Michaud v Stefanovski
[2016] WASCA 85
•27/05/16
MICHAUD -v- STEFANOVSKI [2016] WASCA 85
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2016] WASCA 85 | |
| THE COURT OF APPEAL (WA) | |||
| Case No: | CACV:3/2015 | 4 APRIL 2016 | |
| Coram: | MARTIN CJ BUSS JA MURPHY JA | 27/05/16 | |
| 18 | Judgment Part: | 1 of 1 | |
| Result: | Appeal dismissed | ||
| B | |||
| PDF Version |
| Parties: | ROGER MARCEL MICHAUD DANNY DRAGI STEFANOVSKI |
Catchwords: | Evidence Agreement for loan Plaintiff found to give false evidence that loan agreement had been reduced to writing Forged document Whether judge erred in accepting plaintiff's evidence as to oral agreement for loan Whether error of law in accepting plaintiff's evidence Principles applicable to appellate review Alleged miscarriage of justice based on counsel's alleged incompetence in defending plaintiff's claim Whether evidence of incompetence as alleged Loan agreement No term for repayment agreed Loan created an immediate debt |
Legislation: | Nil |
Case References: | Browne v Dunn (1893) 6 R 67 Devries v Australian National Railways Commission [1993] HCA 78; (1993) 177 CLR 472 Equuscorp Pty Ltd v Glengallan Investments Pty Ltd [2004] HCA 55; (2004) 218 CLR 471 Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 Heydon v Perpetual Executors Trustees & Agency Co (WA) Ltd (1930) 45 CLR 111 Jazairy v Najjar (1998) 27 MVR 498 Pacific Carriers Ltd v BNP Paribas [2004] HCA 35; (2004) 218 CLR 451 State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (in liq) [1999] HCA 3; (1999) 160 ALR 588 Stefanovski v Michaud [2014] WADC 141 Varmedja v Varmedja [2008] NSWCA 177 Warley Pty Ltd v Adco Constructions Pty Ltd (1988) 8 BCL 300 Young v Queensland Trustees Ltd [1956] HCA 51; (1956) 99 CLR 560 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE COURT OF APPEAL (WA) CITATION : MICHAUD -v- STEFANOVSKI [2016] WASCA 85 CORAM : MARTIN CJ
- BUSS JA
MURPHY JA
- Appellant
AND
DANNY DRAGI STEFANOVSKI
Respondent
ON APPEAL FROM:
Jurisdiction : DISTRICT COURT OF WESTERN AUSTRALIA
Coram : MCCANN DCJ
Citation : STEFANOVSKI -v- MICHAUD [2014] WADC 141
File No : CIV 3850 of 2011
Catchwords:
Evidence - Agreement for loan - Plaintiff found to give false evidence that loan agreement had been reduced to writing - Forged document - Whether judge erred in accepting plaintiff's evidence as to oral agreement for loan - Whether error of law in accepting plaintiff's evidence - Principles applicable to appellate review - Alleged miscarriage of justice based on counsel's alleged incompetence in defending plaintiff's claim - Whether evidence of incompetence as alleged
Loan agreement - No term for repayment agreed - Loan created an immediate debt
Legislation:
Nil
Result:
Appeal dismissed
Category: B
Representation:
Counsel:
Appellant : Mr R W Bower
Respondent : Mr C McIntosh
Solicitors:
Appellant : Corser & Corser
Respondent : Swan River Law
Case(s) referred to in judgment(s):
Browne v Dunn (1893) 6 R 67
Devries v Australian National Railways Commission [1993] HCA 78; (1993) 177 CLR 472
Equuscorp Pty Ltd v Glengallan Investments Pty Ltd [2004] HCA 55; (2004) 218 CLR 471
Fox v Percy [2003] HCA 22; (2003) 214 CLR 118
Heydon v Perpetual Executors Trustees & Agency Co (WA) Ltd (1930) 45 CLR 111
Jazairy v Najjar (1998) 27 MVR 498
Pacific Carriers Ltd v BNP Paribas [2004] HCA 35; (2004) 218 CLR 451
State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (in liq) [1999] HCA 3; (1999) 160 ALR 588
Stefanovski v Michaud [2014] WADC 141
Varmedja v Varmedja [2008] NSWCA 177
Warley Pty Ltd v Adco Constructions Pty Ltd (1988) 8 BCL 300
Young v Queensland Trustees Ltd [1956] HCA 51; (1956) 99 CLR 560
- REASONS OF THE COURT:
Introduction
1 This is an appeal against a decision of McCann DCJ in which his Honour ordered that the appellant, Mr Michaud, pay the respondent, Mr Stefanovski, the sum of $74,200 plus costs: Stefanovski v Michaud1 (primary reasons).
