount $
1	34,000.00
2	8,900.00
3	8,041.76
4	12,440.00
5	22,000.00
6	9,183.11
7	6,752.58
Total	$101,317.45

20 Against those amounts, the plaintiffs admitted that Mr Ogun had returned to them some of the artworks and artefacts in the total value of $14,300 and that Mr Michael had withdrawn on 11 April 2001 an amount of $5,096 from the Systems Landscaping account.

21 In summary, as to Claim 1 goods to the value of $10,900 were returned by Mr Ogun on 17 August 2007 leaving a balance due of $23,100 on that claim from the original amount of $34,000. There was a dispute as to this claim where Mr Ogun said he returned in December 2000 artworks to the value of $8,900 so that he owed the plaintiffs only $14,200; the plaintiffs denied these returns. As to Claim 2, $3,400 worth of artworks were returned by Mr Ogun on 17 August 2007, leaving a balance due of $5,500 on that claim from the original amount of $8,900. Those returns totalled $14,300 as referred to above.

22 As to Claim 4 for $12,440, the withdrawal by Mr Michael of $5,096 reduced this claim to $7,344.

23 Otherwise, the plaintiffs pressed the balance of the claims so that the resultant position was –

Claim	Total $
1	23,100.00
2	5,500.00
3	8,041.76
4	7,344.00
5	22,000.00
6	9,183.11
7	6,752.58
Total	$81,921.00

24 The cross-claim sought recovery of three amounts: first, $17,390 in respect of the artworks sold to the plaintiffs by Mr Ogun in March 2001but which have not been paid for or returned by the plaintiffs; second, $6,650 as to a payment received by the plaintiffs from Bartercard in September 2001, without Mr Ogun’s authority, of the proceeds of the sale of his Bartercard dollars and which had been retained by the plaintiffs; and, third, $23,649 being the Australian dollar equivalent of the plaintiffs’ travel costs of $US11,260 to the United States in September 2000 paid by Mr Ogun and which have not been repaid by the plaintiffs. The total claimed was $47,689. However, it was conceded for Mr Ogun as to the third stated item that the appropriate exchange rate at the time ($US1.00=$A1.90) gave a more correct amount of $21,394. Therefore, this cross-claim was argued so as to recover the amount of $45,434.

25 The first two amounts sought in the cross-claim were accepted by the plaintiffs as owing by them. The dispute thus related to the alleged unpaid travel costs of $21,394.

26 By applying a set-off approach, the net balance of the claims if all be granted favours the plaintiff in the amount of $36,487.45. Section 90(2) of the Civil Procedure Act 2005, where there is a claim and a cross-claim, enables the Court to give judgment for the balance only of the sums of money awarded on the respective claims or to give judgment in respect of each claim; costs may be similarly dealt with.

Issues in the proceedings

27 Having in mind the transactions between the parties and the ways in which the matter was argued, the issues to be decided by the Court are as follows –

(1) Whether the defendant in December 2000 returned to the plaintiffs artworks valued at $8,900 so as to reduce Claim 1 to $14,200 from $23,100; otherwise, the balances of this claim of $14,200 and of $5,500 as to Claim 2 were admitted as owing by Mr Ogun.

(2) Liability of the defendant to the plaintiffs to repay the alleged loans the subject of Claims 3, 4 and 5 in the total sum of $37,385.76.

(3) Liability of the defendant to the plaintiffs in respect of the alleged unauthorised use of their credit cards in the sum of $9,183.11 being Claim 6.

(4) Liability of the plaintiffs to pay the defendant the alleged travel costs of $21,394 as sought in the cross-claim.

28 For completeness, and perhaps clarity of the issues, the defendant accepted he was liable to the plaintiffs for a total of $26,452.58 (made up respectively of $14,200 for Claim 1, $5,500 for Claim 2 and $6,752.58 for Claim 7). The plaintiffs admitted liability to the defendant on the cross-claim for $24,040 (made up respectively of $17,390 worth of artworks sold to the plaintiffs in March 2001 and $6,650 as to monies received by the plaintiffs from Bartercard in September 2001). Thus, the net balance agreed to be owing by the defendant to the plaintiffs was $2,412.58.

