Schebella v Schebella - [2025] QDC 16

DISTRICT COURT OF QUEENSLAND

CITATION:

Schebella v Schebella & Anor [2025] QDC 16

PARTIES:

KEVIN CHARLES SCHEBELLA

(Plaintiff)

v

MARK ANDREW SCHEBELLA
(First Defendant)

and

KAREN JANE SCHEBELLA
(Second Defendant)

FILE NO/S:

121/2019

DIVISION:

Civil

PROCEEDING:

Civil Claim

ORIGINATING COURT:

District Court of Queensland

DELIVERED ON:

28 February 2025

DELIVERED AT:

Maroochydore

HEARING DATE:

20 and 21 February, 3 and 5 May 2023 and 5 July 2023 (with further written submissions filed on 2 and 16 August 2023)

JUDGE:

Long SC DCJ

ORDER:

There will be judgment for the plaintiff against the defendants, in the sum of $225,000.00 upon the cause of action as to debt due and owing but not otherwise, with the parties having opportunity to address the form of order to be made in this respect and as to any further or incidental orders.

CATCHWORDS:

CONTRACTS – IMPLIED TERMS – NOVATION – where the plaintiff seeks to recover debt pursuant to a written agreement, made in 2004 in respect of interfamilial arrangements regarding the occupancy of a residence and advances made by the plaintiff to a company of which the defendants were the directors – where no relief is pursued against the subsequently deregistered company – whether the written agreement was relevantly varied – whether the implication arising from the conduct of the parties in respect of the arrangements is that the written agreement was novated so that the defendants assumed the rights and liabilities of the company under that agreement

TRUSTS LAW – whether there was wrongful distribution of assets so as to engage the application of s 113 Trusts Act 1973 (Qld)

CORPORATIONS LAW – whether there was a breach of trust so as to engage the application of s 197 Corporations Act 2001

RESTITUION – money had and received – whether there is any established cause of action for restitution, by the defendants, of monies originally advanced to a company

LIMITATIONS OF ACTIONS – DEEDS – whether reliance upon a relevant limitation period was sufficiently pleaded or identified for the purposes of the trial – whether or not the agreement executed in 2004 took effect as a deed pursuant to s 45 of the Property Law Act 1974 (Qld) – whether the plaintiff’s cause of action is for a debt which is repayable on demand, attracting the principle discussed in Ogilvie v Adams [1981] VR 1041 and s10(1)(a) of the Limitations of Actions Act 1974 – whether the cause of action in debt was subject to conditions under the agreement so that the cause of action arose upon demand not made before May 2019 – whether there has been an acknowledgement of debt such as to engage s35 of the Limitations of Actions Act 1974 and s14 of the Electronic Transactions Act 2001

LEGISLATION:

Corporations Act 2001 (Qld) s 197
Electronic Transactions Act 2001, s14
Limitations of Actions Act 1974 ss 10, 35, 36
Property Law Act 1974 (Qld) ss 9(1), 45, 46C
Trusts Act 1973 (Qld) s 113

CASES:

Byrne v Australian Airlines Ltd (1995) 185 CLR 410
Commonwealth Bank of Australia v Barker (2014) 253 CLR 169
Edgar and Anor v Ron Kingham Real Estate Pty Ltd [1999] 2 Qd R 439
Gambaro Pty Ltd v Rohrig (Qld) Pty Ltd [2018] QCA 327
Haller v Ayre [2005] 2 Qd R 410, [32].
King Tide Company Pty Ltd v Arawak Holdings Pty Ltd [2017] QCA 251
Lumbers v W Cook Builders (2008) 232 CLR 365
Netglory Pty Ltd v Caratti [2013] WASC 364
McMahon v National Foods Milk Ltd [2009] VSCA 153
Ogilvie v Adams [1981] VR 1041, 1059
Pan Ocean Shipping Co Ltd v Creditcorp Ltd [1994] 1 WLR 161, 166.
Tszyu v Fightvision Pty Ltd; Fightvision Pty Ltd v Onisforou [1999] NSWCA 323
VL Finance Pty Ltd v Legudi (2003) 54 ATR 221
Young v Queensland Trustees Ltd (1956) 99 CLR 560, 566

COUNSEL:

M White for the Plaintiff
S Carius for the First and Second Defendant (from 3 May 2023)

SOLICITORS:

Queensland Legal for the Plaintiff
Axia Litigation Lawyers for the First and Second Defendant (from 3 May 2023)

Index

Introduction

Loans made to Blacsky

Variation of the Agreement with Blacsky?

Novation?

The Other Causes of Action

Breach of contract
Wrongful distribution of trust property/Breach of trust?
Restitution Claim

Are the plaintiff’s claims statute barred?

Pleading issues
An acknowledgment of debt?
Is there a deed?
Application of the Limitations of Actions Act 1974

Conclusion

Introduction

These proceedings are brought by the father of the first defendant and father-in-law of the second defendant, claiming the sum of $225,000.00, interest pursuant to the Civil Proceedings Act 2011, and costs.
Primarily, that sum is claimed as debt due and owing. In the alternative, there are claims that the sum of $225,000.00 is payable:
(a)as damages upon the finding of a breach of deed; and/or
(b)as restitution for monies had and received; and/or
(c)upon an order pursuant to section 197 of the Corporations Act 2001 that the first and second defendants discharge the liability of Blacsky Pty Ltd for the monies owed; and/or
(d)upon an order pursuant to section 113 of the Trusts Act 1973 for the wrongful distribution of trust assets of The Schebella Family Trust, made by Blacsky Pty Ltd.
It is convenient to outline some of the uncontested context to this dispute:
(a)On 11 July 1997, the first defendant became a director of Blacsky;[1]
[1]This is admitted in the pleadings: Further Amended Statement of Claim, filed 20/02/2023 (“FASOC”), [2(c)] and Amended Defence, filed 07/09/2022 (“AD”), [2(c)(i)].
(b)On 7 July 2003, Blacsky became the sole trustee of The Schebella Family Trust;[2]
[2]This is admitted in the pleadings: FASOC, [5] and AD, [5(a)].
(c)On 16 July 2003, the second defendant also became a director of Blacsky;[3]
[3]This is admitted in the pleadings: FASOC, [2(d)] and AD, [2(d)(i)].
(d)On 5 July 2004, Blacsky as trustee of The Schebella Family Trust, acquired property located at 8 Verdon Street, Golden Beach (also described as Lot 113 on RP96152, County of Canning, Parish of Bribie and title reference 14419025) (“the Verdon Property”);[4]
[4]This is admitted in the pleadings: FASOC, [6] and AD, [6].
(e)In November 2004, the plaintiff and his wife commenced residence at the Verdon Property;
(f)On 4 August 2004, the plaintiff and his wife, Bernice Schebella, transferred $5,000.00 to Blacsky;[5]
[5]This is admitted in the pleadings: FASOC, [9(a)] and AD, [9(b)(i)].
(g)On 21 September 2004, the plaintiff and his wife transferred $20,000.00 to Blacsky;[6]
[6]This is admitted in the pleadings: FASOC, [9(b)] and AD, [9(b)(ii)].
(h)On 13 November 2004, the plaintiff, his wife, and Blacsky as trustee of The Schebella Family Trust, executed a document which was entitled “Deed”;[7]
[7]This is admitted in the pleadings: FASOC, [7] and AD, [7(a)].
(i)On 22 November 2004, the plaintiff and his wife transferred $150,000.00 to Blacsky;[8]
[8]This is admitted in the pleadings: FASOC, [9(c)] and AD, [9(b)(iii)] and [10]. Any prevarications about this being money from the plaintiff and his wife and in the nature of a loan to Blacsky were ultimately not pressed: see Defendants’ Written Submissions filed 4/7/23, at footnote 1 and [31].
(j)On 9 August 2007, the plaintiff and his wife transferred $50,000.00 to Blacsky;[9]
(k)On 8 January 2010, the Property was transferred from Blacsky to the first and second defendants personally;[10]
(l)Since 10 January 2012, the plaintiff and his wife paid rent to the first and second defendant personally, rather than to Blacsky;[11]
(m)On 18 March 2018, Bernice Schebella passed away;[12]
(n)About 8 May 2019, the Plaintiff vacated the Property;[13]
(o)On 13 May 2019, the Second Defendant lodged an application for voluntary deregistration of Blacsky with the Australian Securities and Investments Commission;[14]
(p)On 14 May 2019, the plaintiff, through his solicitors, made demand for the repayment of monies loaned in the total sum of $225,000.00;[15]
(q)On 17 July 2019, Blacsky Pty Ltd was deregistered;[16]
(r)On 27 July 2019, the first and second defendant agreed to sell the Property to Bruce Malcolm Hunt for $575,000.00;[17]
(s)On 21 August 2019, the first and second defendant settled the sale of the Property for an amount of $575,578.30, applied in various ways including, in the amount of $364,324.41 to discharge the mortgage on the property and $174,835.95 deposited to a personal bank account of the defendants.[18]
[9]This is admitted in the pleadings: FASOC, [16] and AD, [16(a)].
[10]This is admitted in the pleadings: FASOC, [28] and AD, [28].
[11]This is not the subject of unequivocal response: FASOC, [29A(b)], AD, [29A], but see paragraphs [55] - [72], below.
[12]FASOC, [29A(b)] and see Defendants’ Written Submissions filed 4/7/23, [44] and [125].
[13]FASOC, [29C] – not admitted in the AD but ultimately accepted to be in or about May 2019; see Defendants’ Written Submissions filed 4/7/23, [48].
[14]This is admitted in the pleadings: FASOC, [32] and AD, [32].
[15]This is admitted in the pleadings: FASOC, [38] and AD, [38].
[16]This is admitted in the pleadings: FASOC, [34] and AD, [34].
[17]This is admitted in the pleadings: FASOC, [39A] and AD, [39A(iii)].
[18]This is admitted in the pleadings: FASOC, [39B] and AD, [39B(iii)].
It is important to understand that these claims relate to interfamilial financial arrangements in respect of residence in a property on the Sunshine Coast and related agreement as to the advancement of monies claimed as loans, which commenced many years ago and which were maintained, with some suggested variations, over some 14 or more years, until 2019. As the evidence establishes, some steps were taken to legally formalise those arrangements but not such as may have been expected if there had been ongoing involvement of lawyers for all of the parties. Moreover, and adding to the challenges in now seeking to the address the legal implications of these dealings, the defendants have not consistently had legal representation. They were legally represented when their defence to the plaintiff’s originally pleaded claims was filed,[19] but their Amended Defence and last pleading was prepared without that benefit of legal representation.[20] That remained their position up until the adjournment of the trial in this matter on 21 February 2023.
[19]On 30/09/19, Court Document 7.
[20]As filed on 07/09/2022, Court Document 48.
The plaintiff’s claims initially proceeded against Blacsky Pty Ltd (“Blacsky”), as the third defendant to the proceedings, but there had been no entry of appearance for that entity and the claims against it were discontinued on the first day of hearing, on 20 February 2023. That was in the context of counsel for the plaintiff explaining his instructions that unsuccessful attempts had been made to have that company reinstated.[21] Leave was also then granted so that the plaintiff could read and file an Amended Claim and Further Amended Statement of Claim (“FASOC”) in order to effect that discontinuance of claims against Blacsky and to appropriately reflect the amendments which had been made in the Amended Statement of Claim, filed 10 August 2022 and to which the defendants’ had pleaded in their last pleading, the Amended Defence filed 7 September 2022.[22]
[21]T 1-3.11-18.
[22]T 1-26.4 - 1-28.10.
Whilst it was then understood that the Amended Defence may not have addressed difficulties with non-admissions of a kind which had been identified in a Reply filed on 29 August 2022 in response to an earlier Amended Defence filed on 18 August 2022, counsel for the plaintiff, also at the outset, indicated a position as to desire to proceed without reliance upon any contentions, such as were raised in that Reply as to deemed admissions, and therefore upon the pleadings in the FASOC and the Amended Defence filed 7 September 2022.[23]
[23]T 1-19.47 - 1-20.10.
It is to be noted that such pragmatism and desire to proceed with his attempt to prove his claims was also the basis for the plaintiff’s successful resistance to the application for the postponement of the trial, as it had been adjourned to recommence on 3 May 2023, which had been filed on 18 April 2023 (shortly after the defendants had engaged legal representatives) and was refused on 21 April 2023.
In the result and when the trial resumed on 3 May 2023, counsel for the defendants indicated that despite the “infelicities” in the defendants’ pleading, there would be no amendment sought to be made to it, in what was also described as a “pragmatic approach”.[24] Without objection to that course and prior to the completion of the cross-examination of the plaintiff, counsel then proceeded to identify seven issues to be determined,[25] and further elaborated the case of the defendants, by way of an opening,[26] before calling each of the defendants as witnesses.
[24]T 3-3.25-30.
[25]T 3-4.33-3 – 3-11.1.
[26]T 3-41.6 – 3-47.5.
Notwithstanding these attempts at pragmatically advancing the hearing and determination of this matter, it will be necessary to deal with some pleadings points which have been taken in the ultimate submissions. That will be done in reference to the issues in respect of which such points arise.
Although complicated by the various alternative claims, the case pursued by the plaintiff is most simply premised upon the considerations that:
(a)between 4 August 2004 and 9 August 2007, the sum of $225,000.00 was advanced by the plaintiff to Blacsky, in four instalments, by way of loan under an agreement, whether that written agreement be by a deed or simple contract;
(b)none of the loaned money has been repaid; and
(c)the first and second defendant are personally liable for the debt owing, in particular due to the novation of the loan agreement with Blacsky effectively establishing their personal liability in that respect.
Each of those premises is, at least partially, put in dispute and in respect of the claim as it alleges outstanding indebtedness for monies advanced to Blacsky, between 2004 and 2007, it is contended as an unsecured loan repayable upon demand, defences are said to be raised under the Limitations of Action Act 1974. The defendants particularly contest any suggestion of the novation of the agreement and also the other issues raised to allege their personal liability for any indebtedness of Blacsky.