2 The appeal should be dismissed for the following reasons.
Background
3 The judge found the following facts to be not in dispute.
4 As at November 2010, Mr Stefanovski, Mr Michaud and Mr Michaud's brother, had been close friends for many years.
5 Mr Michaud had been the proprietor of a business which provided a range of services to clients relating to residential constructions (Michaud Business). Mr Stefanovski had been employed in the business, including in relation to promotional activities. That employment ended prior to November 2010, when Mr Stefanovski joined the Summit Group.
6 On or about 10 March 2010, Mr Michaud and his partner purchased a property in Cottesloe. The settlement took place on 10 August 2010. Mr Michaud's brother and his partner (Ms McNamara) had lent Mr Michaud approximately $147,000 to assist with the purchase. On 26 October 2010, Ms McNamara lodged a caveat against Mr Michaud's interest in the property. She claimed that interest as equitable mortgagee pursuant to an acknowledgment of debt.
7 Also in 2010, Mr Stefanovski and his mother owned a property in Marangaroo, which they were attempting to sell. Mr Michaud offered to expedite the process. He spoke to a real estate agent twice, and the property was sold within a few days.
8 Settlement of the Marangaroo sale took place on 17 November 2010. In relation to the disbursement of the proceeds of sale, amongst other things:
(a) a payment of $20,000 was made to the Michaud Business;
(b) a payment of $37,000 was made to 'Thornlie Just Commodore', for the purchase of two motor vehicles, one for Mr Stefanovski and one for Mr Stefanovski's brother; and
(c) a sum of $143,235.17 was deposited into Mr Stefanovski's bank account with the Commonwealth Bank of Australia (Mr Stefanovski's bank).
9 A week later, on 24 November 2010, Mr Stefanovski and Mr Michaud attended Mr Stefanovski's bank. On this occasion:
(a) Mr Stefanovski withdrew $110,000 and split the proceeds into two bank cheques at Mr Michaud's request;
(b) the first cheque, for $80,000, was payable to Ms McNamara and was immediately paid into her account;
(c) the second cheque, for $30,000, was payable to the Michaud Business and was immediately paid into the account of the Michaud Business.
10 By October 2011, the parties were in dispute as to how much Mr Michaud owed to Mr Stefanovski, if anything. There was unpleasantness between the two, and Mr Michaud obtained a misconduct restraining order against Mr Stefanovski.
11 Mr Stefanovski subsequently commenced proceedings against Mr Michaud alleging that the payment of $110,000 at Mr Michaud's direction was a loan to Mr Michaud.
Mr Michaud's defence at trial
12 The primary judge said that Mr Michaud, in his defence, pleaded, in effect, that pursuant to an oral agreement made on or about 24 November 2010, Mr Stefanovski had lent him $30,000, payable within one year, and that loan had been repaid. The judge also said that the plea 'concealed' Mr Michaud's case at trial, which was to the following effect:
(a) Mr Stefanovski withdrew $110,000 from the bank on 24 November 2010;
(b) from this withdrawal, Mr Stefanovski paid:
(i) $70,000 to Mr Michaud, of which:
A. $10,000 was a gift to Mr Michaud;
B. $30,000 was a loan to Mr Michaud (being the loan referred to in his defence); and
C. $30,000 was by way of repayment of a debt due to Mr Michaud; and
(ii) $40,000 was paid to Mr Michaud's brother, comprising:
A. a $20,000 repayment of an earlier debt owed to Mr Michaud's brother; and
B. a fresh loan of $20,000 to Mr Michaud's brother.
Mr Stefanovski
13 With respect to the $20,000 disbursed from the sale of the Marangaroo property to the Michaud Business, Mr Stefanovski's evidence was to the effect that it was a loan to Mr Michaud to enable Mr Michaud to buy, restore and then resell a car. Mr Stefanovski denied that it was a repayment for 'advances' of commissions paid to him by the Michaud Business which he had never earned. The judge found that the $20,000 had never been repaid by the Michaud Business, and there was no claim for it in these proceedings.
14 Mr Stefanovski also gave evidence to the effect that Mr Michaud was regularly importuning him for a loan in the period leading up to 24 November 2010, in the range of $50,000 - $150,000. Mr Stefanovski finally relented and agreed to make a loan to Mr Michaud of $100,000 for a short period, on the basis that it would be repaid with interest of $20,000. Mr Stefanovski insisted that the loan agreement be drawn up by a lawyer, but Mr Michaud 'fobbed him off' with various excuses. However, at a meeting in November 2010 at Mr Michaud's Cottesloe home, Mr Michaud produced to Mr Stefanovski a written loan agreement, but told him that his lawyer had been held up and could not attend the meeting. They both signed the loan agreement, although Mr Stefanovski noticed that the figure in the document was $100,000, whereas he was lending $110,000. Mr Stefanovski accepted Mr Michaud's assurance that the agreement would be changed to reflect the higher sum. They then hastened to the bank to proceed with the withdrawal of the funds from Mr Stefanovski's account.
15 The original loan agreement was not in evidence, but a photocopy was tendered without objection, save for the contention by Mr Michaud that it was a forgery. In cross-examination, Mr Stefanovski denied that he had forged Mr Michaud's signature on the document, and denied that he had handwritten the parties names underneath the signatures.
16 Mr Stefanovski also denied, in cross-examination, that he owed Mr Michaud and/or the Michaud Business the sum of $50,000 or any other sum, and denied having repaid sums of $20,000 and $30,000 on 17 and 24 November respectively.
17 The judge had 'deep reservations' about the reliability of Mr Stefanovski's evidence. The judge also found that Mr Stefanovski admitted that Mr Michaud had made some payments and paid some bills for him after 24 November 2010, possibly totalling $17,200. His Honour said that it was therefore not to Mr Stefanovski's credit that he was still claiming the full $100,000. (Although Mr Stefanovski's evidence was that the advance was $110,000, he only sued for $100,000, and 'waived $10,000'.)2
Ms McNamara
18 Ms McNamara gave evidence to the effect that her partner, Mr Michaud's brother, handled all their financial affairs, and she could not shed any light on the disputed transactions. The judge accepted her evidence.
Mr Michaud's brother
19 Mr Michaud's brother gave evidence, which was found to be 'very unsatisfactory and contradictory'.3
Mr Michaud
20 Mr Michaud's evidence was to the following effect.
21 In or around 2008, he lent Mr Stefanovski $30,000, but he provided no particulars or documentary evidence in that regard. He also said that the Michaud Business advanced Mr Stefanovski another $20,000 over 10 months in 2009 - 2010, on account of commissions which were never ultimately earned. There were no particulars or corroborative documentary evidence in that regard either.
22 As an investment, Mr Michaud bought a Commodore car from a friend of Mr Stefanovski prior to the sale of the Marangaroo property, but he did not borrow any money from Mr Stefanovski to do so.
23 In the days prior to 24 November 2010, Mr Stefanovski agreed to repay Mr Michaud the original $30,000 loan, and to lend him a further $30,000. Mr Stefanovski also offered Mr Michaud an additional $10,000 in recognition of past help, such as assisting in the sale of the Marangaroo property and providing vocational training.
24 During November 2010, Mr Michaud regularly spoke to his brother about repaying him and Ms McNamara when he was put in funds by Mr Stefanovski. In this process, he became aware that his brother was also 'getting money' from Mr Stefanovski.