29 The disputed amount said to be owing by the defendant to the plaintiffs totalled $55,468.87 and that said to be owing by the plaintiffs to the defendant was $21,394.

Return of artworks – Claim 1

30 Both plaintiffs were adamant that these artworks to the value of $8,900 were never returned by Mr Ogun. He admitted receiving them in about June 2000 at the plaintiffs’ home but, consistent with the parties’ agreement, said he returned them in December 2000 during one of his trips to Australia from the United States. He said he had informed the plaintiffs of his intention to do so when they were in the United States on holiday in September 2000.

31 The only record held by Mr Michael of these goods was the handwritten note made by him at the time of delivery of the goods but which later had the notation made by him of “X” against each of the four items and with the abbreviation “RET.” Some of the writing on this note, such as parts of the reconciliation of the money amounts, was by Mr Ogun’s hand. Mr Ogun accepted that “RET” meant that the goods were to be returned and did not record that they had been returned. Even so, he pointed to an email dated 31 October 2000 from him to the plaintiffs, regarding the costing of their trip to the United States, and in which he relevantly said “When you left our calculations were that I owed you Aust $34,000 once I get these etchings and posters back to you – which I’ll bring with me when I come over.” That email comment was consistent with the meaning accepted by Mr Ogun of the abbreviation “RET,” which was possibly inserted during the September 2000 discussions, and consistent with the calculations on the note showing a net amount owing by him of $34,000 on return of the four artworks valued at $8,900. Of course, it all depends upon whether in fact Mr Ogun returned the goods in December 2000. As support that he may have done so appears in the minutes of a meeting of the directors of Bramston Beach, at which all parties were present, in January 2002 but during which there were, as the minutes said, “many interruptions”; a discussion occurred about money owing by Mr Ogun personally to the plaintiffs and in respect of which the minutes recorded “KM (Mrs Michael) said that SO (Mr Ogun) owes $34K.”

32 Mr Michael was tested extensively on this aspect, particularly in the context of his lack of stock records and failure to record transactions, and his evidence showed vagueness and some uncertainty of events. For instance, he conceded the abbreviation “RET,” which he said was not written by him, and the four “X” marks meant that the goods concerned were “quite possibly” returned to him. He accepted as “possible” that when visiting Mr Ogun in Seattle in September 2000 he suggested Mr Ogun return the goods next time he was in Sydney and then added he did not know if the goods were returned but was “pretty sure” they were not. The practice when returns were made was for Mr Michael to receive them back into stock and Mrs Michael was not involved in this process; however, she kept the stock records. No stock records were offered as evidence to show the presence or otherwise at the relevant times of the four artworks in dispute here.

33 Perhaps curiously on the pleadings, Mr Ogun in his original defence to Claim 1 filed on 12 April 2006 made no mention of any return of goods, simply that the allegations were not admitted. However, in the amended defence filed on 17 August 2007 to the amended statement of claim he responded that “the Defendant did not take or returned to the Plaintiff goods to the value of $8,900.” But in his affidavit earlier sworn on 13 March 2007 he said the items marked with an “X” valued at $8,900 were retuned to Mr Michael. A suggestion to Mr Ogun that he had never returned these goods met with a firm reply that that was “not the truth.” He said mention in the original pleadings of the returns was not made because he only realised the goods had been returned upon looking at his records so that relevant reference was made in his affidavit in March 2007. However, it is to be remarked, that does not sit easily with the fact the affidavit was sworn before the amended pleading in which the response was either the goods were not taken or were returned. In any case, the records from which Mr Ogun apparently reminded himself of the return of the goods were not produced.

