Parke v Kasuba

[2013] QDC 45

[2013] QDC 45

DISTRICT COURT

JUDGE ROBIN QC

CIVIL JURISDICTION

No 1277 of 2010

ESTELLE MARION PARKE

and

DALE RICHARD PARKE

First Plaintiff

Second Plaintiff

and

MICHAEL KASUBA

Defendant

BRISBANE

..DATE 14/02/2013

JUDGMENT

CATCHWORDS

Trial of claim for repayment of alleged $50,000 loan made in cash- alleged transaction, handing over of money and plaintiffs’ ability to provide it denied - defendant contended his signatures (apparently his) on documents describing the transaction were forgeries  - certain cheques signed by him found to be payments of interest - judgment for the plaintiffs

HIS HONOUR:  This is a claim by Mr and Mrs Parke for repayment
of a loan of $50,000 said to have been made to the defendant
in September 2008 which was to carry interest at the rate of
10 per cent per annum.

The statement of claim pleads that the defendant signed a
statutory declaration under the Oaths Act setting out the
terms of the oral contract of the 6th of September some 10
days later on the 16th of September 2008.  That statutory
declaration, as it was called, became Exhibit 5.  I doubt it
has the status of a statutory declaration under the Act.
The witness was a fellow taxi driver of Mr Parke with no
standing as a Justice of the Peace, Commissioner for
Declarations or the like.

The defendant, Mr Kasuba, is representing himself, being
without the means, as he tells the court, to engage lawyers,
although he has had some assistance from QPILCH.  The defence
denies that there was any contract made by him to borrow
$50,000 as alleged or otherwise and asserts that he never
obtained the benefit of any loan as alleged or otherwise.

As to the statutory declaration, the defence denied that the
defendant ever signed it.  He pleads that he never later
signed any documents other than a letter to the court referred
to in the pleading.  That was apparently a letter offering
employment to Mr Parke's son who was facing charges and hoping
to obtain release on bail before they came up for
determination.  Paragraph 3(a) of the defence says:  "The
defendant does not know who signed the statutory declaration
and says that his purported signature thereon is a forgery."

Mr Parke agrees that around the relevant time he approached Mr
Kasuba for assistance in trying to get bail for his son.
Indeed, the reply contains an admission that the defendant was
asked to provide money if bail was ever granted.  On
Mr Parke's evidence, which I accept in this respect, bail
never was granted and no figure for bail was ever mentioned.
Mr Parke also, I think, accepted that Mr Kasuba was approached
to provide security for bail should that be required.

Mr Kasuba relies on those discussions as evidence supporting
his denial of the alleged loan.  It's said to be evidence
indicating that the plaintiffs were without means around this
time, that - far from the plaintiffs lending $50,000 or any other sum to him as alleged - it was the case of the platinffs wanting funds from him for the purpose indicated.

In this respect again I accept Mr Parke's evidence to the
effect that he was a co-accused with his son with the
consequence that it was necessary to turn to some independent
source for financial or like support of any bail arrangement
that eventuated.

Mr Kasuba in his argument to the court, which I think covered

just about everything that he could have said, asks

rhetorically how it's possible for him to prove that something

didn't happen - i.e. the loan - when Mr and Mrs Parke say that

it did.  It seemed to me he vacillated somewhat between

swearing unequivocally that it didn't happen and tentatively

swearing that he didn't recall it.

In support of his contention already alluded to that the

Parkes did not have $50,000 or any such amount available to

lend him, he relies on bank statements of Mrs Parke's which

indicate that funds in the bank had reduced to such an extent

that $50,000 could not possibly be found.  In particular, he

drew attention to a sum of $38,609.70 as the balance on 20th

of April 2007 some 17 months or so before the alleged loan.

An advance from the bank of $100,000 to Mrs Parke made earlier

in that month was reduced by the 20th to $38,500 or so.  The

suggestion was that the situation could only have got worse

between April 2007 and September 2008.

Once again, the plaintiffs have an explanation.  The Parkes'

home is held by Mrs Parke in her name.  She had mortgaged it

to the Commonwealth Bank some time in the past to secure

indebtedness which she placed at around $14,000.

Difficulties with the law were being faced by her husband at

this time as well as by the young man which led her to arrange

additional funds from the bank to clear certain debts of

Mr Parke's which she thought ought to be done before, as she

feared, he was sent to gaol.  Funds would also be required for

lawyers engaged to look after his interests.  The court heard

from Mr Parke that eventually he did indeed serve a term of

imprisonment.

Mrs Parke, whose evidence I accept, said that the $100,000,
which apparently could not be repaid to the Bank earlier than after  four years without attracting financial penalties, was taken by her from the bank in fairly large withdrawals to be applied if needed and, to the extent not needed, kept at home.

Mr Kasuba's attitude was that no-one would keep such large

amounts in a home and indeed part of his argument was that the

absence of any record of large amounts coming into bank

accounts of his at relevant times corroborates his denial of

any loan.  He says he certainly wouldn't have kept an amount

of that dimension in his house.