25 Mr Michaud denied that he ever signed the alleged loan agreement, and denied having seen it until about 2012, when he first saw it in his lawyer's office.
26 Mr Michaud said that in 2010 and 2011 he was concerned about Mr Stefanovski's personal affairs and his ability to manage his finances. He decided that the best way to repay him his $30,000 was to help him get a 'pile of his bills' and pay them as follows:
(a) he paid a sum of $6,000 and a further sum of $2,000 was paid to an institution known as First Mac, to whom Mr Stefanovski or his family owed money;
(b) he withdrew $7,500 from the Riverton Branch of the bank on 8 August 2011 and gave it to Mr Stefanovski;
(c) he gave Mr Stefanovski a plasma television as a 'payment in kind for $2,500';
(d) he paid $5,500 to the Fremantle Magistrates Court in satisfaction of Mr Stefanovski's fines;
(e) he paid $1,700, being the balance of the purchase price for a computer for Mr Stefanovski; and
(f) the 'rest whatever it was' was paid in cash when Mr Stefanovski came 'knocking … asking for money'.4
The text messages
27 The judge referred to a number of text messages between the parties almost a year after the events of November 2010. In this regard, the judge referred to texts sent by Mr Stefanovski to Mr Michaud on 19 and 22 October 2011, complaining about Mr Stefanovski's impecuniosity and asking Mr Michaud to lend him $80 to pay for his internet service. The judge found that this was a genuine request for a loan and that the request did not sit 'comfortably with [Mr Stefanovski] then holding a belief that [Mr Michaud] owed him money'.5
28 The judge also referred to a text message from Mr Stefanovski dated 24 October 2011 to Mr Michaud:6
You waited 1 yr and [I] sorted you straight out. I've waited 1 yr and you've been over east, overseas got money for bond for rental a car. I got no car live at home. Can't afford petrol. My miss would of come back if i put that $300 into my daughters account for her birthday. Because i couldn't afford it She think I'm an asshole and went with someone else. Now i'm stressed and had to borrow of a couple of friend which i can't pay back I'm stressed and can't afford smokes. I don't know. Is that fair.
29 The judge accepted that this amounted to an admission by Mr Stefanovski that he had been indebted to Mr Michaud for a year and had repaid it in a timely fashion, but noted that there was nothing in the text to indicate how much was owed and that it was actually consistent with Mr Michaud having only advanced money on account of commissions.7 His Honour also found that the text message showed that Mr Stefanovski believed that Mr Michaud had borrowed money from him and had a year to repay it but had not done so, but noted that the text message did not 'condescend to any particulars'.8
30 The judge also referred to other text messages9 and concluded his consideration of the topic by finding that:
(a) throughout October 2011, Mr Stefanovski believed that Mr Michaud owed him a lot of money 'but, to put it bluntly, he had no idea how much';10
(b) Mr Michaud did not help him out with that, which was not to his credit, and that he was playing 'cat and mouse' with Mr Stefanovski, given that he only needed to 'apprise [Mr Stefanovski] of the case that he maintained in evidence, but did he not do so';11 and
(c) the text messages of Mr Stefanovski were not consistent with the straightforward case pleaded in the statement of claim and in particular, the text messages were not consistent with the existence at the time of a written loan agreement.12
The primary judge's findings
31 The judge found, in effect, that Mr Stefanovski was not well educated, and had literacy problems; that he also had drug problems; that he was 'dysfunctional'; and that he was very reliant on friends to help him with ordinary tasks, including his finances.13
32 His Honour also said that he had 'deep reservations' about the reliability of Mr Stefanovski's evidence.14
33 In relation to Mr Michaud, his Honour was not 'convinced by much of his evidence either'.15 His Honour listed in detail a number of aspects of Mr Michaud's evidence which he considered to be unsatisfactory, and said that overall, he was not impressed with Mr Michaud's 'strategically obfuscated case or his evidence'.16 His Honour said:
I assess both [Mr Michaud and his brother] to have been insincere and very self-serving to the point of complete unreliability on all matters relating to the composition of the sum of $110,000.17
34 His Honour added that whilst mention was made of the criminal records of Mr Stefanovski and Mr Michaud, he placed no importance on their criminal histories, other than to say that neither party could lay claim to being of unblemished good character.18
35 In relation to the alleged written loan agreement, his Honour accepted the evidence of an expert witness called by Mr Michaud to the effect that Mr Michaud had not signed the document. His Honour found that it had been forged by Mr Stefanovski.19 His Honour also found that Mr Stefanovski lied about that in his evidence.20
36 The judge further found, in effect, that Mr Stefanovski was heavily in debt in 2010.21
37 In relation to the events of late November 2010, his Honour found that:
(a) the disbursement of $20,000 from the proceeds of sale of the Marangaroo property on 17 November 2010 was for the purpose of repaying the Michaud Business advances on commissions not earned;22
(b) he was not satisfied that Mr Stefanovski was otherwise indebted to Mr Michaud or the Michaud Business in the sums of $30,000 or $20,000, or in any substantial amounts, although there may occasionally have been relatively minor 'mates loans' which were not relevant to this matter and were not discussed in November 2010;23
(c) Mr Stefanovski was not indebted to Mr Michaud, or the Michaud Business, or Mr Michaud's brother, after 17 November 2010, so the $110,000 drawn by Mr Stefanovski from his account on 24 November 2010 had nothing to do with any existing loans between those parties;24
(d) in November 2010, Mr Michaud was indebted to his brother and Ms McNamara in the sum of approximately $147,000, and they (Ms McNamara and his brother) wanted repayment of their money reasonably quickly;25
(e) Mr Michaud accordingly 'needed to re-finance quickly and [Mr Stefanovski] was a ready source';26
(f) Mr Stefanovski was prepared to lend Mr Michaud $110,000 and, in effect, agreed to do so on 24 November 2010. He wanted a written agreement but 'trusted' Mr Michaud and proceeded without a signed agreement;27
(g) the sum of $10,000, included in the sum of $110,000, was part of the loan made by Mr Stefanovski and was not a gift to Mr Michaud.28
38 His Honour also found that on or about 24 November 2010, the parties had not agreed either the term of the loan or the interest payable on it. There was, however, an expectation that Mr Michaud would repay the money as soon as possible.29
39 His Honour further found that Mr Michaud had repaid $25,200 subsequently.30
40 His Honour indicated that as he had found that the agreement was not one pleaded by Mr Stefanovski in his statement of claim, he would hear the parties as to the ramifications of his findings.
Judgment in the primary action
41 It appears that following the delivery of reasons for judgment on 10 October 2014, Mr Stefanovski, presumably with leave, amended his statement of claim to plead in the alternative an oral agreement for loan. The amended statement of claim was dated 27 November 2014.31
42 On 19 December 2014, the judge made final orders to the effect that Mr Michaud was to pay to Mr Stefanovski the sum of $74,200 plus costs to be taxed.32
Amended grounds of appeal
43 Mr Michaud's grounds of appeal are to the following effect:
1. The judge erred in law and in fact in accepting that Mr Stefanovski had established a case against Mr Michaud, and in giving judgment for Mr Stefanovski, in circumstances where the judge had found that:
(a) Mr Stefanovski's evidence was unsatisfactory; his credibility was adversely affected; he had forged the document on which he had based his claim; and had given false evidence about the forgery;
(b) Mr Stefanovski's evidence concerning his request to Mr Michaud that Mr Michaud lend him $80 was false, and that the false evidence was inconsistent with Mr Stefanovski believing that Mr Michaud owed him money; and
(c) text messages sent by Mr Stefanovski to Mr Michaud were inconsistent with Mr Stefanovski's pleaded case, and were not consistent with the existence of a written loan agreement.