34 I have to say I found the evidence of both Mr Michael and Mr Ogun on this aspect less than convincing. The former, on the one hand, was vague and uncertain about details but adamant no returns of these four artworks had been made; his stock recording was simply lacking. On the other hand, Mr Ogun seemed prepared to answer questions to suit his case, such as the recall of memory by unproduced records and the inconsistency between the 13 March 2007 affidavit and the August 2007 amended defence. The documentary material touching this issue, however, favoured Mr Ogun’s position, particularly the entry in the January 2002 minutes of the meeting of the directors of Bramston Beach.

35 The onus to make out this claim rests on the plaintiffs. I am not satisfied that more likely than not they have shown the four artworks concerned were not returned. This claim must be dismissed. Claim 1 therefore stands in the plaintiffs’ favour over the defendant in the amount of $14,200.

Personal loans – Claims 3, 4 and 5

36 The situation in which these three alleged loans from the plaintiffs to the defendant arose concerned the Bramston Beach development over the period from February 2001 to about June 2001. At the time, the parties had become involved in the joint venture for developing the resort in respect of which they had to make substantial financial commitments. The plaintiffs had the resources but Mr Ogun was so constrained of funds that he used Bartercard credits for the purpose pending the sale of his house in Seattle. It seemed that Mr Ogun at the time was borrowing monies form various sources but he denied doing so from the plaintiffs.

37 Claim 5: It was pleaded for the plaintiffs that in January or February 2001 an agreement was made with Mr Ogun to lend him $22,000 on terms that it would be repayable on demand. Mr Ogun denied the debt. Mr Michael deposed in his affidavit sworn on 7 April 2008:

“During or about February 2001, SO (Mr Ogun) asked me to advance funds to him in the amount of $22,000.00 under the following circumstances. SO telephoned me. I had the following conversation with SO:


SO: ‘Chris, could you please lend me another $22,000.00 so that I can pay the lawyers their fees for the project at Bramston Beach. I will repay the money within a week. I am expecting funds to be paid to me by Greg Gibson. I will repay this within a week or so'.

CDM: 'OK. I will deposit the money today.’”

After advising his wife of that conversation, who confirmed the substance of its contents, Mr Michael said he took $22,000 from the safe at his house and banked it into Mr Ogun’s account at a bank in Turramurra. He so advised his wife who confirmed it in evidence.

38 For his part, Mr Ogun in his affidavit sworn on 3 July 2008 denied the stated conversation with Mr Michael and said “at no time did I request the Plaintiffs lend me the amount of $22,000.00.” He produced the bank statement from his Systems Landscaping account at the National Australia Bank which had no record during the month of February 2001 of a deposit of $22,000.

39 In cross-examination, Mr Michael accepted he had no receipt from the bank of the deposit, saying it had been lost, or any other evidence the deposit had been made; indeed, he could not recall which bank it was or the name of the account into which the money was deposited. As to the suggestion the $22,000 was loaned to Bramston Beach he was definite it was a loan to Mr Ogun personally but conceded it was “quite possible” it was a loan by way of a payment to the solicitors for Bramston Beach – that, one may remark, was consistent with Mr Michael’s primary evidence of the purpose of the loan, as stated by Mr Ogun, but nonetheless still a loan to Mr Ogun personally to enable him to discharge certain obligations he had in contributing funds to Bramston Beach.

40 It is significant that the claim for this amount of $22,000 was not contained in the original statement of claim but appeared in the amended claim filed on 17 July 2007. Mr Michael explained in his affidavit sworn on 19 January 2007 that recovery was sought originally from the liquidator of Bramston Beach on it being wound up in 2003 but on the liquidator not being satisfied it was Mr Michael’s money provided to Bramston Beach the claim was refused – thereupon the plaintiffs sought recovery from Mr Ogun. Mr Michael emphasised that “the defendant was obliged to invest certain money in the Company for the purchase of the property which he was unable to do. I did not pursue the defendant for payment of the sum of $22,000 because that amount was actually invested into the Company and I stipulated that as being part of my claim against the Company.”