Loans made to Blacsky

It is common ground that the genesis of the issues now in dispute lies in the purchase by Blacsky, as Trustee of the Schebella Family Trust, of the Verdon Property, by contract dated 18 May 2004.[27] Blacsky had replaced the first defendant as the sole corporate trustee of that Trust on 7 July 2003. As the trust deed for the Schebella Family Trust discloses, the first defendant is a tertiary beneficiary and the second defendant a secondary beneficiary of a trust, where the Trustee is empowered, amongst other things:
(a)to deal with property and enter contracts or arrangements, “including… any contract of loan guarantee indemnity or service”;[28] and
(b)to make discretionary distribution of the income and capital of the trust to any one or more of the beneficiaries.
The first defendant was a director of Blacsky from its incorporation on 11 July 1997 until its deregistration on 17 July 2019 and the second defendant was a director from 16 July 2003 until 17 July 2019.[29] There is also undisputed evidence that Blacsky conducted business, including buying and selling real property, as trustee for the Schebella Family Trust.[30]
[27]Ex. 27.
[28]Ex. 26, clauses 12 and 13.
[29]Ibid, clauses 5 and 8.
[30]T 3-49.5-10 and T 4-3.22-25.
There is evidence that Blacsky was utilised by the defendants as a vehicle for property investments and it is common ground as to the plaintiff and his deceased wife coming to reside in the Verdon Property, after discussions which commenced in conjunction with their visit to Queensland from where they were residing in South Australia, for a wedding in May 2004 and their being shown the Verdon Property by the defendants, in the context of the plaintiff and his wife were then looking for a property to enable them to move to Queensland.
Whilst there is dispute as to whether the first and second payments made by the plaintiff in 2004 were in the nature of a loan,[31] it is convenient to first note that, again as a matter of common ground, by November 2004, he and his wife moved to reside in the Verdon Property, following, as was explained in the evidence of the first defendant, some renovations to make it suitable.[32]
[31]In circumstances where there is no issue raised as to the plaintiff’s pursuit of what is inherently a joint involvement of him and his now deceased wife, it will be convenient to simply refer to the advances as being by the plaintiff.
[32]T 3-53.21-25; cf: T 1-29.14-16.
In that context and on 13 November 2004, the plaintiff and his wife, on one hand, and Blacsky on the other, executed the agreement which is entitled “Deed”.[33] The following clauses of that written agreement should be noted:
[33]Ex. 2.
“1.Blacsky hereby grants a tenancy at will to Kevin and Bernice to reside in the property so long as the terms and conditions of this Deed are fulfilled.
2.In consideration of the matters set out in paragraph 1 hereof, Kevin and Bernice will loan into the trust such amount as is agreed upon by Blacsky and Kevin and Bernice from time to time.
3.Blacsky will charge a commercial rent to Kevin and Bernice for the occupancy of the property which will be agreed upon from time to time and failing agreement to be set by averaging two real estate rental appraisals from real estate agents practicing in the Caloundra area. The rental shall be paid calendar weekly in advance unless otherwise agreed upon.
4.Blacsky agrees to pay Kevin and Bernice such interest as is agreed upon from time to time and failing agreement interest on monies loaned to Blacsky by Kevin and Bernice on similar amounts loaned by Westpac Banking Corporation in accordance with their trading bank terms of lending. Such interest shall be calculated and payable in the absence of any other agreement to the contrary, quarterly in arrears.
…
6.Kevin and Bernice shall be entitled to terminate this Deed upon any of the following events occurring:
a. Upon giving ninety (90) days written notice of their intention to require redemption of the loaned funds granted to Blacsky save that the redemption of the loan shall not prima facie disentitle the right of Kevin and Bernice to occupy the property save that the tenancy will thereupon become a week to week tenancy capable of being terminated by giving twenty-eight (28) days written notice one party to the other.
b. Upon the death of either Kevin or Bernice (or both) at the option of their executors to terminate the tenancy whereupon the monies loaned by Kevin and Bernice to Blacsky shall be repaid ninety (90) days after receipt of written notice by the executors of either or both Kevin or Bernice.
…
9.This Deed shall be deemed to commence from 19 November 2004 and shall continue until otherwise terminated by the terms of this Deed.
10.Blacsky will keep and maintain a record of all financial transactions applying in respect of the property. Those records will include particulars of monies loaned by Kevin and Bernice, rentals paid by Kevin and Bernice, interest accrued on the monies from time to time calculated in accordance with this agreement and monies disbursed, whether by way of return of loan monies capital and/or interest by Blacsky to Kevin and Bernice. Blacsky will provide a quarterly statement (in arrears) to Kevin and Bernice which unless it contains a manifest error and is not objected to by Kevin and Bernice within thirty (30) days of issue shall be regarded as prima facie conclusive evidence of the financial records for the previous quarter.”

Although not initially unequivocally admitted in the pleadings, it is ultimately common ground that, on 19 November 2004, $150,000.00 was paid by the plaintiff to Blacsky by way of loan, pursuant to this agreement.[34]
[34]Defendants’ written submissions, filed 4/7/23, [236].
As to the earlier payments, totalling $25,000.00, also claimed by the plaintiff as advancements by way of loan, it is convenient to first note the position of the defendants. They point to evidence that:
(a)in connection with their showing the plaintiff and his wife the Verdon Property and their discussions as to occupancy of it, it was explained that there was necessity for rent to be paid;[35] and
(b)shortly after settlement on 5 July 2004 and in the context of an alternative tenant being available, the plaintiff agreed to pay $5,000.00, as an advancement for rent, on 4 August 2004 and a further $20,000.00, also for rent, on 21 September 2004.[36]

[35]T 3-53.21-26 and 4-6.25-30.

[36]T 3-53.30-40 and 4-6.32 – 4-7.2.

It is also contended that the plaintiff conceded as much, when it was suggested to him that each of these payments were on account of rent; although, his response was: “Probably. I don’t know.”[37] Earlier, there had been the following exchange, when the first defendant was cross-examining the plaintiff:
“DEFENDANT M. SCHEBELLA: So it’s possible that those payments might have been for rent?”[38]
HIS HONOUR: Now which particular payments? You say the $20,000 and the $5,000?
DEFENDANT M. SCHEBELLA: And the $5,000? - - - Yeah. I wouldn’t know for sure, but possibly, yeah.
Is – is it possible that the initial payment of $5,000 in August was to secure the property for you and your wife? - - - I don’t know.
Do you recall that there might have been any discussion between Mark and Karen and yourself of another tenant potentially wanting that property? - - - I don’t recall anything like that.”
In evidence in chief, the plaintiff referred to paying rent by “direct debit” in respect of the Verdon Property from shortly after moving there in November 2004.[39] He was unsure about the amounts of the transfers he made up to and about when they moved into the Verdon Property and when asked why he made transfers of money, he responded that:
“They [the defendants] requested it.”[40]
[37]T 3-23.15-17.
[38]T 2-22.44 – 2-23.12.
[39]T 1-48.25-32.
[40]T 1-49.4-27.
A difficulty in the plaintiff’s case lies in the absence of direct evidence from him, noting that he was approaching his 98^th birthday when he gave evidence, as to the advances being in the nature of loans. But neither did he unequivocally accept that they were for rent payments. As will be noted, there is a sense of interrelationship of these concepts in the documentary evidence as to the arrangements put in place to deal with the separate obligations in respect of payments of interest and rent, as those obligations are identified in the written agreement executed on 13 November 2004.
Neither, in such circumstances and having regard to the effluxion of time involved, is the issue to be determined solely upon any assessment of the general credibility of the evidence of the defendants, whether having regard to any comparison with other aspects where they professed a lack of recall of detail or any similarity of their recall as to these interactions in 2004. Although, it may be noted that the contention as to the advances of the plaintiff being on account of rent was not a response which emerged until the Amended Defence filed on 7 September 2022.
Rather, the appropriate conclusion, as to acceptance of the plaintiff’s case, is to be found in reference to some relevant contemporary documentary records. Whilst it is correctly pointed out for the defendants that some care is necessary in reliance upon, at least some of the documents put into evidence, for various reasons including the incompleteness of some records, and in ignoring handwritten notations which were not relied upon and addressed in evidence, there is a sufficient basis for reasonable satisfaction as to the plaintiff’s allegations as to his advances being in the nature of loans, to be found in some relevant documentary evidence:
(a)First, there is an email sent to the plaintiff by the second defendant, on 5 June 2004,[41] which contains a schedule clearly representing a proposal connected to the purchase and tenancy of the Verdon Property. Importantly it:
[41]Ex. 1A.
(i)is headed “Schebella Family Trust 8 Verdon Street, Golden Beach Qld”;
(ii)has a column headed “Your Investment”, which varies in amounts from $50,000.00 to $200,000.00, as the clear basis for indicative calculations as to the net result of allowance for interest payable on such amounts, in comparison to the rental payments at $270 per week; and
(iii)as is contended for the plaintiff, it is notable that it is somewhere between the “investment” of $170,000.00 and $180,000.00 that a break-even point would be achieved.
(b)Secondly and notwithstanding that they begin at a document labelled “Statement No. 4”, for the period 1 July 2005 to 30 September 2005, there is also a series of records of the kind envisaged and required to be kept by clause 10 of the agreement executed on 13 November 2004.[42] Importantly, those statements:
(i)are headed with the name “Blacsky Pty Ltd” and the words “Investment Account” and are addressed to the plaintiff and his wife at the address of the Verdon Property;
(ii)as at 1 July 2005, there is the representation of an “opening balance” of $175,627.54. After the calculation of credits referred to as “interest” and debits for “Rent Payment auto debit” at $270 weekly, the closing balance is recorded as $176,524.92, as indication of the ongoing extent to which the allowances for interest were exceeding the rental amount;
(iii)there is then a sequence of statements numbered 5 through to 8 which, sequentially, cover quarterly periods from 1 October 2005 to 30 September 2006, demonstrating similar calculations, except for noting that the amount of the rent increased to $290 weekly from 6 January 2006 and that the closing balance represented at the end of that period was $179,126.96; and
(iv)there is also a similar document which refers to the period 1 July 2007 to 9 August 2007, representing an opening balance of $176,843.87, a credit entry dated 9 August 2007 for $50,000.00, with a balance of $225,298.87 also debited on the same date with the entry “Closing Transfer to 8 Verdon Street”.
[42]Ex. 2.
The payment of the amount of $50,000.00 into the bank account of Blacsky on 9 August 2007 is also evidenced by a deposit slip, Exhibit 5. The defendants also contend that this was an advancement for rent rather than by way of loan.
The plaintiff identified Exhibit 4 (which has been referred to as the “Verdon Proposal”) as a document provided to him in typed form by the defendants prior to him advancing the $50,000.00 to Blacsky on 9 August 2007 and he identified his own handwritten notations and calculations on it.[43] Importantly, it is to be noted that the typed portion of the document:
[43]T 1-52.28 – 1-58.35.
(a)is headed “K & B SCHEBELLA 8 VERDON ST GOLDEN BEACH QLD 4551”;
(b)first sets out the following:
Your investment             175000
Property Value               425000
______
Shortfall  250000
Therefore
Percentage invested =     175000/425000               41%; and
(c)there is then a table as follows:

investment

plus rent

investment to $225000

50000

$146.00

investment to $235000

60000

$139.00

investment to $245000

70000

$132.00

Clearly and despite the disagreement of the first defendant,[44] and the doubt expressed by the second defendant in the context of her lack of recall,[45] it is to be accepted that this document was provided to the plaintiff by one or both of the defendants on behalf of Blacsky and provides an explanation for the further deposit of $50,000.00 to bring the “investment” to $225,000.00. As the plaintiff said that investment being: “The money I gave them”.[46]
[44]T 3-79.12-20.
[45]T 4-65.34-44.
[46]T 1-54.25.
Further, it is apparent that the proposal is in respect of a different approach to the offsetting of the entitlement to interest on the investment, or loan, and the payment of rent for the occupancy of the Verdon Property. That offsetting approach is represented in the last of the Investment Account Statements (numbered 10, Exhibit 1B), where before the entries which have been noted in respect of the $50,000.00 credit and “closing transfer to 8 Verdon Street”, each on 9 August 2007, there is:
(a)the credit entry for interest of $315 also on 9 August 2007; and
(b)entries for Rent payments on 25 July 2007 in the amount of $124.00 and on 9 August 2007 in the amount of $620.00 (each discernibly represent multiples of a base figure of $310).
There is also evidence of copies of executed General Tenancy Agreements (in Form 18a pursuant to the Residential Tenancies Act 1994), which evidence agreements between the plaintiff and his wife and Blacsky for rent to be paid, at the following rates for the stated periods:

Date Executed

$/week

Period

17/02/2006

270

17/09/2005 – 31/12/2005 (Exhibit 19)

17/02/2006

290

01/01/2006 – 17/09/2006 (Exhibit 19)

18/09/2006

310

18/09/2006 – 18/09/2007 (Exhibit 40)

18/05/2008

370

18/05/2008 – 18/11/2008 (Exhibit 20)

Further and as the plaintiff explained,[47] the effect of his handwritten notations on Exhibit 4 was to calculate the effect of the proposal in typed form, on the basis of an addition of $50,000.00, to take the total investment to $225,000.00 and to extrapolate the rental figure of $146 per week to a rounded monthly amount of $633. It is then of significance to note that:
(a)Exhibit 6 is a copy of a Netbank transfer receipt in respect of a monthly payment of $633 to the bank account of Blacsky (no. 177219), starting on 10 August 2007; and
(b)Exhibit 33 is a copy of bank statements for the Blacsky account no. 177219, for the period 19 July 2007 to 18 May 2018, demonstrating such credits, as from 10 August 2007 until 12 May 2008, in the amount of $633.00 and from 10 June 2008 in the amount of $753.00.
[47]T 2-37.11-15.
In the context of these obviously contemporaneous records, the explanation purported by the second defendant,[48] but not the first defendant,[49] that the payment of this additional $50,000.00 was on account of rent, both for arrears because, after putting in the $5,000.00 and the $20,000.00 in 2004, “they didn’t transfer any money for rent for the three years from their own personal account” and in respect of “arrears”,[50] or “to cover back rent and future rent”,[51] must be rejected as an unacceptable reconstruction, at best. Similarly, in this context, the contended explanation of the second defendant for the arrangements whereby the plaintiff paid the monthly amount of $633.00 was chosen by the plaintiff “because of his cash flow”,[52] is also patently unacceptable.
[48]T 4-16.27-46 and T 4-72.24 – 4-73.30.
[49]Cf: T 3-81.1-33.
[50]T 4-16.30 – 4-17.15 and 4-72.31-32.
[51]T 4-72.31-32.
[52]T 4-72.39 – 4-73.2.
As will be noted to also be consistently acknowledged in subsequent documentation relating to these arrangements, the plaintiff has established his case that a total of $225,000.00 was advanced by him as loans to Blacsky, as contemplated in the agreement executed on 13 November 2004.

Variation of the Agreement with Blacsky?

The plaintiff seeks a finding that there has been an inferred variation of the agreement executed on 13 November 2004 “such that the total monies loaned (in the sum of $225,000.00) would be secured by an interest in Verdon Property, proportionate to its $425,000.00 value”.[53] Reference is made to the necessity for clear demonstration of agreement, having regard to the usual principles as to formation of contracts,[54] and that such an agreement may be inferred from conduct.[55]
[53]Plaintiff’s written submissions, filed 20/06/23, [49].
[54]Jafair v 23 Developments Pty Ltd [2019] VSCA 2001, [190].
[55]Commonwealth v Crothall Hospital Services (Aust) Ltd (1981) 36 ALR 567; Woolworths Group Ltd v Gazcorp Pty Ltd [2022] NSWCA 19, [79].
Although the pleaded proposition is that there was such an agreement as to securing such an interest in the Verdon Property,[56] there is no relief pursued in respect of any such security or any equitable interest in the Verdon Property. At one point in the plaintiff’s submissions, the proposal contained in Exhibit 4 is described as adopting “the illusory concept of the plaintiff holding a percentage of ownership in the Verdon Property”.[57]
[56]FASOC [17].
[57]Plaintiff’s written submissions, filed 20/06/23, [58(d)(ii)].
However, in the submissions for the plaintiff it is contended that it should be first found that upon the payment of the $50,000.00 by the plaintiff on 9 August 2007:
“… an agreement arose between the Plaintiff and Bernice, and Blacsky, to vary the terms of the Loan Deed such that the total Monies Loaned (in the sum of $225,000.00) would be secured by an interest in the Verdon Property, proportionate to its $425,000.00 value”.[58]
Then it is further contended that it should be found that there:
“… was an implied term of the agreement to vary the Loan Deed
that the monies loaned under the Deed would be repayable by Blacsky to the Plaintiff and Bernice upon the earlier of:
(a) a demand for repayment made by the Plaintiff and Bernice; and
(b) the sale of the Verdon Property.”[59]
What follows are the reasons as to why neither finding should be made.
[58]Ibid, [49], in the context of [46]-[48].
[59]Ibid, [80].
Whilst it is clear that Exhibit 4, as the plaintiff identified it, was, in the typed form, an offer emanating from Blacsky, which has been accepted by the plaintiff’s selection of the option of adding $50,000.00 to his “investment” and deposit of that amount to the Blacsky bank account,[60] it is unnecessary to determine whether there is any implication in this and/or the entry in Exhibit 1B “Closing Transfer to 8 Verdon Street” as to the creation of any charge or equitable interest in respect of the Verdon Property. Neither did the plaintiff give evidence as to any such understanding.
[60]Ex. 5.
Any agreement reached is partly related to the rent payments for the Verdon Property but also the interest payable in respect of the plaintiff’s “investment” in the nature of loans to Blacsky. The use of the term “investment” is entirely consistent with the notion of making an interest bearing loan and had been used in respect of the earlier statements accounting for the offsetting of interest and rent pursuant to the written agreement executed on 13 November 2004.
Those are separate but related obligations respectively arising from the terms of that agreement and prior to this point had been accounted for by what has been noted as the offsetting arrangements. The proposal in Exhibit 4 is to be readily seen as a variation to the methodology and basis of calculation of such offsetting, albeit by adoption of a notional comparison of the proportion of the loaned amount to the nominated value of the Verdon Property.
It may also be noted that the plaintiff’s handwritten notations on Exhibit 4 include a reference to “$310 p/w”, which, as has been noted, was the amount agreed as rental for the period 18 September 2006 to 18 September 2007. As the further notations of the plaintiff confirms, an addition of $50,000.00 to take the “investment” to $225,000.00 would represent an equation of approximately 52.9% of the nominated value of $425,000.00 and the proposed additional payment of $146 per week for rent, is approximately 47.1% of $310. As the further notations of the plaintiff tend to demonstrate, whether correctly or not having regard to the contemporary financial market conditions and as doesn’t matter, such arrangements might indicate allowance for the value to Blacsky of the monies which had been loaned to it in terms of achieving the necessary offset.
In this sense, the agreement so reached is not to be regarded as a variation of the agreement executed on 13 November 2004 but in the sense of a collateral agreement reached as contemplated pursuant to that agreement and particularly clauses 3 and 4.
The further point to note is that there is in this contemporaneous documentation, as will also be seen in subsequent documentation, acknowledgment of the amount of $225,000.00 as the plaintiff’s “investment” or total loan; noting that the expressed term in clause 2 of the agreement executed on 13 November 2004 is “loan”.
Accordingly, the evidence of the plaintiff is to be accepted rather than that of the defendants as to these issues. As the plaintiff stated this proposal as to the adjustment of the arrangements was given to him by one or both of the defendants, for Blacsky, and was the genesis of him providing the additional $50,000.00. As was conceded by the first defendant, the parties thereafter conducted the arrangements in accordance with this proposal,[61] and the assertion proffered by the second defendant that the payment of the additional $50,000.00 related to arrears and future rent, is to be properly regarded as a wholly unconvincing reconstruction flying in the face of not just what must be regarded as contemporary documentation but the objective facts as to the effected arrangements.
[61]T 3-81.27-33.
In the later respect, it is to be noted that it is evidenced that:
(a)from 10 August 2007 to 12 May 2008, the plaintiff made monthly payments to the Blacsky bank account of $633, with the notation “Rental”.
(b)from 10 June 2008 to 11 October 2010, the plaintiff made monthly payments to the Blacsky bank account of $753, with the notation “Rental”.
(c)from 10 November 2010 to 12 December 2011, the plaintiff made monthly payments to the Blacsky bank account of $1084.54, with the notation “Monthly”.[62]
Without more, the irresistible inference would be that these adjustments are the result of further agreement between the plaintiff and the defendants, as the guiding mind of Blacsky, as to offsetting their respective obligations under the Deed. Despite the prevarications and denials of the first defendant,[63] and denials of the second defendant,[64] and notwithstanding the unexplained possession of the plaintiff of the copy of Exhibit 8 (marked as Exhibit 8A ) apparently produced in a different font and bearing the handwritten notation “2017”, as was the effect of the plaintiff’s evidence,[65] the most likely explanation for each of these respective agreements is to be found in documents provided to him by one or other of the defendants, for Blacsky, being respectively Exhibits 8 and 10.
[62]Ex. 33.
[63]T 3-83.32 – 3-85.18 and 3-87.35 -3-90.33.
[64]T 4-88.1-26, 4-91.11 – 4-93.15 and 4-100.1-26.
[65]T 1-62.15 -163.15, 2-103.46 – 2-105.33 and 1-64.34 -1-65.29.
The content of Exhibit 8, in particular, is redolent of an exposition of a calculation as to the costs of the arrangements in respect of the Verdon Property, from the perspective of the defendants on behalf of Blacsky, as a means of adjustment of the respective obligations under the Deed in respect of interest payable to and rent payable by the plaintiff, again upon the notion of the acknowledged amount of $225,000.00 advanced by the plaintiff being representative of 50% of a stated value of $450,000.00 but specifically noted as “Non ownership”.
To this point and consistently with the evidence of the plaintiff, what is objectively demonstrated is a pattern of dealings between the plaintiff and Blacsky pursuant to the written agreement executed on 13 November 2004 and with consistent references to the advances from the plaintiff, in the total sum of $225,000.00, in relation to the obligation of Blacsky to pay interest, as agreed at different points, and the offsetting of the plaintiff’s obligation to pay rent, also as agreed at similarly different points.

