Nadarajapillai v Naderasa

[2015] NSWCA 109

Court of Appeal
Supreme Court

New South Wales

Case Name:	Nadarajapillai v Naderasa
Medium Neutral Citation:	[2015] NSWCA 109
Hearing Date(s):	30 March 2015
Date of Orders:	27 April 2015
Decision Date:	27 April 2015
Before:	McColl JA at [1];  Macfarlan JA at [2]; Emmett JA at [3]
Decision:	Appeal dismissed with costs.
Catchwords:	CONTRACTS – loan agreement – term of agreement provided that creditor must give 90 days’ notice to debtor before requiring repayment – whether such notice had been given PROCEDURE – pleadings – whether material facts alleged supported cause of action pleaded – compliance with Uniform Civil Procedure Rules 2005 (NSW), rr 6.12(6) and 6.12(7) PROCEDURE – judgments and orders – whether primary judge made necessary findings of fact – whether primary judge gave adequate reasons for decision
Legislation Cited:	Uniform Civil Procedure Rules 2005 (NSW), r 6.12
Category:	Principal judgment
Parties:	Pirpakaran Nadarajapillai (Appellant) Ravindran Naderasa (Respondent)
Representation:	Counsel: J Patel (solicitor) (Appellant) B Loukas (Respondent) Solicitors: Jagdish Patel (Appellant) Mark Campbell & Company (Respondent)
File Number(s):	2014/137518
Publication Restriction:	Nil
Decision under appeal:
Court or Tribunal:	District Court of New South Wales
Date of Decision:	10 April 2014
Before:	Kearns DCJ
File Number(s):	2013/28630

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

JUDGMENT

1. McCOLL JA: I agree with Emmett JA.

2. MACFARLAN JA: I agree with Emmett JA.

3. EMMETT JA: By notice of appeal filed on 23 June 2014 (the Notice of Appeal), the appellant, Mr Pirapakaran Nadarajapillai (the Borrower) appeals from orders made by the District Court on 10 April 2014. On that day, for reasons given by the primary judge ex tempore, judgment was entered for the respondent, Mr Ravindran Naderasa (the Lender), in the sum of $128,471.72 and the Borrower was ordered to pay the Lender’s costs of the proceedings.

4. In order to put the appeal into context, it is necessary to say something about the proceedings in the District Court. The proceedings were commenced by statement of claim filed on 30 January 2013 (the Statement of Claim). The relevant allegations in the Statement of Claim may be summarised as follows:

• Pursuant to an oral agreement, the Lender lent to the Borrower the sum of $50,000 in April 2011 and a further sum of $35,000 in December 2011;

• It was a term of the agreement that the Borrower was to repay the principal by regular monthly instalments and pay interest at the rate of 3.5 per cent per month on the balance outstanding and that the Borrower was to provide security for the loans, by giving to the Lender post-dated personal cheques;

• Between June 2011 and September 2012, the Borrower made a number of payments amounting to $42,742.32, leaving an outstanding balance of $84,102.99 as at 15 October 2012, being the latest date on which the Lender demanded the total repayment of the loans;

• The Borrower is in default and breach of the agreement in that he has failed to pay instalments for November and December 2011, August 2012 and since October 2012, and has ignored the Lender’s demands for repayment;

• In October 2012, the Lender presented eight of the Borrower’s post-dated cheques totalling $47,719.50, all of which were dishonoured.

  In the Statement of Claim, the Lender claimed the sum of $93,246.49, together with interest and costs. In the alternative, the Lender claimed payment of the dishonoured cheques plus dishonour fees, costs and interest.

1. It is fair to say that the statement of claim is not free from criticism. For example, it claimed damages and not debt and it mistakenly asserted that the Lender, rather than the Borrower, was to repay the principal and to pay interest. In addition, it claimed “quantum meruit” in the alternative, without explaining the nature of any such claim.

2. The Borrower filed a defence on 1 May 2013 (the Defence). Relevant admissions and assertions made in the Defence may be summarised as follows:

• The Borrower and the Lender entered into a partly written and partly oral agreement;

• On or about June 2011, the Borrower borrowed $50,000 from the Lender and, as at July 2011, had a further outstanding borrowing of $35,000 from the Lender;

• The parties agreed to consolidate the borrowings in or about early January 2012;

• The agreement provided for monthly repayments, and, upon consolidation of the borrowings, a 3.5 per cent per month interest rate applied;

• The Borrower provided post-dated personal cheques to the Lender as security for the $50,000 borrowing;

• Prior to October 2012, the Borrower had made a number of monthly payments totalling $42,737.95;

• As at 15 October 2012, the outstanding balance on the total borrowings was $82,353.67;

• The Lender demanded repayment of the total borrowing in October 2012;

• It was a term of the agreement that, in case the Lender required part of the money borrowed, he would have to give 90 days’ notice;

• At no time prior to October 2012 did the Lender notify the Borrower that he required all or part of the money borrowed to be paid back;

• By presenting cheques totalling $47,719.50 all at once, the Lender breached the agreement.