41 It may be, of course, although there is no direct evidence of this, that having in mind the circumstances of this claimed deposit of $22,000 it was put into the Bramston Beach account or paid directly to the lawyers concerned – those possible recipients were not pursued to produce any records. In any event, as I have acknowledged above, the allegation in the amended claim that Mr Michael deposited the amount of $22,000 into a designated account nominated by the defendant at a bank in Turramurra was not traversed by Mr Ogun in his amended defence. Therefore, any issue whether such a deposit was in fact made does not arise as having been admitted by Mr Ogun. The only issue is as to whether the money was a loan to Mr Ogun personally as now claimed by the plaintiffs.

42 A number of documents are applicable in a determination of that outstanding issue. I have earlier referred to those documents and what they relevantly contained. And, as I then commented, Mr Ogun made no response to those documents and their authenticity was not challenged. The most significant of them for present purposes, I think, is the email dated 4 May 2001 from Mrs Michael to Mr Ogun in which a personal loan to Mr Ogun of $22,000 on 5 February 2001 was recorded. Then there is the letter dated 31 January 2002 from Mrs Michael to Mr Ogun in which $22,000 was included as a loan on 8 February 2001 being then still to be repaid by Mr Ogun. I repeat, those documents were neither answered nor otherwise explained by Mr Ogun.

43 Mr Michael, as admitted by Mr Ogun, deposited in February 2001 into a bank account at Turramurra nominated by Mr Ogun cash in the sum of $22,000. I accept Mr Michael’s evidence that the deposit was made at Mr Ogun’s request as a loan to him personally to enable him to meet certain obligations concerning legal fees for Bramston Beach as part of his contribution to the joint venture. Therefore, in my view, Mr Ogun is liable to repay the plaintiffs the $22,000. Claim 5 has been established.

44 Claims 3 and 4: These two claims, respectively for $8,041.76 and $7,344 may be considered together. I have earlier recited the circumstances in which they arose and that Mr Ogun did not dispute the monies had been deposited into his Systems Landscaping account in respectively June 2001 and April 2001. It need only be noted that the original deposit in April 2001 was $12,440 but, after Mr Michael withdrew $5,096 from the Systems Landscaping account shortly thereafter, the net amount reduced to $7,344. Mr Ogun nevertheless denied liability to repay the loans.

45 Mr Michael deposed to a conversation with Mr Ogun on 5 April 2001 during which he agreed to lend Mr Ogun $12,444. On 11 April 2001 Mr Michael re-paid himself $5,096 from the Systems Landscaping account giving a balance still due of $7,344. In June 2001 Mr Michael agreed to a further request by Mr Ogun for a loan to put money into the Bramston Beach project and said he would repay it in a few months or when he sold his Seattle house. As stated earlier, $8,041.76 was thereupon deposited into the account of Systems Landscaping. Mrs Michael confirmed those events as told to her by her husband.

46 Mr Ogun denied the two deposits were loans to him, even though deposited into an account controlled by him, and, specifically, he denied the conversations with Mr Michael. He accepted the deposits were so made and deposit slips produced by Mrs Michael (dated respectively 5 April 2001 and 7 June 2001) and bank statements as to the Systems Landscaping account with National Australia Bank confirm that that was so. However, Mr Ogun never answered the entry in the email dated 4 May 2001 from Mrs Michael to him which referred to the amount of $12,440 as a personal loan to Mr Ogun.

47 I accept the evidence given for the plaintiffs in respect of these two claims as consistently credible and supported by the documentary material. Therefore, Claims 3 and 4 have been made out so that Mr Ogun is liable to repay the plaintiffs $8,041.76 and $7,344 respectively.

Credit card transactions – Claim 6

48 This claim seeks to recover what was called the unauthorised credit card transactions by Mr Ogun acting as the plaintiffs’ travel agent for their September 2000 holiday to the United States. There were four such instances totalling $9,183.11: (i) Diners Club card on 5 December 2000 for $2,013.95; (ii) Visa card on 12 December 2000 for $2,347.87; (iii) Visa card on 18 September 2000 for $4,578.69; and (iv) Visa card on 26 September 2000 for $242.60.