The interrelationship of these separate obligations, as they arose under that agreement, is important to understanding the further contention for the plaintiff as to an implied term introduced into the agreement between the parties, providing for an obligation on Blacsky to repay upon the basis of the earlier occurrence of demand or the sale of the Verdon Property,[66] and notwithstanding the absence of any establishment of any interest in that property by way of security for the loan.
[66]Ibid, [80]-[90].
As the submissions for the plaintiff correctly recognise, the applicable principles,[67] require necessity of the implication to give business efficacy to an agreement and as a matter which is clear or goes without saying and is not inconsistent with any express term of the written agreement. As was observed in Byrne v Australian Airlines Ltd:[68]
“The most that can be said consistently with the need for some degree of flexibility is that, in a case where it is apparent that the parties have not attempted to spell out the full terms of their contract, a court should imply a term by reference to the imputed intention of the parties if, but only if, it can be seen that the implication of the particular term is necessary for the reasonable or effective operation of a contract of that nature in the circumstances of the case.”
In Commonwealth Bank of Australia v Barker,[69] it was observed that:
“Implication of a term in fact in a contract, by reference to what is necessary to give it business efficacy, was described in Codelfa Construction Pty Ltd v State Rail Authority (NSW) as raising issues “as to the meaning and effect of the contract”. Implication is not “an orthodox exercise in the interpretation of the language of a contract, that is, assigning a meaning to a particular provision”. It is nevertheless an “exercise in interpretation, though not an orthodox instance”. The implication of terms in fact was also characterised in Attorney-General (Belize) v Belize Telecom Ltd as an exercise in construction. Lord Hoffmann, delivering the judgment of the Privy Council, said:
‘it is not enough for a court to consider that the implied term expresses what it would have been reasonable for the parties to agree to. It must be satisfied that it is what the contract actually means.’
The distinction thus drawn is appropriate even though the scope of the constructional approach adopted by Lord Hoffmann has been debated.”
[67] Particularly as discussed in Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337, 346-347, in reference to BP Refinery Pty Ltd v Hastings Shire Council (1977) 52 A.L.J.R. 20, 26.
[68](1995) 185 CLR 410, 422, in adoption of an applicable test as formulated by Deane J in Hawkins v Clayton (1988) 164 CLR 539, 573.
[69](2014) 253 CLR 169, [22] (citations omitted).
Simply put, it is evident that the only premise upon which Blacsky could agree to grant a tenancy to the plaintiff in respect of the Verdon Property as consideration for the loans made by the plaintiff and giving rise to the respective consequential obligations in respect rent and interest, lay in its legal ownership of that property. The evident premise or assumption upon which the written agreement between the parties was made, is that Blacsky would retain that legal ownership. Moreover, the terms of clause 6 of that written agreement provide for termination options dependent upon the circumstances of the plaintiff and his wife and in the case of the available option of redemption of the loaned funds under clause 6 a, specifically provides for ongoing rights of occupancy upon a week to week tenancy, terminable upon 28 day notice by either party.
Clearly the expressed agreement has not dealt with the eventuality of Blacsky being divested of its legal ownership of the property and its ability to carry out its obligations under that agreement but that does not mean that the agreement is ineffective, in the absence of the implied term for which the plaintiff contends. In that situation, the agreement would be frustrated by the inability of Blacsky to continue to provide the consideration expressed for the agreement of the plaintiff to loan the funds to Blacsky and the plaintiff would not be without remedies in that respect. Further, the right of termination upon notice, as provided in clause 6 a, is not dependent upon any ongoing tenancy and is therefore sufficiently effective to allow such a demand to be made.
Accordingly and particularly in the context of this written agreement which operates to put into place these interfamilial arrangements, through the use of the corporate vehicle, it is not established that the implied term is necessary to give efficacy to these arrangements nor that such an implication is to be imputed into the agreement which the parties made. However, such a change of circumstances, where Blacsky was no longer able to perform its contractual obligations, provides particular context to an important aspect of the plaintiff’s case in the contention as to novation of the agreement executed on 13 November 2004.

Novation?

In seeking relief personally against the defendants, it is the plaintiff’s contention that it is to be inferred that a novation of the agreement earlier made with Blacsky, in the form of the Deed, occurred, so that the defendants were personally substituted for Blacsky, thereby personally assuming the rights and obligations of that corporate entity which had been previously utilised for the arrangements in respect of the Verdon Property. The contention is that such an inference arises from the following circumstances:
(a) the transfer of the title in the Verdon Property from Blacsky to the First and Second Defendants, on 8 January 2010;
(b) that from 10 January 2012, the Plaintiff begun paying rent to a personal bank account of the First and Second Defendants; and
(c)the acknowledgement in a document presented to the plaintiff, headed “RENTAL DISCUSSIONS WITH KEVIN CHARLES SCHEBELLA as at 31 AUGUST 2018”, of a loan in the sum of $225,000.00 together with a proposed Deed to be executed between the plaintiff and the defendants in respect of ongoing arrangements in respect of the Verdon Property.
A novation is a transaction by which a new contract is substituted for an existing agreement and this may be by substitution of a new party for an original party to the agreement.[70] The clear consent of all of the parties is required.[71] A novation may be inferred from conduct which demonstrates the necessary objective intention of the parties.[72] Consideration may be given to subsequent conduct.[73] As explained in McMahon v National Foods Milk Ltd:[74]
“As a matter of law, however, there is nothing to preclude a court from inferring the existence of a contract from the acts of the parties, as well as or in the absence of words, and so from the totality of the dealings between the parties. Hence, as matter of law, there is nothing to preclude inferring the existence of a contract of novation from conduct such as, for example, the conduct of a creditor in apparently accepting the liability of a new debtor in substitution for the old. And as was pointed out by the New South Wales Court of Appeal in Tszyu v Fightvision Pty Ltd; Fightvision Pty Ltd v Onisforou, the principle that no narrow or pedantic approach is warranted when searching for contractual intention in commercial arrangements applies equally when searching for an intention to novate.” (citations omitted)
[70]Scarf v Jardine (1882) 1 App Cas 345 at 351.
[71] T J Precision Engineering Pty Ltd v Crane Copper and Aluminium Pty
Ltd [1968] 3 NSWR 360.
[72]Pacific Brands Sport & leisure Pty Ltd v Underworks Pty Ltd (2006) 149 FCR 395.
[73]Fu Tian Fortune Pty Ltd v Park Cho Pty Ltd [2018] NSWCA 282, [43].
[74][2009] VSCA 153, [77].
The plaintiff draws particular attention to the Tszyu decision.[75] However, it is not a matter of attempting to compare or assimilate the circumstances of that case with this one and as is pointed out for the defendants, that was a case involving the acceptance of an exchange of words and confirmation of the acceptance of the indicated substitution of another corporate party, as found in the surrounding circumstances and subsequent conduct of all of the parties. More importantly, what can be noted is the confirmation of the following as to applicable principles:
[78]Novation is a transaction by which all parties to a contract agree that a new contract is substituted for one that has already been made: Olsson v Dyson (1969) 120 CLR 365 at 388, per Windeyer J, which Bainton J referred to. Novation involves the extinguishment of one obligation and the creation of a substituted obligation in its place. Intention is crucial to show a novation: see, eg, Vickery v Woods (1952) 85 CLR 336 at 345, per Dixon J as his Honour then was. A novation may be express or implied from the circumstances.
[79]Fightvision submitted that on 30 January 1993 Mr Mordey, as the chief executive officer of both Promotions and Fightvision, put to Mr Tszyu that Promotions was winding up and Fightvision would be exclusively promoting Mr Tszyu's fights in the future; that Mr Tszyu did not dissent from Mr Mordey's statement; and that upon returning to Australia, Mr Mordey said much the same to Mr Lewis, who accepted the situation. Thus Fightvision's claim was that the original contract was expressly novated to it with the consent of all parties.
[80] The subsequent events were relied on as confirming that the novation to Fightvision had taken place. As is only commonsense, “… if the parties have conducted themselves on the basis that a contract exists between them, a court will readily infer that such a contract has been brought into being”: D W Greig and J L R Davis, The Law of Contract (1987) Law Book Co, Sydney at 249. The learned authors refer to Brogden v Metropolitan Railway Company [1877] 2 App Cas 666. Lord Cairns LC spoke (at 679) of the correspondence between the parties being pervaded with “the expression of a feeling on the one side and on the other that those who were ordering the coals were ordering them, and those who were supplying the coals were supplying them, under some course of dealing which created on the one side a right to give the order, and on the other side an obligation to comply with the order”.
[81] In the present case the course of dealing was not relied on only to prove novation, but also to confirm Mr Mordey's evidence of the conversations with Mr Tszyu and Mr Lewis. The subsequent events were consistent with Fightvision being substituted for Promotions in the original contract and carrying out the remainder of the agreement.
….
[86] In Upper Hunter County District Council v Australian Chilling and Freezing Co Pty Ltd (1968) 118 CLR 429 at 437, Barwick CJ said that in searching for the contractual intention, “no narrow or pedantic approach is warranted, particularly in the case of commercial arrangements”. This equally applies, in our view, when searching for an intention that there be a novation. Given the terms of the conversations, which his Honour accepted, as well as the overwhelmingly consistent pattern of conduct of the parties after 30 January 1993, there is no ground for disturbing his Honour's finding on novation. There is little or no evidence to suggest that the parties intended that Fightvision should perform the contract on behalf of Promotions. This is an area where evidence such as accounting material between the companies, if available, would have been tendered. There was none. In our view, the appeal in relation to novation fails.”
[75]Tszyu v Fightvision Pty Ltd; Fightvision Pty Ltd v Onisforou [1999] NSWCA 323.
As is correctly pointed out and emphasised for the defendants, the plaintiff does not rely upon any evidence as to any exchange of words, let alone any written agreement, in respect of the asserted novation of the existing written agreement with Blacsky. However, those submissions also acknowledge that it is generally recognised that a contract may be inferred from circumstances or construed from the conduct of the parties.[76] Particular reference is made to the following exposition of the relevant principles, in King Tide Company Pty Ltd v Arawak Holdings Pty Ltd:[77]
[76]Refence is made to Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153, [25] and [74] .
[77][2017] QCA 251, [12]-[21] (citations omitted).
“[12] The application of the classical theory of contract formation requires a consideration of the terms of an alleged offer and the terms of the alleged acceptance. If the acceptance corresponds with the offer, then so long as the other requisite elements exist (namely intention to be legally bound, consideration and certainty), then a legally binding contract will, generally speaking, have been formed.
[13]   A complication which sometimes arises is that the offer and acceptance analysis reveals that the parties contemplated a subsequent formal document, hence the Masters v Cameron classes of case. In such cases, the decisive consideration is an objective assessment of whether, as at the time in question, the parties intended to bind themselves to the terms of a particular contract, in advance of the creation of the formal document.
[15]   It remains to note that it is not controversial that conduct occurring after the date a contract was allegedly formed by acceptance of an offer is admissible on the question of whether a contract has been formed as alleged.
[16]   The appellant did not, however, limit its case to the application of classical offer and acceptance analysis, either below or in this Court. below or in this Court.
[17]   It is, of course, well recognized that the classical analysis is neither necessary nor suitable to all cases. Thus, in Integrated Computer Services Pty Ltd v Digital Equipment Corporation (Aust) Pty Ltd, McHugh JA (with whom Hope and Mahoney JJA agreed) observed:
“It is often difficult to fit a commercial arrangement into the common lawyers' analysis of a contractual arrangement. Commercial discussions are often too unrefined to fit easily into the slots of ‘offer’, ‘acceptance’, ‘consideration’ and ‘intention to create a legal relationship’ which are the benchmarks of the contract of classical theory. In classical theory, the typical contract is a bilateral one and consists of an exchange of promises by means of an offer and its acceptance together with an intention to create a binding legal relationship …. A bilateral contract of this type exists independently of and indeed precedes what the parties do. Consequently, it is an error ‘to suppose that merely because something has been done then there is therefore some contract in existence which has thereby been executed’ …. Nevertheless, a contract may be inferred from the acts and conduct of parties as well as or in the absence of their words: …. The question in this class of case is whether the conduct of the parties viewed in the light of the surrounding circumstances shows a tacit understanding or agreement. The conduct of the parties, however, must be capable of proving all the essential elements of an express contract: …. Care must also be taken not to infer anterior promises from conduct which represents no more than an adjustment of their relationship in the light of changing circumstances.”
[18]   Three relevant propositions of legal principle can be identified in the case law.
[19] First, where the question of contract formation involves determining whether acceptance of an offer can be inferred in the absence of express consent, acceptance of the offer may be inferred if an objective bystander would conclude from the offeree's conduct, including its silence, that the offeree has accepted the offer and has signalled that acceptance to the offeror.
[19] Second, a similar objective approach is to be taken where the question of contract formation involves determining whether a contract may be inferred from conduct, even where no distinct offer and distinct acceptance can be identified. An enforceable contract may be inferred when the manifest intention of the parties, objectively ascertained, evinces a tacit agreement with sufficiently clear terms.
[20] Third, in both cases, care must be taken to ensure that the objective assessment of the relevant conduct in all the circumstances unequivocally points to the existence of the contract in the terms alleged by the party seeking to prove the contract. It is not enough that the conduct is merely consistent with the terms of the alleged binding agreement, the evidence must positively indicate that both parties considered themselves bound by that agreement.”
The proposed novation in this instance is conceptually a relatively simple one, in terms of the substitution of the defendants personally to the rights and obligations of Blacsky, as set out in a written agreement. Moreover, the changed circumstances which are identified as creating legal necessity for some such adjustment to occur is upon the fact of the transfer of the legal ownership of the Verdon Property from Blacsky to the defendants personally. As has been noted, that change did not simply permit of some adjustment of the existing arrangement involving Blacsky, as that company was, upon divestiture of its legal ownership of the Verdon Property, unable to fulfill its obligations under the written agreement.
It is also of significance to understand that on the evidence and although the defendants initially acted through the utilisation of that corporate vehicle to facilitate the arrangements put in place, the dealings had always been essentially between the plaintiff and his wife and the defendants, personally. It is the recognition of the distinct corporate entity which is of significance in terms of the legal necessity for different arrangements, if the status quo was to be continued.
It should be observed now and more generally that there is nothing in the evidence to suggest that either of the defendants, as a director of Blacsky was unauthorised to bind that Company, or the other defendant. Similarly in terms of the common interest of the plaintiff and his wife in the arrangements evidenced by the written agreement, nothing to suggest that one could not act to bind the other in respect of any further agreement. In any event, the question is as to whether the novation, as an agreement of all of the interested parties, is to be objectively inferred from the discerned conduct of these persons.
It is also not a matter, as the submissions for the defendants contend, to simply recognise that as the new legal owners of the property, the defendants would be entitled to recoup rent for the tenancy of it. As has been demonstrated in the evidence, the written agreement inexorably links that right of tenancy to the loans made by the plaintiff and the amount actually paid for rent had become offset by the plaintiff’s entitlement to interest upon the amount loaned to Blacsky. The evidence, including as to what emerges as to issues subsequently arising in 2017 and 2018 and eventually leading to the termination of the plaintiff’s tenancy and ultimate demand for repayment of the loaned amount, supports only a conclusion that those offsetting arrangements as to the separate obligations which arose under the written agreement were maintained throughout, as logical support for the notion of assumption of those rights and obligations of Blacsky, by the defendants.
As has been noted the effect of those offsetting arrangements had been that from 10 June 2008, the plaintiff deposited $753 per month into the Blacsky bank account. Although the legal title to the Verdon Property was transferred to the defendants personally on 8 January 2010, that arrangement continued, with the amount increased to $1,084.54 per month as from 10 November 2010, until 10 January 2012,[78] when that monthly amount was then deposited by the plaintiff into a personal bank account of the defendants and is therein noted to be so paid up to 10 August 2015.[79]
[78]See Ex. 33, Bank Statements for Westpac Business Cheque Account No. 17-7219 at pp 352 and 396.
[79]See Ex. 34, Bank Statements for Westpac Premium Option Home Loan Account No. 39-4656, pp 655 and 759, noting that the original drawing of this bank loan was on 22 December 2009.