Proceedings before the primary judge and the primary judgment

1. At the commencement of the hearing before the primary judge, counsel for the Lender provided an aide-mémoire to his Honour, setting out matters admitted by the Borrower in the Defence. Counsel for the Borrower raised no objection to the aide-mémoire. After ruling on objections to the affidavit evidence, the primary judge was informed that neither party wished to cross-examine the other. Both parties then addressed his Honour.

2. Counsel for the Borrower referred to a statement of facts and issues filed on behalf of the Borrower (the Borrower’s Issues). The Borrower’s Issues set out the essential facts admitted by the Borrower, which corresponded closely to the admissions set out in the aide-mémoire. The Borrower’s Issues then stated that the issues were as follows:

• Was 90 days or three months’ notice given by the Lender?

• Could the Lender deposit the cheques without 90 days or three months’ notice and, in particular, could the Lender deposit all the cheques at once or deal with the security without 90 days’ notice?

• Could the Lender seek full repayment without 90 days’ or three months’ notice?

• What is the effect of the non-service of the notice?

1. In his reasons, the primary judge said that he was dealing with the claim on the basis that the Lender accepted the Borrower’s assertion that the amount owing as at October 2012 was $82,353.67 and that nothing had been paid since then. His Honour said that the Borrower’s defence was that it was a term of the agreement that the Lender was to give to the Borrower 90 days’ notice if he required repayment of the money that he had lent and that the Borrower was in breach of that term by not having given 90 days’ notice.

2. The primary judge then referred to a letter sent by the Lender’s solicitors to the Borrower on 15 October 2012 demanding the repayment of $84,102.99, comprising the principal owing and interest calculated to 22 October 2012. His Honour concluded that, despite the fact that the demand did not specifically refer to giving the Borrower 90 days in which to pay, the letter constituted sufficient compliance with the contractual obligation to give the Borrower 90 days after the demand to make the payment. His Honour observed that the proceedings were commenced on 30 January 2013, well enough after 90 days had expired from the date of the solicitor’s letter.

3. The primary judge also referred to a submission made by the Borrower that the Lender was in breach of the agreement by presenting a number of the post-dated cheques and, by doing so, had abandoned the agreement and could not rely on it. His Honour concluded that the Lender was entitled to present the cheques when their dates accrued and that the presentation was not a breach of the agreement. In any event, his Honour held that it would not have been such a breach as would have disentitled the Lender from relying on the agreement. His Honour also referred to a submission on behalf of the Borrower that the Lender was not entitled to interest because of that alleged breach of the agreement. His Honour did not consider that he needed to add anything further in relation to that submission.

4. The primary judge was therefore satisfied that the Lender was entitled to rely on the agreement and that the 90 days’ notice required by it had been given to the Borrower. His Honour concluded that, since the Borrower had not repaid the moneys lent, as required by the agreement, the Lender was entitled to a verdict.

5. The primary judge also referred to a dispute as to whether interest at the rate of 3.5 per cent per month was simple interest or compound interest. His Honour was not prepared to allow interest to be calculated as compound interest, but instead allowed it to be calculated as simple interest.

6. The primary judge was informed that, from 15 November 2012 until a date in “mid-March 2014”, the amount of interest amounted to $46,118.05, which, when added to the principal, yielded a total of $128,471.72. Accordingly, his Honour entered a verdict and judgment for the Lender in that amount.

The appeal

1. When the appeal was called on for hearing, the solicitor for the Borrower sought leave to rely on amended grounds of appeal in substitution for the grounds in the Notice of Appeal. While no satisfactory explanation was proffered for the lateness of the application, leave was granted over the objection of counsel for the Lender.

2. The amended grounds may be summarised as follows:

• The Borrower was denied natural justice and the decision was not reached in accordance with due process and in accordance with the prescribed jurisdiction of the District Court;

• The primary judge erred in failing to decide and adjudicate on all issues of fact and law arising from the Lender’s pleadings, in that the Lender claimed competing relief and the primary judge failed to make necessary findings in respect of the competing relief claimed;

• The primary judge erred in failing to make the necessary findings of fact with respect to the precise nature and terms of the agreement, the purpose of the advances, when the advances were made, what period was stipulated for repayment of the advances, what interest would be payable, and how the principal and interest would be paid;

• The primary judge did not make any finding with respect to oral conversations or the contents of any written document relied on by the Lender as constituting the agreement or how the written part of the agreement could be married to the oral part of the agreement;

• The primary judge erred in reaching his ultimate finding without identifying the precise content of the terms of the agreement, in accepting statements made in argument as evidence and proof without analysing the evidence given by the Lender and without assessing the evidence and determining whether the burden of proof had been discharged;

• The primary judge erred in findings of fact and law relating to the terms of the alleged security, what the precise terms of the security were, and on what conditions and in what circumstances the security would become enforceable;

• The primary judge erred in failing to give adequate reasons to support his ultimate decision and verdict.