49 The context in which this claim arose concerned Mrs Michael who dealt with Mr Ogun in making the travel arrangements for the holiday. In a discussion with Mr Ogun at her home in mid-2000, she said she became aware that Mr Ogun operated the “Travellers Tales” travel agency and he offered to make the travel arrangements to be paid for in Bartercard dollars; she accepted, with the condition that he was to provide all invoices. Mr Ogun so proceeded but it emerged that he found difficulty in making the arrangements using the Bartercard system and, so, Mrs Michael said he called for another convenient form of payment. Mrs Michael said she told him:

“You may debit our credit card for the arrangements that you have made in respect of our accommodation and other charges but strictly on the basis that you let us know what charges you intend to debit so that we can ensure that there are funds to manage the cash flow.”

She said Mr Ogun responded:

“I will only use the credit card for your specific travel and accommodation arrangements and I will let you know ahead of time what the costs are.”

Mrs Michael said she agreed.

50 Mrs Michael identified four debits from credit cards which were challenged being –

• Diners Club account of Mr Michael of a debit of $2,013.95 on 5 December 2000 for accommodation at the Travelodge in Everett.
• National Bank Visa account of Mr Michael of a debit of $2,347.87 on 12 December 2000 by Austravel Inc for services in San Francisco.
• National Visa Gold account of Mrs Michael of a debit of $4,578.69 on 18 September 2000 by Imports International in Los Angeles.
• National Visa Gold account of Mrs Michael of a debit of $153.02 by LA Times Advision and of $89.58 by Sea Times PI Classifieds, a total of $242.60, both on 26 September 2000.

Mrs Michael said none of those debits concerning her card in September 2000 were authorised by her in that the plaintiffs did not advertise anything while in the United States and she was not familiar with Imports International. Mr Michael similarly denied giving any authorisation as to his two credit cards in December 2000 in that the plaintiffs were not in the United States during that month. Mrs Michael’s evidence was that, as it tuned out, most of the travel in the United States was paid for by the plaintiffs in cash or by credit card when the service was obtained. Mrs Michael said she raised the three September 2000 debits on her Visa card with Mr Ogun and acknowledged an email dated 31 October 2000 from him regarding the travel costs in which he said, as she conceded probably as to those three charges, “just to be safe you need to check Kathleen’s Visa card. There should be three charges totalling approx $200. These were cash fees incurred but instead of paying BXI (Bartercard) directly they requested to pay their advertising. I want to make sure that the card is correctly charged.” Mrs Michael said Mr Ogun agreed to look into the other charge on her Visa account of $4,578.69 and advise but he never did.

51 It is significant that at no time had either of the plaintiffs made any enquiries of Diners Club or National Bank Visa as to the questioned credit card debits; and neither had they contacted the service providers for information.

52 Mr Ogun agreed he made the travel arrangements for the plaintiffs and their two children to the United States in September 2000 and, for that purpose, Mrs Michael provided him with her National Visa credit card details; she accepted that she may have given him her husband’s credit card details as well, but Mr Ogun denied being given Mr Michael’s details.

53 Mr Ogun, with some emphasis, denied under cross-examination that he posted the challenged credit card debits. However, as to those totalling $242.60 he said his 31 October 2000 email referred to them and that he told the provider that it was not his card and gave the plaintiffs’ email contact address so authority to debit those charges could be obtained. Otherwise, as to the debits, he denied authorising any such charges.

54 In his affidavit sworn on 3 July 2008, it is noteworthy that Mr Ogun deposed:

“Shortly after the plaintiffs returned from the United States in October 2000 they requested that I make a booking for KM’s (Mrs Michael) mother to travel from England to Australia using the same credit card.”

Whether that was what the two December 2000 credit card debits on Mr Michael’s Diners Club and Visa cards concerned was not clear as this aspect was never explained nor furthered in evidence.

55 It is instructive also that in the pleadings the plaintiffs alleged as to the four debits concerned and the defendant so responded, as follows:

Claim: “23. During September 2000 the plaintiffs and the defendant entered into an agreement in terms of which the plaintiffs authorised the defendant to debit credit cards of the plaintiffs specifically for and only for the purposes of securing accommodation and related matters for the plaintiffs during the plaintiffs’ tour of the United States of America during September and October 2000.