Those bank statements also disclose that in respect of each of the monthly payments made by the plaintiff into the account in the name of Blacsky, “ATF The Schebella Family Trust”, from August to December 2011, there is an immediately following internet transfer of that exact amount to the defendants personal account.[80] It may also be noted that that there was in these months of 2011, little by way of other activity in this Blacsky account and that it was reduced to a zero balance on 18 January 2012.
[80]Cf: Ex.33 at pp 384, 388, 390, 393 and 396 with Ex.34 at pp 637-642.
In cross-examination the plaintiff identified an email sent to him by the second defendant on 11 August 2015, with the notation that it was from “Mark & Karen”. It refers to “our discussion yesterday” and evidences arrangements for cancellation of the “auto debit” and the payment of an annual amount for the period to 31 August 2016 on the basis of an increase in the rent component and to the previous monthly amount of $1,084.54, calculated to be $14,834.48.[81]
[81]T 3-35.1 – 3-36.15; Ex 24.
Whilst it is understandably emphasised for the defendants that there is an absence of direct evidence from the plaintiff, who bears the onus of proof, as to any particular discussion with the defendants as to the novation of the agreement relating to the Verdon Property, neither is there any acceptable alternative explanation provided by either defendant for what changes were discussed and put in place as a consequence of the transfer of title.
The plaintiff’s evidence is that he was told about the transfer of title, but he was not sure when that occurred.[82] He also identified that he had retained an unsigned copy of an RTA General Tenancy Agreement, with handwritten details in respect of a tenancy granted in the Verdon Property, to the plaintiff and his wife, for the period 18 May 2010 to 18 May 2011 at a rental of $400 per week. As is to be accepted, it was the effect of the plaintiff’s evidence that he was given this document by one or other of the defendants, but he was otherwise unable to explain the circumstances, except to identify the other calculation sheets which have been noted,[83] as referable to the amounts he paid.[84]
[82]T 1-63.20-35.
[83]See paragraph [51], above.
[84]T 1-63.37 – 1-64.30 and Ex.9.
He explained that the required payments were made by direct deposits he organised to the bank account nominated by the defendants but expressed unawareness of any change in account details, as follows:[85]
[85]T 1-65.35 – 1.66.14.
“MR WHITE: So Mr Schebella, you were – you showed your – or you indicated to the court that you had some bank records showing you transfer money to Blacsky?---Yeah.
Was there a point that you can recall where you started paying rent elsewhere, other than to Blacsky?---Well, whether money went other where, I don’t know. It was still paid to Mark and Karen - - -
I see?--- - - - to their account.
All right. So how did you know where to pay it to?---I had the account number and so on.
Okay?---I just direct debit from the bank.
All right?---From my account, I mean.
And who would provide you with the account number and the – and the details of where to transfer it to?---They did.
All right. Do you recall that changing at any stage over this period?---Sorry.
Do you recall that changing at any stage over this period, in terms of - - -?---
What do you mean? The rental – the amount of rent?
No. The details that Mark and Karen gave you as to where you were to pay? ---No. I don’t know. It could’ve changed, but I’m not aware of it.”
The plaintiff then identified the document marked as Exhibit 11,[86] being a gmail dated 10 August 2017, sent, as he described, to him by “Mark and Karen”. The contents include a copy of an earlier email to the plaintiff, dated 6 August 2016 and sent from an email account of the second defendant, which reads:
[86]T 1-66.15 – 1-67.26.
“Hi Dad,
As per our discussion here is a copy of rent details.
Also, the bank details are:
M&K Schebella
Westpac
BSB - 734003
Account - 526078
Total 12 months = $14834.48”.
As sent on 10 August 2017, the following is included:
“Hi Dad,
Confirming payment of rent for 8 Verdon St, Golden Beach in the amount of $14834.48.
Rent is paid until August 2018.
Talk soon.
Mark & Karen”.
The plaintiff then confirmed the passing of his wife in April 2018 and that around that time there were further discussions as to the increased rental and his expressed response that he “…. could rent a property more – of more value than the one that I was living in for the figures that they presented to me there”.[87] It would appear that around this time other siblings of the first defendant had become involved in respect of the affairs of the plaintiff and the plaintiff identified an email he had sent to his daughter Cecelia on 21 May 2018, which included a copy of his email sent to the email address of the second defendant, four minutes earlier, in the following terms:
“Dear Mark & Karen,
A simple solution to the Rent problem. How about you reimburse me the $225000, that we invested in “Blacksky Family Trust”, plus interest of say 1% and the outstanding $10,000. This should pay the rent for me for me (sic) at least the next 5 or 6 years. Your thoughts?
Dad”.[88]
The plaintiff explained that the reference to “the outstanding $10,000” was what then remained unrepaid from other advances he had made to the defendants in varying amounts “over the years”.[89]
[87]T 1-67.29-44.
[88]Ex.12.
[89]T 1-67.29 – 1-69.10.
Having identified his payment of rent up to August of 2018, the plaintiff then identified some further documentation, which as the plaintiff explained and should be accepted, despite the dispute raised by the defendants, as emanating from the defendants. The preparation and presentation of such documentation is logically consistent with the circumstances otherwise objectively established and what has been earlier noted as the pattern of dealings between the parties in respect of the plaintiff’s occupation of the Verdon Property. The plaintiff identified the documentation, which is Exhibit 13, as being brought, in a stapled format by the defendants, to at meeting at the Verdon Property and being discussed, without his agreement to what was being proposed. First, the document contains a sheet which refers to the Verdon Property and is headed:
“RENTAL DISCUSSIONS WITH KEVIN CHARLES SCHEBELLA               as at 31ST August 2018”.
The contents then set out what is described, respectively, as “SCENARIO 1 RENT PAID IN CASH” and “SCENARIO 2 RENT PAID FROM LOAN ACCOUNT”. Relevantly it is to be noted that:
(i)in each scenario there are calculations which are premised upon a weekly rental amount of $560 (noted to be referable to rental appraisal by two real estate agencies and not to include water usage charges) and a stated allowance of 2% per annum “interest” on what is stated to be a “loan” in the amount of $225,000.00, once again including an offsetting calculation in respect of such obligations to present a yearly amount, payable on 31 August 2018, of $24,620.00; and
(ii)the distinction between the scenarios is that;
(i)       in scenario 1, the “CLOSING ACCOUNT BALANCE if pay $14620.00” is recorded as $225,000.00”, with the payment of the amount of $14,620.00 due on 31 August 2018 allowing for the reduction of the payable on that date, by $10,000.00; whereas,
(ii)     in scenario 2, the prepared typewriting presents an “APPROXIMATE CLOSING BALANCE AFTER 12 MONTHS” of $210,380.00, by subtracting $24,620.00 from what is recorded as an “OPENING ACCOUNT BALANCE (INCLUDES $10K)” of $235,000.00. There is also some handwriting which may be accepted as the plaintiff said to be that of the second defendant and put there at their meeting at the Verdon Property, demonstrating the same amount, of $14,620.00 (effectively coming from the loan in the amount of $225.000.00), having regard to the subtraction of $10,000.00 from $24,620.00.
Accompanying those scenarios was a proposed written agreement labelled “DEED” and which may be observed to be in similar format to the agreement executed on 13 November 2004, except that it was proposed to be between the defendants personally (referred to as “MKS”) and only the plaintiff (referred to as “Kevin”). Notably, the first proposed clause was:
“1.This agreement between Kevin and MKS cancels all previous agreements made concerning the subject matter within this agreement, where Kevin was a party to such agreement.”
The proposed consideration was expressed as:
“2.MKS hereby grants a tenancy at will to Kevin to reside in the property so long as the terms and conditions of this Deed are fulfilled.
3.In consideration of the matters set out in paragraph 1 hereof, Kevin will loan MKS such amount as is agreed upon by MKS and Kevin from time to time.”
The proposal included, as clauses 4 and 5, an adaption of each of the earlier clauses as to the respective obligations for the payment of rent and interest,[90] except that allowance was made for an option of payment of rent by way of reduction of the loan and in the event of failure of agreement as to the applicable rate of interest on the loan, the rate was expressed to be referable to “the terms and conditions of the 90 day term deposit rate offered by the Commonwealth Bank of Australia, at that time”. Otherwise, there was some substantial difference in the proposed clause dealing with termination, as follows:
[90]See clauses 3 and 4, as set out in paragraph [14], above.
[8]Either party shall be entitled to terminate this Deed upon either of the following events occurring:
a. Upon either party giving one hundred and twenty (120) days written notice of termination to the other party.
b. Upon the death of Kevin,
whereupon the outstanding balance of the loan by Kevin to MKS shall be repaid to him or his estate within 120 days.[91]
This proposal also contained a clause requiring the defendants to provide a quarterly statement of account and was expressed to commence on 1 September 2018.
[91]Ex. 13 (exert produced as typed, without reference to handwritten annotations).
The plaintiff then identified another general tenancy agreement with the defendants in respect of his occupation of the Verdon Property, executed by each of them on 16 January 2019.[92] Relevantly, it is to be noted that the term of this agreement is expressed to commence on 1 September 2018, as a periodic agreement without any end date, and at a rental amount of $530 per week. The plaintiff also identified:
(i)That he signed, also on 16 January 2019, a document provided by the defendants, headed “KEVIN CHARLES SCHEBELLA RENT FROM 1^st September 2018 Statement”, which followed the familiar pattern of calculation of the rent payable from 1 September 2018 at a rate of $530 per week (calculated to a monthly amount of $2296.66), and the offsetting of an amount of $1138.59 for interest for three months to 30 November 2018, to present an “Amount owing to pay rent to 31^st Jan 2019” of $344.71, on the basis of the recording of the progressive reduction of an opening balance of $10,000.00.[93]
(ii)A copy of a netbank transaction receipt for the transfer of $344.71 to a bank account of the defendants on 16 January 2019.[94]
(iii)A copy of a netbank transaction receipt for the scheduling of a monthly transfer of $2296.66 to the same bank account of the defendants as from 1 February 2019, which contains references to having been recorded on 16 January 2019.[95]
(iv)A copy of an email effectively sent to both defendants on 23 January 2019, in the following terms:
“Mark, we have set up the Rent payments incorrectly. We had agreed that the monthly payments were to be paid out of the Loan Account ($125,000.00) which you hold, not from my bank account. Therefore, I will have to cancel the arranged monthly payment for the account. We must have become a little confused when we did the payments for the Rental Bond. Would you please send me a quarterly statement on the Loan Account as agreed.”[96]
[92]T 1-74.13 – 1-75.15, Ex. 14.
[93]T 1-75.27 – 1-77.37, Ex. 15.
[94]T 1-77.43 – 1-79.6, Ex. 16.
[95]T 1-79.19 – 1-80.9, Ex. 17.
[96]T 1-80.15 – 1-82.17, Ex. 18.