The plaintiffs, it seems, had second thoughts about keeping a

very large amount of cash at their place instead of placing it

somewhere safe.  On Mrs Parke's evidence, which I've

accepted, the cash she had was wrapped up and placed in a safe

deposit facility at a branch of the Commonwealth Bank where it

was stored for some time before September 2008.  She had no documents at court to corroborate this feature of her evidence.

The evidence invites a conclusion that Mr Parke may have been

engaged in dealing in drugs or the like and amassed funds in

that way.  Mr Kasuba may have been hoping that the court would

characterise any loan to him, if it found that one had beenmade, as involving tainted money, the recovery of which the court should not assist.  The evidence doesn't admit of any findings in that regard.  I'm not persuaded, in any event,

that even if - which I certainly do not determine - part of

the $50,000, which I'm satisfied the plaintiffs together had,

constituted property that the State may have been able to

forfeit under proceeds of crime legislation that there's any relevance in that.  The State authorities made no such application.

The explanation for the advance of moneys given by the

plaintiffs is that Mr Kasuba approached them, by Mr Parke in

particular but on occasions when Mrs Parke was there too, to

provide moneys for a project at Jundah in western Queensland

where a self-contained community, it was hoped, could be

established on a site there.  This venture was being promoted

by a company called Space City Properties Pty Ltd of which

Mr Kasuba was sole director.  It was the idea to provide safe

accommodation for people suffering from various kinds of

disadvantage, so that government subsidies might be invited.

Mr Brown, perhaps somewhat imaginatively, suggested to the

court that Mr Kasuba was running a Ponzi scheme, meaning one

in which investors are induced to participate by the offer of

quick and high returns, perhaps with the promoter hoping that those returns

can be funded from investments by new participants ad

infinitum.  Ponzi schemes always collapse.  Mr Brown suggests

that this one appears to have done that as well.

I'm satisfied that the Parkes did receive the promised return

for several months.  According to Mrs Parke, who held the

purse strings in the household, when the proposal to invest

was first made and her husband talked her into it, she, on

being asked what interest she would require to cover what she

had to pay to her own lender, suggested eight per cent.  Her

husband came back with the wonderful news that Mr Kasuba

insisted on paying 10 per cent.  The amount to be invested was

$50,000.

I accept that when the funds kept in safe custody in the Bank

were accessed and counted there were a few thousand dollars

over.  When Mr Parke talked of getting the funds out of the

safe I think he must have been referring to the Bank's safe,

as Mrs Parke said there was no safe in the house.

There are divergences between their stories in matters of

detail which, in some contexts, could be important: if, for

example, this were a criminal trial with the criminal standard

of proof applying.  This court applies the civil standard, requiring proof, not beyond reasonable doubt, but on the balance of probabilities.

The money was all in cash, Mr Parke said he thought mostly in

hundred dollar bills.  Mrs Parke thought that $50 bills might

have predominated.  On her version, the handing over of the

money was to occur in exchange for Mr Kasuba signing Exhibit 5

which I think she contemplated would occur in the presence of a witness who would, of necessity, also see the handing over of the money, this was to happen at a Caltex service station on
Kingston Road where handovers of taxi vehicles in Mr Kasuba’s
fleet happened.

Mr Parke says that handover of money occurred on an earlier

occasion - namely, the 4th of September in Barry Parade in Fortitude Valley when Mr Kasuba met him and entered the taxi - which was his taxi - for the purpose.  Whereas the Parkes counted the money to satisfy themselves that the right amount was handed over, on their version, it's not suggested that Mr Kasuba counted it.

On the 4th of September, Mr Parke says he obtained from

Mr Kasuba a signed receipt written on a short strip from the

roll which was used in the taxi in association with the EFTPOS

machine.  That document reads "4-9.08 received from R&E Parke

$50,000 fifty thousand dollars details 5.9.08" followed by

Mr Parkes' signature, then what appears to be Mr Kasuba's

signature.

According to the latter, the notion that there might be money owing by him to one or other of the Parkes only surfaced about a year later when he says Mr Parke's engagement as one of his drivers was brought to an end - not by him but by a manageress
- on suspicion that he was using the taxi for dealing in drugs.  In a statement from the Bar table, rather than while he was giving evidence from the witness box Mr Kasuba said that stories that other people owed Mr Parke money were surfacing in a similar way at that time.

In my opinion, Mr Kasuba is taking too much from the differences between Mr and Mrs Parke. She doesn't purport to have been there when the money was handed over.

It's a curiosity that while the document in the form of a

statutory declaration was referred to in pleadings, the

receipt is not.

Mr Kasuba agrees that the former at least appears to bear his

signature, although he vacillated, as I think I've indicated,

between denying that it was and saying he didn't recall

placing it there and asking rhetorically why would he place it

there if the transaction hadn't happened.  I think that the

signatures are his on the basis of such comparisons as the

court can make with signatures that he accepts are genuine, as

in the case of a cheque Exhibit 9 and as one may presume to be

the case in respect of his Defence filed in the court.