…

24. The defendant without authorisation debited the plaintiffs’ credit cards for purposes other than those for which authority was granted.”

Defence: “20. In answer to paragraph 23 of the Amended Statement of Claim the Defendant admits that there was an agreement between the Plaintiffs and the Defendant that the Defendant was authorised by the Plaintiffs to provide the Plaintiffs’ credit card details for the purposes pleaded.

21. The Defendant denies that he authorised debits on the Plaintiffs’ credit card other than for the purposes of securing accommodation and related expenses for the purposes referred to in paragraph 23 of the Amended Statement of Claim and denies that he received any benefit in relation to any and all charges debited to the Plaintiffs’ credit card.”

56 It is clear from an overall view of the evidence, the main aspects of which I have recited, that Mr Ogun was given authority by Mrs Michael, as she said in her affidavit, to debit her credit card for the travel arrangements, provided he advised her of the charges concerned.

57 As to the September 2000 amount of $242.60, Mr Ogun acknowledged his use of the credit card and explained it by reference to the service provider in terms of the Bartercard arrangement. In my view, he had authority to do so; indeed, he so advised Mrs Michael in the email of 31 October 2000. It has not been shown this debit was unauthorised and I therefore disallow the plaintiffs’ claim as to this item.

58 As to the two debits in December 2000 concerning the debits from Mr Michael’s credit cards (Diners Club of $2,013.95 and Visa of $2,347.87), there was no evidence that Mr Ogun had such card details, other than that Mrs Michael said she gave him details of her own Visa card and may have given her husband’s card details as well. In any case, these debits occurred about two months after the holiday travel by the plaintiffs, they may have related to the travel by Mrs Michael’s mother from England, but there was no evidence provided by the plaintiffs of who, when or for what the monies actually were used and they made no enquiries, or provided any documents, from the service providers concerned or the credit card organisations of the source of these debits. It was simply not shown, particularly having in mind Mr Ogun’s denials, that he had anything to do with these December 2000 debits. The claims for their reimbursement by the defendant are disallowed.

59 As to the remaining September 2000 claim for $4,578.69 on Mrs Michael’s Visa card, there was similarly no evidence of Mr Ogun’s involvement with it. I emphasise in particular that the plaintiffs offered no evidence of any enquiries from the credit card institutions or from the service provider concerned and Mr Michael’s credit card details probably were not supplied by Mrs Michael to Mr Ogun. Also, it would be not inconsistent with Mr Michael’s Bartercard trading for him to have dealt with Imports International and used his Visa credit card – on this, however, there was no evidence and it is mentioned only as a possible credible explanation. This claim of the plaintiffs is disallowed.

Summary of conclusions on the Claim

60 In the result, the plaintiffs’ claim succeeds in the following respects to the extent shown –

Claim	Amount $
1	14,200.00
2	5,500.00
3	8,041.76
4	7,344.00
5	22,000.00
6	-
7	6,752.58
Total	$63,838.34

Travel and accommodation costs – Cross-claim

61 The sole issue on the defendant’s cross-claim was for the reimbursement of travel and accommodation costs he incurred in respect of the plaintiffs’ holiday to the United States in September/October 2000 in the sum of $21,394 being the Australian dollar equivalent of $US11,260. The defendant/cross-claimant said he paid for such costs by Bartercard dollars but the plaintiffs/cross-defendants had not reimbursed him or supplied artworks to him valued in an equivalent amount. They, on the other hand, pleaded that although he undertook as travel agent to pay such costs he did not in fact do so; in the alternative, they pleaded that any money paid by him was in fact reimbursed by them. The exchange rate was put in issue.