The plaintiff explained that the reference to “$125,000.00” in Exhibit 18 was an error and as is apparent from the other contemporaneous documentation identified by the plaintiff there is consistent reference to the loan being in the amount of $225,000.00. Otherwise, the plaintiff explained that he moved out of the Verdon Property in May 2019 and relocated to Yeppoon and that before he moved out, he did “discuss the $225,000.00” with the defendants in terms that he “wanted the refund … because it had been invested in Verdon Street.” His recollection is that they didn’t agree because it had “something to do with Blacsky”.[97]
[97]T 1-87.45 – 1-88.27.
The loan in the sum of $10,000.00 is not disputed, nor that there was agreement for the repayment of that loan to be offset against rent.[98] It is also accepted that Exhibit 15 is a document prepared by the defendants to reflect the implementation of that agreement.[99]
[98]T 3-92.40 and T 4-107.40 – 4-108.3.
[99]T 3-98.7 – 3-99.25 and T 4-120.12 – 4-122.47.
There is, however, dispute about to what the amount of the credit for interest relates. In contrast to the plaintiff’s evidence, that it is in respect of the loan in the sum of $225,000.00, the defendant’s each purport that it was a calculation for interest on a total sum of $30,000, comprised of the $10,000.00 loan to them and a further amount of $20,000.00, which had been provided as a “funeral plan” for the plaintiff and his wife but repaid shortly after the death of the plaintiff’s wife earlier in 2018. No issue in relation to the “funeral plan” was raised in the cross-examination of the plaintiff and there was no attempt in the evidence of either defendant to otherwise explain the basis of the calculation of this amount of interest.
For the plaintiff, there is a submission which demonstrates how it can be attributed to a calculation, differing only by 33 cents, upon the basis of application of the 2% per annum rate proposed in Exhibit 13, calculated upon a total sum of $235,000.00 for 90 days from 1 September to 30 November 2018.[100] Despite the contentions raised for the defendants,[101] in the context of what is to be concluded as to the evidence in respect of the provenance of Exhibit 13, this is an appropriate submission in relation to the likelihood that this calculation included a component in respect of the loan of $225,000.00 earlier made to Blacsky.
[100]Plaintiff’s written submissions, filed 20/6/23, at [123]-[125] and Schedule B.
[101]That the document which is Schedule B was neither sworn to, disclosed nor put to either defendant in evidence (Defendant’s supplementary written submissions, filed 2/8/23, at [69]). As is contended for the plaintiff (Plaintiff’s supplementary written submissions, filed 16/8/23, at [63]-[64]) this is a submission by way of mathematical calculation premised upon an asserted view of the evidence. Further and whilst the exact proposition which is represented in the calculation premised upon the total principal sum of $235,000, was not put to either the defendant, respectively at T 3-98.10 – 3-99.17 and T 4-120.12 – 4-122.47, the cross-examination was suffice to raise the contention that this calculation was premised upon inclusion of the amount of $225,000.00.
The defendants each deny the preparation and presentation of the proposals encompassed in Exhibit 13. Just as has been noted to be the position in respect of their similarly unsuccessful attempts to distance themselves from other documents confirmatory of their adoption of the position of Blacsky, after the transfer of the legal ownership of the Verdon Property to them. In contrast to their evidence, the evidence of the plaintiff, in which he maintained through cross-examination a position that these proposals had been presented to him by the defendants at a meeting at the Verdon Property around the end of August 2018,[102] is to be accepted as being logically consistent with the surrounding circumstances and more objective facts. In particular:
(i)as noted above, earlier there had been acknowledgement that rent had been “paid until August 2018” and clearly an issue arose following the death of the plaintiff’s wife, as to the rental amount;
(ii)the first defendant accepted that there was a meeting, including the second defendant, at the Verdon property about 31 August 2018, as might have been expected in the context of the past dealings between these parties in respect of the arrangements in respect of the Verdon Property,[103] whereas the second defendant maintained that she had not been at such a meeting but proffered, in cross-examination, an unlikely suggestion that the three of them attended a meeting with a solicitor on 26 September 2018;[104]
(iii)the form and content of the documents is consistent with being documentation produced and presented by the defendants, consistently with their acceptance of their production of Exhibit 15;[105] and
(iv)the interest of the defendants in the arrangements in respect of the plaintiff’s occupation of the Verdon Property, the history of those arrangements and the evidence as to the resolution of a position, at the rental amount of $530 per week and the evidenced adoption of the effect of what had been proposed as an option in Exhibit 13, in January 2019. As is contended for the plaintiff, there is an absence of plausible explanation otherwise for the proposition of a higher rate of rent, at $560 per week in Exhibit 13. Neither is there any plausible explanation upon the defendants’ assertion that they had not seen Exhibit 13 prior to these proceedings, for the effective adoption, in Exhibit 15, of an option contained in it.
[102]T 2-69.4 – 2-87.12 and T 3-37.1 – 3-38.45.
[103]T 3-96.29 – 3-97.37.
[104]T 4-110.1-23.
[105]Again as a matter detracting from her credibility, in the case of the second defendant that concession was not without some unconvincing prevarication; see: T 1-120.12-45.
Neither is there any other explanation to be found in the evidence suggesting some involvement of siblings of the first defendant in respect of the affairs of the plaintiff from around the time of the death of the plaintiff’s wife, including the suggestion that there had been past difficulties between the first defendant and his brother.[106]
[106]T 4-119.14-17.
The plaintiff’s evidence is that he did not think that he received any written response to Exhibit 18 and that it was about 8 May 2019 when he moved out of the Verdon Property, due to his dissatisfaction as to the amount required for rent,[107] and that prior to doing so, he told the defendants that he wanted back the money that “had been invested in Verdon Street” with what he described as lack of agreement by them due to “something to do with Blacsky”.[108] The evidence of the first defendant is that whilst he became aware of Exhibit 18, to his knowledge neither he nor the second defendant responded to it,[109] and he thought that after the plaintiff paid the amount of $344.71, he only paid one further monthly rent payment.[110]
[107]T 1-81.30-47. Cf: T 3-99.30-33, where the first defendant agrees with the proposition that the plaintiff moved out on 9/5/19, as he was told.
[108]T 1-88.1-27.
[109]T 3-99.38 – 3-101.8.
[110]T 3-99.22-28.
By letter dated 14 May 2019, the plaintiff’s solicitors wrote to the defendants and in the context of raising various issues in respect of the past arrangements, demanded repayment of $225,000.00.[111]
[111]Ex. 23.