2. The judge erred in law in finding that there was a legally enforceable agreement for a loan, notwithstanding that his Honour had found that:
(a) the evidence at trial failed to establish that Mr Stefanovski and Mr Michaud had agreed on the term of the alleged loan;
(b) it was not until some point in time after Mr Stefanovski had provided the money that Mr Michaud formed any intention to pay money to Mr Stefanovski when it became possible for him to do so; and
(c) Mr Michaud's intention to pay money to Mr Stefanovski did not become the subject of any contractually binding agreement between Mr Michaud and Mr Stefanovski.
3. The trial gave rise to a miscarriage of justice by the failure of counsel for Mr Michaud to:
(a) adequately proof Mr Michaud's witnesses prior to trial;
(b) call Mr Michaud's witnesses in the correct order;
(c) provide particulars in respect of the alleged financial dealings between the parties and the witnesses in the case below;
(d) consider and lead all evidence relevant to the facts in issue;
(e) comply with the rule in Browne v Dunn;33
(f) properly examine and cross-examine witnesses during the trial below;
(g) fully disclose Mr Michaud's case to Mr Stefanovski prior to the close of Mr Stefanovski's case in the trial; and
(h) present Mr Michaud's defence in a manner that was not strategically obfuscated,
when such failures were capable of affecting the judge's decision to enter judgment for Mr Stefanovski.
Ground 1
44 Ground 1 is not a proper ground of appeal.
45 Insofar as ground 1 alleges that the judge erred in law by accepting Mr Stefanovski's evidence, the ground is misconceived. In Warley Pty Ltd v Adco Constructions Pty Ltd,34 McHugh JA (Hope JA agreeing) observed:
If the only question in the case is whether evidence ought to be accepted … no question of law is involved (Clark v Flanagan ((1934) 52 CLR 416 at 428); McPhee v S Bennett Ltd ((1935) 52 WN (NSW) 8 at 9); De Gioia v Darling Island Stevedoring & Lighterage Co Ltd ((1941) 42 SR (NSW) 1 at 5); Azzopardi v Tasman UEB Industries Ltd ((1985) 4 NSWLR 139 at 155 - 156)).
It is not a rule of law that a tribunal of fact must accept the evidence of one side because it is uncontradicted or superior in cogency to the evidence of the other side … If no more appeared in a case than that the tribunal of fact preferred the evidence of a witness of unsavoury reputation to the evidence of six bishops, no question of law would arise.
46 Insofar as ground 1 alleges error of fact, the ground disregards the principles applicable to appellate review.
47 In State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (in liq),35 Gaudron, Gummow and Hayne JJ referred to Devries v Australian National Railways Commission36 and said that in Devries:
Brennan, Gaudron and McHugh JJ observed:
'More than once in recent years, this court has pointed out that a finding of fact by a trial judge, based on the credibility of a witness, is not to be set aside because an appellate court thinks that the probabilities of the case are against - even strongly against - that finding of fact. If the trial judge's finding depends to any substantial degree on the credibility of the witness, the finding must stand unless it can be shown that the trial judge "has failed to use or has palpably misused his advantage" or has acted on evidence which was "inconsistent with facts incontrovertibly established by the evidence" or which was "glaringly improbable"'.
Deane and Dawson JJ pointed out in the same decision that no short exhaustive formula, such as 'glaringly improbable', meets every case. (footnotes omitted)
48 In Fox v Percy,37 Gleeson CJ, Gummow and Kirby JJ observed that Devries was one of a trilogy of cases which remain the instruction of the High Court to appellate decision-making throughout Australia. Their Honours continued:38
However, that instruction did not, and could not, derogate from the obligation of courts of appeal, in accordance with legislation such as the Supreme Court Act applicable in this case, to perform the appellate function as established by Parliament. Such courts must conduct the appeal by way of rehearing. If, making proper allowance for the advantages of the trial judge, they conclude that an error has been shown, they are authorised, and obliged, to discharge their appellate duties in accordance with the statute.
… In particular cases incontrovertible facts or uncontested testimony will demonstrate that the trial judge's conclusions are erroneous, even when they appear to be, or are stated to be, based on credibility findings.
That this is so is demonstrated in several recent decisions of this Court. In some, quite rare, cases, although the facts fall short of being 'incontrovertible', an appellate conclusion may be reached that the decision at trial is 'glaringly improbable' or 'contrary to compelling inferences' in the case.