The cheque is interesting.  It's dated the 16th of September
2009.  The plaintiffs have it because it was dishonoured.  I
understood Mr Kasuba to say he stopped payment on it.  The
amount of the cheque which is made out to Mrs Parke is
$416.65.  That, I find, was a monthly payment of 10 per cent
interest per annum on the principle of $50,000.  The amount is
exact to the nearest multiple of 5 cents.

It appears that the notion of paying interest monthly was
settled upon, notwithstanding that the statutory declaration
drafted by Mrs Parke, but not signed by her, contains an
agreement "to pay interest on the money in the amount of
10 per cent with interest paid annually".  The document
indicates that the amount was to "be retained by me for a
minimum of one year renewable on 6th September annually".
Thereafter the principal was repayable if the plaintiffs
required that on one month's notice in writing.  Such notice was duly given.

Mr Kasuba has his own explanation of the cheque which was the
last of a series, all of the same amount.  The Commonwealth Bank statements, Exhibit8, show credits of $416.65 on 11 February 2009, 4 March 2009,11 August 2009 and 24 September 2009, the last one being reversed.  I may have missed some, but there appear to bethose four only.  Once again I accept Mrs Parke's evidencethat cheques in that amount came in every month, some being banked in the Commonwealth Bank account for which the court has statements, others being banked in another account she had with the Heritage Building Society.

In context one would be comfortably satisfied that those
payments made from an account of All Small Business
Bookkeeping and Management Services, authenticated by the
signature of Mr Kasuba, represented monthly payments of
interest at 10 per cent on $50,000.  Mr Kasuba indicates that
he made those payments to Mr Parke for mechanical work, for
which Mr Parke's evidence shows he had qualifications, carried out on Mr Kasuba's vehicles.  He says he would pay for parts and pay for amounts invoiced monthly for labour by Mr Parke.

It defies belief that the amounts would be identical from
month to month.  The supposed invoices were not disclosed and
never appeared.  Worse, the mechanical work explanation for
the cheques was not put to Mr Parke so that he could comment
on it, nor I think was it put to Mrs Parke.  I did what I
could at the beginning of the trial to indicate to Mr Kasuba
that he ought to be careful where he challenged the
plaintiffs' witnesses' evidence or case  to do so while they had a chanceto respond.

He says he cancelled the last cheque because the work had not been done and/or because Mr Parke had been dismissed from his
engagement as a driver.  He says he surmises that the claim
which was got off the ground by a letter of demand from a firm of solicitors called Mitchells, who were out of it by the time
proceedings started, has something to do with Mr Parke's
resentment at losing his position and perhaps an incorrect
belief that Mr Kasuba was very wealthy.

I reject the explanation given by Mr Kasuba of the cheques
bearing his signature.  It's a matter of speculation why
payments stopped.  It may have been because Mr Parke's legal
difficulties gave Mr Kasuba the idea that he would not be well
placed to pursue any claim, or it may be, as Mr Brown
speculated, that the suggested Ponzi scheme faltered.  It
doesn't really matter.  I ought to have observed in relation
to the cheques the feature that they were made out to
Mrs Parke, which seems odd if the consideration for them was
services of Mr Parke.  Mr Kasuba says he was asked to do it
that way.  It's sad that Mr Parke wasn't given the opportunity
to respond to such a suggestion in the witness-box.

Although the case on first acquaintance struck me as
presenting a very difficult scenario which the court would be
forced to make a possibly difficult decision between different
bodies of oral evidence, in the end such documents as there
are, which I think are all genuine, provide strong
corroboration for the claim.

It appears to me that the plaintiffs ought to have judgment
for $50,000 and interest which I would calculate to date as
$17,500 for practical purposes, applying a rate of 10 per cent.

I'll ask Mr Brown for submissions about interest.  I'm
concerned that the claim actually seeks interest under the
Supreme Court Act from 6 September 2008. I'm not sure what
the rate has been under the Supreme Court Act.

MR BROWN:  I think it's 10 per cent, your Honour.  That was my
understanding.

HIS HONOUR:  Well, I think at times it might have been more
than 10 per cent.  I wouldn't be inclined to award more than
10 per cent, but if the rate is less than 10 per cent I'm not
sure whether I should give you 10 per cent.

Something that I haven't said is that the witness in the
statutory declaration hasn't been called by either side.  I
think it's likely Mr Kasuba could get hold of him if he wanted
to but Mr Kasuba told the court, for what it's worth, that
Mitchells tried to get that gentleman to sign a statutory
declaration for them and he declined to provide it.  Mr Kasuba
asserts that he said that he, i.e. the supposed witness, doesn't recall signing the document.  Maybe, if what's said about Mitchells is right he simply didn't want to get involved.  It’s not suggested that he was there as a witness to the handover of $50,000, even though that's what Mrs Parke apparently envisaged had
happened, or should happen.

I give judgment for the plaintiffs against the defendant for
$67,500 of which $17,500 is interest.  There may be an issue about the scale of costs given the amount of the claim.

HIS HONOUR:  Well, I'll say with costs to be assessed if not
agreed and you can just see what happens.

MR BROWN:  Yes, your Honour.  Thank you.

HIS HONOUR:  Let’s see if you have any difficulty with the assessing people.

MR BROWN:  Thank you.