Contrary to the submission for the defendants, there are a number of circumstances identified by the plaintiff to adequately permit of a reasonable conclusion that such requirements are met:[164]
[164]Plaintiff’s supplementary written submissions filed16/8/23, [40]-[47]
(a)Whilst there is clearly some evident emotion involved in a response to a sister in law, in the context of some interfamilial disharmony, a subject of that disharmony is identified as the very issue in respect of the debt. It is to be noted that this is clearly the subject of the plaintiff’s earlier emails of 21 May 2018,[165]including as sent to inform Cecelia Delbin, and wherein there is the express request: “How about you reimburse me the $225000, that we invested in ‘Blacksky Family Trust’”.
[165]Ex. 12, see paragraph [62], above.
(b)There is no real issue about any aspect of agency and the plaintiff points to case authority for the proposition that an acknowledgment of debt by one of joint and several debtors is binding on all. In context, including what has been noted as to background disharmony between Kevin Schebella junior and the first defendant, it is clear that Ms Delben was also acting on behalf of her father and the fact that there is evidence of an earlier email on 21 September 2018, from the plaintiff, expressly authorising Kevin Schebella junior “to discuss all financial and other matters on my behalf with you … regarding 8 Verdon st Golden Beach”, does not detract from, but rather supports an understanding of the involvement and authority of Ms Delben to also do so.
(c)Further, so much is clear as an understanding emerging from the second defendants text message and her intention to have it brought to the plaintiff’s attention, as she expressed it in conclusion:
“ I’m sending you this as he is in your care, I hope it helps to put his mind at ease.
Lots of love [Heart emoji inserted]
Karen
Ps. I don’t mind if you show Dad this.”
(d)There is no express acknowledgment of any amount of debt, in the words particularly relied upon:
“ Another thing is, you said he is worried about his money. WHY? If he moves out the house will be sold and his money returned. If he passe away, the house will be sold and money put in his estate. IT is his money after all. Nothing has changed.”
But all of the context to which reference has been made as to the dealings between the plaintiff and defendants, sufficiently clearly indicates, as was expressed in the emails of 21 May 2018 (including that as sent to inform Ms Delbin), that it was in reference to the debt of $250,000.00. It is not an acceptable contention, particularly given the reference to the return of the money being linked to the sale of the house that this may have related to the loan of $10,000.00, as is referred to in exhibit 15.
It may also be reasonably concluded that all of the requirements of s14 of the Electronic Transactions Act 2001 are satisfied. As is contended for the plaintiff the form adopted as a text message is immaterial, in the context of the evidence as to the plaintiff’s earlier communications with the defendants by electronic means, albeit by email,[166] and the ready appearance of the authorised involvement of Ms Delben in respect of the very issue which is the subject of the acknowledgment. Whilst it is correctly pointed out that there is no direct evidence that the plaintiff had previously given consent for this express communication to occur, the issue under s 14 (1)(c) is as to consent “to the requirement [for the signature] being met by using the method”. Although prior acknowledgement of such consent might be expected, at least as a matter of prudence and protection of relevant interests, where there is to be a transaction requiring signature to be completed in such a manner, there is no express requirement that this be consent given before the adoption of the method. In these circumstances, the plaintiff’s subsequent reliance upon the method adopted may be sufficient to indicate his consent to it having been unilaterally adopted.
[166]T 1-50.17-21 and Exs. 12 and 21.
However, the last point was not one raised or contemplated in the submissions of the parties and before determining it, an appropriate approach may have been to provide an opportunity for the parties to address the point.
Accordingly, in these circumstances and if it were necessary to do so, it suffices to note that it may have been appropriate to find that the second defendant’s communication on 21 September 2018 to Cecelia Delben, as evidenced in Exhibit 44, was an acknowledgment, binding both defendants, of the outstanding debt to an agent of the plaintiff and therefore capable of engaging s 35(3) of the Limitations of Acts Act 1974.

Is there a deed?

The plaintiff pleads the premise that the agreement executed on 13 November 2004 constitutes a deed for the purposes of s 46C of the Property Law Act. [167] That may be understood as a response to the limitations of action issues raised in the Amended Defence, in that it is contended to then attract the operation of s 10(3) of the Limitations of Actions Act 1974, rather than s 10(1)(a), and therefore a 12 rather than 6 year limitation period.
[167]FASOC, [8(c)].
Whilst this contention was not further developed in the final submissions for the plaintiff, neither was it abandoned. Accordingly, it is not explained as to what if any significance this contention may have had to any of the plaintiff’s claims, including that based on the novated agreement with the defendants, which, whilst, as has been found, adopted the terms of the earlier written agreement, was not itself an agreement in written form. In any event, the pleaded reliance upon s 46C of the Property Law Act (Qld) is problematic, as it was inserted in 2021 and was not in effect at the time the parties signed the agreement titled ‘Deed’, in 2004. The relevant provision governing such an agreement was section 45 of the Property Law Act 1974 (Qld), which provided:
“45       Formalities of deeds executed by individuals
(1)Where an individual executes a deed, the individual shall either sign or place the individual’s mark upon the same and sealing alone shall not be sufficient.
(2)An instrument expressed—
(a)    to be an indenture or a deed; or
(b)    to be sealed;
Shall, if it is signed and attested by at least 1 witness not being a party to the instrument be deemed to be sealed and, subject to section 46, to have been duly executed.
(3)No particular form of words shall be requisite for the attestation.
(4)A deed executed and attested under this section may in any proceedings be proved in the manner in which it might be provide if no attesting witness were alive.
(5)Nothing in this section shall affect—
(a)    the execution of deeds by corporations; or
(b)    how instruments are validly execute under the Land Title Act 1994; or
(c)    the Bills of Sale and Other Instruments Act 1955, section 20; or
(d)    any deed executed before the commencement of this Act.”
The essential problem is that it is not in contention that each signature to the agreement was not attested by at least one witness not being a party to the instrument, as required by the Property Law Act in force at the time of signing the agreement.[168] As is noted in the submissions for the defendants, the issue as to what constitutes a valid deed was examined in detail by Edelman J in Netglory Pty Ltd v Caratti.[169] First and dealing with a similar Western Australian statutory provision it was concluded that “any failure to comply with the requirements of s 9(1)(b) of the Property Law Act has the effect that the Loan Agreement and Guarantee are not a deed”.[170] And further that:
“[144] In light of these authorities, the 'meaning of attestation' which is offered in Norton on Deeds ought today to be uncontroversial. The editors, after citation of copious authority, explain: Attestation means "that one or more persons are present at the time of the execution for that purpose" (i.e. for the purpose of attesting the execution) "and that as evidence thereof they sign the attestation clause, stating such execution" ... The witness must sign as witness and for the purpose of attesting the execution ... and consequently a party to the deed cannot be a witness. (Original emphasis.)”[171]
[168]Ex. 2; T3-24.1-25.
[169][2013] WASC 364.
[170]Ibid, [121].
[171]Ibid, [144].
The document contains only the signatures of the plaintiff and his wife, as parties to the agreement, and those of each of the defendant as directors of and so as to bind Blacsky to the agreement. That agreement between the plaintiff and Blacsky did not then take effect a deed within the meaning of s 45 of the Property Law Act 1974 (Qld).

Application of the Limitations of Actions Act 1974

Therefore, the issue is whether the novated agreement, to which a limitation period might be applicable, is a “simple contract” attracting the attention of s 10(1)(a) of the Limitations of Acts Act 1974, so that such “action shall not be brought after the expiration of 6 years from the date on which the cause of action arose”.
The defendants assert that the relevant date when the plaintiff’s cause of action for the recovery of the debt, arose is no later than the date of the last advance made on 9 August 2007.[172] That is contended in reliance upon the recognition, in Young v Queensland Trustees Ltd, [173] of the principle that the loan of money payable on demand creates an immediate debt. Reference is made to the following statement of the principle, in Ogilvie v Adams:[174]
“The common law has always regarded the fact of indebtedness as a continuing detention by the debtor of the creditor's money, and this whether the creditor brought an action of debt or an action in indebitatus assumpsit. Therefore if A lends money to B, then instantly B is detaining A's money. In order to prevent a cause of action for recovery arising in A instantaneously on paying the money, the parties must expressly contract out of that situation by words clearly inconsistent with that situation. The courts have long since settled it that a mere statement or agreement that the money is repayable on demand (or request or at call) is not sufficient to contract out of that situation where all else that is known of the terms of the contract is that A has paid money to B by way of loan. The lender's cause of action still arises instanter on the receipt of the money by the borrower, so that the lender's cause of action becomes statute barred at the expiry of six years after the receipt of the money.”
[172]Defendant’s written submissions, filed 04/07/2023, [86].
[173](1956) 99 CLR 560, 566.
[174][1981] VR 1041, 1059.
Further, the defendants draw attention to the decision of the Queensland Court of Appeal in Haller v Ayre,[175] in recognition of the rejection, in VL Finance v Legudi,[176] of the debated proposition that the principle referred to in Ogilvie v Adams should be relaxed, the stated conclusion was that:

“This review of the recent case law by Nettle J. confirms that the principle in Ogilvie, in its full rigour, remains securely established in our commercial law.”
[175][2005] 2 Qd R 410, [32].
[176][2003] VSC 57, [53].