1. The amended grounds particularised the complaint that the Borrower was denied natural justice and procedural fairness by making the following assertions:

• The pleadings filed by the Lender were defective in that the material facts alleged did not support the causes of action pleaded; they are set out in vague, broad, general and ambiguous terms; and they fail to provide the essential and relevant information concerning the allegations;

• The pleadings were not amended and were not used or utilised to ascertain and determine the issues of fact and law that were raised;

• The process by which the proceedings were heard and determined was not in conformity with the appropriate due process applicable for the exercise of the District Court’s jurisdiction;

• The parties tendered affidavit evidence that was not challenged or subjected to cross-examination and no oral evidence was called to correct errors contained in the evidence;

• The affidavit evidence of the Lender merely repeated the allegations in general terms and simply referred to the contents of emails received from the Borrower without giving evidence of the full and proper context;

• The Lender’s affidavit contained contradictory and conflicting statements that could not be reconciled and the affidavit evidence did not contain evidence of the material facts of the allegations made in the pleadings;

• The primary judge did not make any reference to the evidence and did not weigh and assess the evidence to ascertain whether the plaintiff had discharged his burden of proof;

• The Borrower, not having challenged the statements in the affidavit evidence of the Lender by cross-examination, was deemed to have accepted the truth of the statements and thus could not tender evidence that supported a contradictory assertion made by the Lender, yet the Borrower’s evidence was admitted without any objection by the Lender;

• The affidavit evidence was passed over as not having much bearing on the determination of the issues raised in the pleadings and the matter was decided on the basis of exchanges that took place at the hearing between counsel for the parties and the primary judge;

• The representation provided by counsel for the Borrower before the primary judge fell below the standards of diligence and competence to which he was entitled and which he legitimately expected, and counsel did not render appropriate aid and assistance to the District Court in adjudication of the matter in accordance with law and due process; consequently, the Borrower was prejudiced and disadvantaged.

1. In the course of oral argument, the solicitor for the Borrower also relied on an asserted failure of the Statement of Claim to comply with the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) in relation to the claim for interest made in it. Although not mentioned by the Borrower’s solicitor, it is likely that he was referring to rr 6.12(6) and 6.12(7) of the UCPR, which provide that an order for interest up to judgment must be specifically claimed and that, in the case of a liquidated claim, a claim for an order for interest up to judgment must specify the period for which interest is claimed and may specify the rate or rates at which interest is claimed.

2. It is apparent that, apart from the basis on which interest was to be calculated, in respect of which the Borrower was successful, the only issue before the primary judge was whether the Lender was entitled to repayment of the loans prior to giving either 90 days’ or three months’ notice that repayment was required. While, in the Statement of Claim, the Lender also sued on the cheques, it is clear enough that that claim was not pressed before the primary judge, in circumstances where the Borrower admitted that the loans had been made, admitted that an amount of $82,353.67 was owing in respect of the loans, admitted that interest at the rate of 3.5 per cent per month was payable on the outstanding loans, and admitted that demand for repayment had been made in October.

3. Quite clearly, demand had been made more than 90 days before the commencement of the proceedings. It must follow, therefore, that, as at the date of commencement of the proceedings, the principal of the loans was due and owing and there was no reason why the Lender was not entitled to sue for recovery of the principal, together with contractual interest up to the date of judgment.

4. No written submissions were provided in support of the amended grounds and the oral submissions made on behalf of the Borrower before this Court were quite incomprehensible. More significantly, no attempt was made before this Court by the solicitor for the Borrower to grapple with the fact that, before the primary judge, counsel for the Borrower had indicated that the only issue for determination was that 90 days’ notice had not been given and that the consequence was that the Lender was not entitled to repayment of the loans. The grounds of appeal do not complain about the determination of that question by the primary judge. Rather, they raise questions that were simply not in issue before the primary judge and about which no complaint was made to the primary judge.

5. The complaint now made about the representation of the Borrower before the primary judge is entirely without substance. Indeed, one might compliment the Borrower’s legal representatives for having narrowed the issues in the way that they did. That is not a comment that could be made about the representation of the Borrower before this Court. There is absolutely no substance in any of the amended grounds relied on by the Borrower, all of which are quite unarguable.

6. The appeal is entirely without merit. The appeal must be dismissed with costs.

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Amendments

05 June 2015 - [22]: "Lender" changed to "Borrower" in the last sentence.