62 The circumstances in which the claim arose have been earlier stated, particularly when dealing with Claim 6. It is clear, on any view of the evidence, that the travel costs were proposed by the parties originally to be paid for within the Bartercard system but, because Mr Ogun had difficulties in making all of the arrangements by that means, he so advised the plaintiffs and there was agreement another form of payment was needed; hence, Mrs Michael informing Mr Ogun of her credit card details. However, she said it transpired that most of the travel arrangements were paid for by the plaintiffs in cash or by credit card. For Mr Ogun’s part, he proceeded on the basis that some of the expenses could be paid for in Bartercard dollars and others by the plaintiffs’ providing him with artworks to the same value. Indeed, an undated facsimile note (presumably before September 2000) was sent to him by Mr Michael setting out a list of artworks as “the list with trade values to you for air fares.” Thereupon, Mr Ogun proceeded to make the travel arrangements for the plaintiffs and their two children.

63 Eventually, Mr Ogun by email to the plaintiffs on 31 August 2000 advised the outline of an itinerary and a detailed itinerary up to 10 September 2000 when they were to stay in Seattle. It stated internal flights were to cost $US9,680, total accommodation $US11,260 and additionals so far $US2,670. As to international flights, Mr Ogun said he purchased two tickets with Bartercard dollars, but with cash for taxes and airport fees, and the plaintiffs purchased two tickets. He provided statements of some of the Bartercard purchases by him on behalf of the plaintiffs but without identifying particular transactions which were relevant. Other transactions were not supported by Mr Ogun by any documentation because, as he said, “I have not been able to locate any other documents…Bartercard Canada…has gone bankrupt and ceased to carry on business.” Even so, Mr Ogun deposed that “the total Bartercard charges to my accounts for the plaintiffs’ travel to the United States was $US11,260. He provided a table of currency exchange rates for the period September/October 2000 which, it was accepted, showed the multiplier to convert US dollars to Australian dollars was about 1.9; for an amount of $US11,260, the equivalent was $A21,394 being the amount sought by Mr Ogun in his cross-claim. However, there was no evidence of the currency equivalent of Bartercard dollars.

64 On the plaintiffs’ return to Australia in October 2000, Mrs Michael questioned Mr Ogun on the costs of the holiday as to the amount said to be owing to him and she asked for a reconciliation. Mr Ogun never provided such information. At best, in an email dated 31 October 2000 to the plaintiffs he advised – “With regards to the costing for the US Trip this is how the numbers came up: Total Trade US$11,260.” Again, however, and despite requests from Mrs Michael, there was no reconciliation of that amount which, it is to be noted, was in “Trade” dollars and not in conventional currency.

65 For the defendant, the claim was supported with the submission that he had consistently claimed the sum of $US11,260 and where such amount was never challenged by the plaintiffs who had made no reimbursement in respect of those travel expenses.

66 On the evidence, Mrs Michael did challenge the amount claimed by asking for a reconciliation and where some of the travel costs were in fact paid by the plaintiffs themselves. In any event, there was no evidence as to how Bartercard dollars, or perhaps more accurately Bartercard credits, were to be valued so that the Court is unable to engage in an exercise of converting trade points from a foreign trade organisation into any foreign or Australian currency.

67 In the circumstances, I am simply unable to be satisfied that the defendant has established liability in the plaintiffs to pay the travel costs as sought in the cross-claim. This element of the cross-claim must fail.

Summary of conclusions on the Cross-claim

68 In the result, the defendant’s cross-claim succeeds in the total amount of $24,040 made up of $17,390 for artworks sold by the defendant to the plaintiffs in December 2000 and $6,650 received by the plaintiffs from the defendant on 26 September 2001.

Conclusions

69 The plaintiffs are entitled to a verdict against the defendant on the claim in the amount of $63,838.34. The defendant is entitled to a verdict against the plaintiffs on the cross-claim in the amount of $24,040. The balance of such verdicts favours the plaintiffs in the amount of $39,798.34. The parties are to be heard on interest and costs before final orders are made.

Orders

70 Separate verdicts should be found on the claim and the cross-claim. As to the entry of judgment, the parties will be heard as to whether it is appropriate in the circumstances here to do so for the balance favouring the plaintiffs by way of a set-off approach or separately in respect of each claim.

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