Subsequently in Haller v Ayre,[177]it is stated in respect of the principle recognised in Ogilvie:
“The true position is that when a written instrument contains no more than a bare promise to pay upon demand, that evidences or constitutes a loan simpliciter. The limitation period in respect of such a loan, whether it is evidenced in writing or not, is taken to run from the date of the advance.”
It may be observed that the reference to “no more than a bare promise to pay upon demand” is to be seen as referable to earlier notation of some distinctions drawn in earlier authorities as to the application of the Ogilvie principle and as arising from the judgement in Ogilvie.
[177][2005] 2 Qd R 410, [34].
First and in respect of the judgement in Ogilvie, it was observed that:
“[21]Fullagar J distinguished the wording of the written instrument in the case before him from language apt to create a condition precedent to the exercise of the right to repayment:
‘In my opinion the acknowledgment … cannot be construed as meaning anything other than: 'I have received from you '31,600 upon a loan of that species which is called a loan repayable on demand'. And the law says (and has said for a very long time) that that description of loan (repayable on demand or repayable on request) is used in contradistinction to loans where something must be done, or must happen, in order to constitute a cause of action in the lender for recovery of the money. In truth, a loan repayable on request (or on demand, or on call) is 'a loan simpliciter'. It is quite different if the parties choose to say 'being a loan upon terms that the money shall be repayable on three days notice' or (which is the same thing) 'upon terms that the money shall be repayable three days after demand made'. The law is settled that where a loan is said to be of that kind which is recoverable on request, or on demand, it means of that species which is continuously recoverable at all times from the moment of the creation of the relationship of debtor and creditor.’
[22]Later in his judgment, Fullagar J cited the example of Murphy v Lawrence where the written instrument acknowledging the existence of a debt went on to provide that, pending demand for the whole of the original sum, payments were to be made every quarter. Referring to the decision of Turner J in that case, Fullagar J explained that:
‘It was only the reference in the terms of the contract itself to [quarterly payments] pending demand that led his Honour to decide that this meant that, until some event happened, instalments only were to be paid, and it was this feature (entirely absent in the present case) which led him to distinguish the clear authorities and to hold that the reference to demand qualified the promise to pay.’" [178]
In a footnote to the first passage from the Ogilvie decision to which reference was made, it was further observed that:
“His Honour recognized, of course, that if the terms of the loan provide that demand for repayment is a condition precedent to the right to recover payment, a demand is a necessary element of the right of action, and time will not start to run until demand is made. See Lakshmijit s/o Bhai Suchit v Faiz Mohammed Khan Sherani [1974] AC 605 at 616 - 617.”[179]
[178][2005] 2 Qd R 410, [21]-[22] (citations omitted, except to note the reference to Ogilvie v Adams [1981] V. R. 1041, 1051-2 and 1058).
[179][2005] 2 Qd R 410, [21], footnote 7.
The following is also observed in Haller v Ayre, in respect of the effect of the principle determined in Ogilvie and the subsequent acceptance of the principle in Australia:
“[26]It is apparent from the foregoing that the ratio decidendi in Ogilvie is the proposition that, where moneys are lent on terms that the loan is repayable "on demand", the consequential debt, and the associated cause of action, arise instantaneously at common law. That proposition has been accepted in a number of different Australian jurisdictions as a correct statement of the law.
[27] In CE Heath Underwriting & Insurance (Australia) Pty Ltd v Daraway Constructions Pty Ltd Batt J (who had actually been junior counsel for the defendants in Ogilvie), when considering when a premium became payable under a contract of insurance, noted that:
‘When an insured has notified the insurer and given the necessary particulars under Condition 10 (later 11), the premium is immediately calculable. As it is payable “forthwith on demand” no actual demand is necessary and it is payable from that time: Ogilvie v Adams [1981] VR 1041 and cases there cited.’
[28] In Drinkwater v Caddyrack Pty Ltd (No 3), Young J accepted the correctness of the decision in Ogilvie and explained that:
‘The reason why that is so really comes from the ancient idea that a loan of money, which constituted a debt, was a deposit of specific coins that the borrower was obliged to restore at any time. The nearest present day example is where one borrows one's neighbour's lawn mower. The lawn mower is returnable on demand, but one should have it ready at any time for the owner who may reclaim it whenever he or she wishes. If one looks through the early cases such as those relied on in Norton v Ellam, in particular Rumball v Ball (1712) 10 Mod 39; 88 ER 616, one can see that this is the basis of the principle. So that, “I promise to pay on demand” means “I am ready to pay at any time”. This line of thinking extends from 1712 to the present day and I need only mention Jackson v Ogg (1859) Johns 397; 70 ER 476; Ogilvie v Adams [1981] VR 1041 and DFC New Zealand Ltd v McKenzie [1993] 2 NZLR 576."
….
[30] Other recent cases in which the principle in Ogilvie has been accepted include Brott v Grey and Switz Pty Ltd v Glowbind Pty Ltd. Recently, in Mackenzie & Anor v Albany Finance Ltd McLure J said:
‘Where there is a simple loan of money, the debt is due and payable immediately and thus the cause of action therefore arises immediately upon the loan of the money. This position can be unchanged notwithstanding an express agreement making the loan repayable on demand, on request or on call: Young v Queensland Trustees Ltd (1956) 99 CLR 560 at 566; Ogilvie v Adams [1981] VR 1041. If, however, the agreement between the parties is that the loan is repayable only upon the happening of a certain event or upon compliance with a condition precedent to liability, the debt is not immediately due and payable and the cause of action does not arise until the happening of the event or compliance with the condition: Atkinson v Bradford Third Equitable Benefit Building Society (1890) 25 QBD 377. An agreement may provide that the amount of the loan is not repayable until a demand is made, in the sense that the making of the demand is a condition precedent to liability to repay, and in that case the cause of action does not arise until demand has been made: Joachimson v Swiss Bank Corp (above); Re Brookers (Aust) Ltd (in liq); Brooker vPridham (1986) 41 SASR 380 at 382. However, the banker and customer relationship is regarded as an exception to the general rule relating to simple contracts. It is now regarded as settled law that, subject to any express term to the contrary, it is an implied term of a contract between a banker and its customer that moneys owed by a banker on a current account do not become due and payable until a demand is made for the money: Joachimson v Swiss Bank Corp (above), Australia and New Zealand Banking Group Ltd v Douglas Morris Investments Pty Ltd [1992] 1 Qd R 478; Re Australia and New Zealand Savings Bank Ltd; Mellas v Evriniadis [1972] VR 690 …’"[180]
[180][2005] 2 Qd R 410, [26]-[30].
Subsequently and in leading to the statement as to the review undertaken by Nettle J confirming “that the principle in Ogilvie, in its full rigour, remains securely established in our commercial law”, there was express adoption of the analysis of Nettle J, in rejection of the submission that the approach in Ogilvie “should now be taken to have been relaxed” and “that the appropriate test was to consider whether it was reasonably open to infer that the parties would have agreed that the cause of action to recover the money loaned would not accrue until a demand had been made”, which included the following:
"[45] Certainly, in Gleeson v Gleeson, Bryson J criticised the reasoning in Ogilvie on the basis that Fullagar J had referred to the issue before him as turning on a question of law. As Bryson J put it:
'Fullagar J was of the view that the meaning of the words in a written document recording the terms of the loan when standing alone was a clear rule of law; with respect, it may be doubted whether the rule is a rule of law, as the need to construe the instant document according to its terms can never be escaped.'
[46] But if I may say so with respect, the criticism is misdirected. Read as a whole, Fullagar J's judgment leaves no doubt that the exercise is always one of construction. The point which Fullagar J made about the 'rule of law' is simply that, in undertaking the exercise in construction, one needs remember that the meaning of the expression 'on demand' is so much settled by rule of law that it is to be read as 'immediately due', unless there be express words or necessary implication to establish contrary intention. As Fullagar J put it:
'…the meaning of the words in such a writing [scil, a contract of loan] are settled by as rigid a 'rule of law' as that rule of the common law which establishes that, in a will… 'to my issue who shall be living at my death', the word 'issue' means 'descendants of every degree' and does not mean merely 'children'. But the contract rule, like the wills rule, is a rule of construction in the sense that other words being part of the contract may drastically alter what would otherwise have been the meaning of the words in question… Of course the speculative builder may say, in his contract or in his acknowledgment, that the money is to be repaid when the houses are sold… And those circumstances are themselves of the kind which may provide the law with criteria on which to imply if necessary into the requirement of the demand some requirement of reasonableness in the nature of notice.' (Emphasis added.)
….
[49] In any event, Gleeson v Gleeson is a case about the construction of a written loan contract, in which the express terms of the contract yielded a clear implication that notice must be given before the debt would be due. That is not this case. There is nothing in Gleeson v Gleeson that supports the existence of some broad principle of construction of the kind for which VL Finance Pty Ltd contends which is applicable to the facts of this case.”[181]
[181][2005] 2 Qd R 410, [31], in reference to VL Finance Pty Ltd v Legudi [2003] VSC 57, [46]-[49].

As is contended for the plaintiff, the express terms of the written agreement executed on 13 November 2004, are to be construed as requiring notice, as a condition of repayment, as a further reflection of the interrelationship of the rights and obligations of the parties in respect of the occupancy of the Verdon Property and the advances made by the plaintiff, as the respective consideration for the agreement, in the following terms:
“6.Kevin and Bernice shall be entitled to terminate this Deed upon any of the following events occurring:
a. Upon giving ninety (90) days written notice of their intention to require redemption of the loaned funds granted to Blacsky save that the redemption of the loan shall not prima facie disentitle the right of Kevin and Bernice to occupy the property save that the tenancy will thereupon become a week to week tenancy capable of being terminated by giving twenty-eight (28) days written notice one party to the other.
b. Upon the death of either Kevin or Bernice (or both) at the option of their executors to terminate the tenancy whereupon the monies loaned by Kevin and Bernice to Blacsky shall be repaid ninety (90) days after receipt of written notice by the executors of either or both Kevin or Bernice.
Accordingly, that agreement is not one to which the Ogilvie principle is applicable, including as it has been found to have been novated as to the personal liability of the defendants and otherwise continued upon the same terms, as from no later than 10 January 2012. It is not therefore necessary to further consider any implications of the application of the Ogilvie principle to that novated agreement.
It is, in these circumstances, appropriate to conclude that no cause of action in respect of the debt under the novated agreement arose until 90 days after demand for repayment was made and there is no suggestion in the evidence of any such demand, prior to May 2019. Accordingly, there is no basis upon which s 10(1)(a) of the Limitations of Acts Act 1974 is applicable to exclude recovery of the outstanding debt.

Conclusion

Apart from the rejected contentions in relation to the earlier advances of the plaintiff there was an unsupported and unacceptable assertion in the evidence of the second defendant as to a repayment, or drawing out, of $10,000.00, in 2006.[182] Not only is there the absence of specific pleading of this contention, it was not raised with the plaintiff and for the same reasons already noted as attenuating the credibility of the second defendant, it is inconsistent with the later acknowledgements in the documents so clearly related to the more objectively established subsequent and ongoing dealings of the parties.
[182]T 4-77.1 - 4-82.10 and cf; T 4-14.5 – 4-16.25 and 4-30.25 – 4-34.47.
Accordingly and consistently with the extent of such acknowledgements in the documentation which has been identified above, the plaintiff has proven that the outstanding debt for which the defendants are personally liable, is in the sum of $225,000.00.
Accordingly, it will be appropriate to give judgment for the plaintiff against the defendants, in the sum of $225,000.00 upon the cause of action as to debt due and owing but not otherwise. The parties will have an opportunity to address the form of order to be made in this respect and as to any further or incidental orders.

CITATION:	Schebella v Schebella & Anor [2025] QDC 16
PARTIES:	*KEVIN CHARLES SCHEBELLA* (Plaintiff) v MARK ANDREW SCHEBELLA (First Defendant) and KAREN JANE SCHEBELLA (Second Defendant)
FILE NO/S:	121/2019
DIVISION:	Civil
PROCEEDING:	Civil Claim
ORIGINATING COURT:	District Court of Queensland
DELIVERED ON:	28 February 2025
DELIVERED AT:	Maroochydore
HEARING DATE:	20 and 21 February, 3 and 5 May 2023 and 5 July 2023 (with further written submissions filed on 2 and 16 August 2023)
JUDGE:	Long SC DCJ
ORDER:	There will be judgment for the plaintiff against the defendants, in the sum of $225,000.00 upon the cause of action as to debt due and owing but not otherwise, with the parties having opportunity to address the form of order to be made in this respect and as to any further or incidental orders.
CATCHWORDS:	CONTRACTS – IMPLIED TERMS – NOVATION – where the plaintiff seeks to recover debt pursuant to a written agreement, made in 2004 in respect of interfamilial arrangements regarding the occupancy of a residence and advances made by the plaintiff to a company of which the defendants were the directors – where no relief is pursued against the subsequently deregistered company – whether the written agreement was relevantly varied – whether the implication arising from the conduct of the parties in respect of the arrangements is that the written agreement was novated so that the defendants assumed the rights and liabilities of the company under that agreement TRUSTS LAW – whether there was wrongful distribution of assets so as to engage the application of s 113 Trusts Act 1973 (Qld) CORPORATIONS LAW – whether there was a breach of trust so as to engage the application of s 197 Corporations Act 2001 RESTITUION – money had and received – whether there is any established cause of action for restitution, by the defendants, of monies originally advanced to a company LIMITATIONS OF ACTIONS – DEEDS – whether reliance upon a relevant limitation period was sufficiently pleaded or identified for the purposes of the trial – whether or not the agreement executed in 2004 took effect as a deed pursuant to s 45 of the Property Law Act 1974 (Qld) – whether the plaintiff’s cause of action is for a debt which is repayable on demand, attracting the principle discussed in Ogilvie v Adams [1981] VR 1041 and s10(1)(a) of the Limitations of Actions Act 1974 – whether the cause of action in debt was subject to conditions under the agreement so that the cause of action arose upon demand not made before May 2019 – whether there has been an acknowledgement of debt such as to engage s35 of the Limitations of Actions Act 1974 and s14 of the Electronic Transactions Act 2001
LEGISLATION:	Corporations Act 2001 (Qld) s 197 Electronic Transactions Act 2001, s14 Limitations of Actions Act 1974 ss 10, 35, 36 Property Law Act 1974 (Qld) ss 9(1), 45, 46C Trusts Act 1973 (Qld) s 113
CASES:	Byrne v Australian Airlines Ltd (1995) 185 CLR 410 Commonwealth Bank of Australia v Barker (2014) 253 CLR 169 Edgar and Anor v Ron Kingham Real Estate Pty Ltd [1999] 2 Qd R 439 Gambaro Pty Ltd v Rohrig (Qld) Pty Ltd [2018] QCA 327 Haller v Ayre [2005] 2 Qd R 410, [32]. King Tide Company Pty Ltd v Arawak Holdings Pty Ltd [2017] QCA 251 Lumbers v W Cook Builders (2008) 232 CLR 365 Netglory Pty Ltd v Caratti [2013] WASC 364 McMahon v National Foods Milk Ltd [2009] VSCA 153 Ogilvie v Adams [1981] VR 1041, 1059 Pan Ocean Shipping Co Ltd v Creditcorp Ltd [1994] 1 WLR 161, 166. Tszyu v Fightvision Pty Ltd; Fightvision Pty Ltd v Onisforou [1999] NSWCA 323 VL Finance Pty Ltd v Legudi (2003) 54 ATR 221 Young v Queensland Trustees Ltd (1956) 99 CLR 560, 566
COUNSEL:	M White for the Plaintiff S Carius for the First and Second Defendant (from 3 May 2023)
SOLICITORS:	Queensland Legal for the Plaintiff Axia Litigation Lawyers for the First and Second Defendant (from 3 May 2023)

investment	plus rent
investment to $225000	50000	$146.00
investment to $235000	60000	$139.00
investment to $245000	70000	$132.00

Date Executed	$/week	Period
17/02/2006	270	17/09/2005 – 31/12/2005 (Exhibit 19)
17/02/2006	290	01/01/2006 – 17/09/2006 (Exhibit 19)
18/09/2006	310	18/09/2006 – 18/09/2007 (Exhibit 40)
18/05/2008	370	18/05/2008 – 18/11/2008 (Exhibit 20)