49 The question for his Honour in this case was whether Mr Stefanovski had made a loan to Mr Michaud. There was no dispute that Mr Stefanovski had paid $110,000 at Mr Michaud's direction on 24 November 2010.
50 The question was whether Mr Stefanovski's payment, or components of it, had the character of a loan, a gift, or repayment of an existing debt owed by Mr Stefanovski to Mr Michaud or his brother.
51 The onus was on Mr Michaud to prove a loan: Heydon v Perpetual Executors Trustees & Agency Co (WA) Ltd.39
52 The judge correctly observed that:40
The assessment of credibility is a multi-factorial task. The appearance and demeanour of witnesses are relevant factors, but there is a danger in too readily drawing conclusions about truthfulness and reliability solely or mainly from such considerations. Judges are encouraged to 'limit their reliance on the appearances of witnesses and reason to their conclusion, as far as possible, on the basis of contemporary materials, objectively established facts and the apparent logic of events' (Fox v Percy …).
53 The judge found, in effect, and it is not challenged in this appeal, that there was no credible evidence that Mr Stefanovski was indebted to Mr Michaud or Mr Michaud's brother after 17 November 2010.
54 Also, Mr Michaud in this appeal does not contend that the evidence pointed objectively to Mr Stefanovski having gifted some or all of the money to Mr Michaud or his brother, or that the inference of a gift was equally open on the evidence. Such a submission, had it been made, could not, in any event, have been accepted in light of the unchallenged findings to the effect that Mr Stefanovski was already heavily in debt in 2010 and had trouble managing his finances.
55 Further, the rejection of Mr Stefanovski's evidence as to a written loan agreement could not, in itself, lead to a rejection of Mr Stefanovski's evidence that there had been an oral agreement to lend the money to Mr Michaud. Whilst Mr Stefanovski's evidence in that regard affected Mr Stefanovski's credibility, the judge plainly took that into account in assessing the communications between the parties on 24 November 2010 with a view to determining whether Mr Stefanovski had agreed to lend, and Mr Michaud had agreed to borrow, the sum of $110,000. In his assessment of the evidence, the judge took into account the deliberate falsity of Mr Stefanovski's evidence in relation to whether there was a written loan agreement and his forging of Mr Michaud's signature,41 but also, properly, had regard to the objective probabilities in all the circumstances; the fact that neither party could claim to be of unblemished character; and his assessment that Mr Michaud was himself an unsatisfactory witness whose evidence was completely unreliable in matters relating to the composition of the sum of $110,000.
56 The other two specific matters relied on in support of ground 1, namely Mr Stefanovski's belief based on his request for a loan of $80 in October 2011, and the text messages exchanged between the parties, do not assist the appellant's case. The judge found that insofar as the request for a loan reflected Mr Stefanovski's belief, it was to be seen in the context that 'within a matter of days' Mr Stefanovski texted Mr Michaud in terms indicating a belief that Mr Michaud had borrowed money from him for a year and had not repaid it.42 As to the text messages as a whole, his Honour's specific findings in that regard (referred to in [30] above), to the extent that they are relevant, support his Honour's ultimate conclusion that there was a loan but not one in terms of the written agreement as alleged in the statement of claim.
57 The judge's finding that there was an oral agreement for a loan on 24 November 2010 was plainly open. The finding of a loan was not inconsistent with the incontrovertible facts, nor was it glaringly improbable or contrary to compelling inferences. On the contrary, it was consistent with the incontrovertible facts, and it was the most plausible of all the available competing inferences. Ground 1 should be dismissed.
