Satisfac Credit Union v Jeffery G Johns No. 4251 Judgment No. SCGRG 93/843 Number of Pages 4 Money Counts

[1993] SASC 4251

COURT IN THE SUPREME COURT OF SOUTH AUSTRALIA MOHR J

CWDS
Money counts - Repayment of money and interest on overdraft facility - appellant was a credit union - respondent sought an overdraft facility from the appellant - Account overdrawn - amounts stated to be loan interest were added to debit balance - no agreement as to rate of interest - dispute as to respondent's indebtedness - basis of claim not proved - amount of claim not proved - conditions of contract not proved.

HRNG ADELAIDE, 22 October 1993 #DATE 12:11:1993
Counsel for appellant:     Mr S.M. Adams
Solicitors for appellant:    Adams Kandelaars
Counsel for respondent:     Mr C McCarthy
Solicitors for respondent: Wadlow

ORDER
Appeal dismissed.

JUDGE1 MOHR J The appellant in this matter is a credit union. It has members. On 5th December 1985 the respondent applied to become a member. He was admitted to membership. On the 13th December 1985 he applied for what the appellant describes as a "Visa Link Savings Account". This account provides overdraft facilities. He sought an overdraft facility of $5,000. According to the application form he was to pay to the appellant the sum of $20.00 minimum or 5 per cent of the balance (i.e. the amount borrowed) each month on the "statement date". On the original application form in addition to the printed undertaking to repay on the above terms the sum of $250.00 is mentioned. On the application form there appears a "Members declaration and acceptance" in the following terms:-
    "I hereby apply for a Visa Card and S4 Visa Link Savings
    Account. I declare that the information stated within the
    application is true and correct in every particular and I
    acknowledge that subject to acceptance my S4 Visa Link Savings
    Account will be debited with a monthly service fee of $2.00 or
    such fee as the Board of Satisfac Credit Union may determine
    from time to time. I acknowledge that I have read and agree to
    accept the Australian Credit Union Visa Card Conditions of Use
    (attached) a copy of which I understand will also accompany
    approval of my application. Loan Protection Insurance
    Certificate: I hereby certify that I am physically able to
    perform or will be able to resume within a reasonable time the
    usual duties of my livelihood." 2. On the 18th April 1986 the respondent applied for and was granted an increase to his overdraft facility from $5000.00 to $10,000.00. 3. The "Conditions of Use" were not attached to the copy documents setting out the above conditions but counsel intimated that such condition had no relevance to the matters which came to be in dispute. 4. From the statements of account tendered at the hearing in the Magistrates Court, to which I will refer in more detail in due course, it appears that by June 1986 the respondent had reached or virtually reached his limit. From time to time amounts stated to be loan interest had been added to the debit balance. There have of course been numerous withdrawals from and some payments to the overdrawn account. By 15 August 1986 the amount of the overdraft was $10,551.52. After that date there were no further withdrawals but one deposit of $300.00 was made and another of $400.00 on 27th October 1986. Interest continued to be debited. From then on there were no withdrawals or deposits but interest continued to be debited. 5. Despite the fact that interest continued to be debited there was, it appears, no agreement entered into as to rate of interest, which according to the evidence given on behalf of the appellant varied from time to time. 6. The appellant eventually on 1st July 1992 issued a summons claiming "$11,447.71 together with interest continuing to accrue at the rate of 21.9 per cent per annum". I pause here to remark that the appellant from what I can gleam from the Statements of Account, debited interest monthly on a compounding basis - that is to say interest was charged on interest debited. 7. When the matter came on for hearing the appellant applied to amend the amount claimed from $11,447.31 to $13,075.34. Neither sum can be ascertained from perusal of the accounts. What appears to have happened is that on 11th November 1991 the debit balance was $26,107.71 and on that date the respondent paid in $18,000, leaving a balance of $8,107.71. Interest continued to be debited. The respondent it appears from correspondence had a serious motor accident and at one time was said to be suffering from cancer. 8. The respondent filed a defence. He denied that he had had particulars of how the sum of $11,447.71 was made up and denied his liability for $11,447.71 plus accruing interest. I might mention at this stage that the Learned Special Magistrate refused the application for amendment due to the lateness of the application. In the end result nothing turned on that. The respondent admitted that in late 1988 or early 1989 he was indebted in the sum of $16,856.80. He pleaded accord and satisfaction by the payment of the $18,000.00 referred to above. In making this allegation the respondent alleged that because he was in default due to his injuries the appellant sent a representative to his home. He named a Mr Drallini. It subsequently appeared that this was the wrong name. The respondent's explanation was that this was the name given to him sometime later when he rang the appellant to enquire as to the name. 9. To return to the main story. The respondent said that at that meeting the figure of $16,856.80 was mentioned. He undertook to give an authority to pay his indebtedness from the proceeds of his claim for damages. This was subsequently given and mentioned no amount. However when he finally received his damages he decided to pay the $16,856.80 plus an "ex gratia" amount due to delays and hence forwarded the cheque for $18,000.00 and in the letter forwarding it stated it was in full satisfaction of his indebtedness. The appellant accepted the cheque but not in full satisfaction. It continued to charge interest, apparently at penalty rates and eventually made its claim as set out above. 10. Mr McCarthy who appeared as counsel for the respondent took as his first point that the appellant had never made out its basic claim in the sense that its quantum had never been proved. 11. Quite voluminous records concerning the respondent's dealings with the appellant in the nature of copies of statements and computer print-outs were tendered but nowhere in these can be found the figure of $11,477.71 and the appellant when applying to amend, stated, as did counsel for the appellant before me, that it was wrong. The figure said to be inserted in lieu thereof was $13,075.34. that figure cannot be found in the records. Furthermore Mr McCarthy pointed out that the terms of the original contract, if I can call it such, are unknown in the sense that they were never proved. In particular the rates of interest and how they were to be debited, whether annually, monthly or weekly and whether interest was to be compounded interest or simple interest was never proved. The figure of $16,856.80 referred to by the appellant as being supplied to him when the officer of the appellant came to his home, had never been proved to be due at that time, although accepted by the respondent at the time and which formed the basis of his subsequent payment of $18,000.00 For myself I would have expected that before agreeing to lend a sum of $10,000.00 the appellant would have spelt out the terms and in particular the rates of interest and how interest was to be calculated from time to time. Moreover there would have been some acknowledgment of the terms obtained from the borrower. No evidence of any of these was forthcoming. In the result I agree with Mr McCarthy that the appellant never proved the amount of the claim with any precision. This was not like a claim for damages where a court must do the best it can with the material before it. It was a money claim and as such called for precise proof and furthermore proof of an agreement to be bound by the manner of calculation and in particular the rates of interest etc. This the appellant failed to do, as the Learned Special Magistrate found. 12. His Honour went on to consider other questions and in particular the "accord and satisfaction" alleged by the respondent. He discussed the evidence given and, I add, the evidence not given and found in favour of the respondent although having reservations about some of his evidence. I found it unnecessary to canvass all the points made in his Honour's consideration of this topic. Suffice to say I would not interfere with his analyses of the evidence nor with his finding, as I understand it, that it had been proved. 13. The case was, as I read the evidence, unsatisfactory from the start, particularly as the appellant failed to prove the very basis of its claim other than the fact that the respondent had borrowed a sum of money and that some interest would of necessity be charged. 14. In the result the appellant's claim was dismissed. I dismiss the appeal against that dismissal.