Ground 2
58 Ground 2 is also misconceived. As to ground 2(a), even if no term (period) for repayment had been agreed, the debt was immediately payable at the instant the loan was created: Young v Queensland Trustees Ltd.43
59 As to ground 2(b), Mr Michaud's state of mind that he would repay it as soon as possible was legally irrelevant to the question of whether he had borrowed the money: see, generally, Equuscorp Pty Ltd v Glengallan Investments Pty Ltd;44Pacific Carriers Ltd v BNP Paribas.45 As to ground 2(c), the relevant findings were to the effect that there was an oral agreement for a loan, and that the consideration was executed by Mr Stefanovski paying $110,000 at Mr Michaud's direction.46 As with ground 2(b), Mr Michaud's subjective intention as to repayment was legally irrelevant. At the hearing of the appeal, counsel for Mr Michaud appeared to contend that on the proper construction of the judge's reasons, the judge's finding that Mr Michaud 'eventually and simply intended to repay [Mr Stefanovski] as soon as possible' was inconsistent with the finding47 to the effect that Mr Stefanovski had lent Mr Michaud the sum of $110,000 on 24 November 2010.48 That submission cannot be accepted. It is plain that the judge found that there was a loan. The judge's finding to which counsel referred was merely to the effect that the period for repayment, and the rate of interest as alleged by Mr Stefanovski in the proceedings (a 12 month term at 20% per annum), had not been the subject of agreement at the time. Ground 2 should be dismissed.
Ground 3
60 Even if miscarriage of justice based on the alleged incompetence of counsel could properly be regarded as a ground of appeal in a civil matter,49 ground 3 could not succeed in the absence of evidence from Mr Michaud that his counsel had been adequately instructed to undertake the forensic tasks which are the subject of complaint in ground 3. Mr Michaud did not seek leave to adduce evidence in that regard.
61 Ground 3 should be dismissed.
1Stefanovski v Michaud [2014] WADC 141.
2 Primary reasons [29].
3 Primary reasons [112].
4 Primary reasons [67].
5 Primary reasons [70] - [71].
6 Primary reasons [72].
7 Primary reasons [73].
8 Primary reasons [74].
9 Primary reasons [76] - [81].
10 Primary reasons [84].
11 Primary reasons [84].
12 Primary reasons [85].
13 Primary reasons [95] - [96].
14 Primary reasons [97], [98], [102].
15 Primary reasons [104].
16 Primary reasons [119].
17 Primary reasons [119].
18 Primary reasons [121].
19 Primary reasons [125], [132], [149].
20 Primary reasons [149].
21 Primary reasons [97].
22 Primary reasons [153].
23 Primary reasons [154] - [155].
24 Primary reasons [158].
25 Primary reasons [13], [159].
26 Primary reasons [159].
27 Primary reasons [160].
28 Primary reasons [161].
29 Primary reasons [167].
30 Primary reasons [169].
31 BB 53.
32 At the hearing of the appeal, counsel for Mr Stefanovski accepted that there appeared to be a mathematical error in the final orders made by the judge, and that the true figure should have been $74,800 and not $74,200. Counsel for Mr Stefanovski indicated that steps would be taken to correct the error (appeal ts 17).
33Browne v Dunn (1893) 6 R 67.
34Warley Pty Ltd v Adco Constructions Pty Ltd (1988) 8 BCL 300, 310 - 311.
35State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (in liq) [1999] HCA 3; (1999) 160 ALR 588 [3].
36Devries v Australian National Railways Commission [1993] HCA 78; (1993) 177 CLR 472, 479.
37Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 [27].
38Fox [27] - [29].
39Heydon v Perpetual Executors Trustees & Agency Co (WA) Ltd (1930) 45 CLR 111.
40 Primary reasons [88].
41 Primary reasons [162].
42 Primary reasons [71], [72], [74].
43Young v Queensland Trustees Ltd [1956] HCA 51; (1956) 99 CLR 560, 566 - 568.
44Equuscorp Pty Ltd v Glengallan Investments Pty Ltd [2004] HCA 55; (2004) 218 CLR 471 [34].
45Pacific Carriers Ltd v BNP Paribas [2004] HCA 35; (2004) 218 CLR 451 [22].
46 Primary reasons [160] - [161].
47 Primary reasons [167].
48 Appeal ts 8 - 14.
49 cf Jazairy v Najjar (1998) 27 MVR 498, 508; Varmedja v Varmedja [2008] NSWCA 177 [102].
4
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