Srecko Juric-Kacunic v Stan Vaupotic

[2013] NSWSC 41

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Srecko Juric-Kacunic v Stan Vaupotic [2013] NSWSC 41

Hearing dates:

29, 30 January 2013

Decision date:

30 January 2013

Jurisdiction:

Equity Division

Before:

Sackar J

Decision:

The defendant is indebted to the plaintiffs in the amount claimed by the plaintiffs, together with interest.

The defendant should pay the plaintiffs' costs of the proceedings as agreed or assessed.

Catchwords:

DEEDS - limitation period for causes of action under a deed.

DEEDS - whether the date is essential to the validity of a deed.

DEEDS - whether the deed entered into attracts stamp duty - admissibility of unstamped document in court proceedings.

DEEDS - whether the defendant should be granted relief of his obligations under the Contracts Review Act 1980, the equitable doctrine of unconscionability or non est factum.

Legislation Cited:

Contracts Review Act 1980
Duties Act 1997
Limitation Act 1969

Cases Cited:

Blomley v Ryan (1956) 99 CLR 362
Goddard's Case (1584) 2 Co Rep 4
Petelin v Cullen (1975) 132 CLR 355
Silver Queen Maritime Ltd v Persia Petroleum Services Plc [2010] EWHC 2867
Stern v McArthur (1988) 165 CLR 489
Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165
West v AGC (1986) 5 NSWLR 610

Texts Cited:

R J A Morrison and H J Goolden, Norton on Deeds, 2nd ed (1981) Sweet and Maxwell Limited
Chitty on Contracts, 31st ed (2012) Sweet and Maxwell Limited

Category:

Principal judgment

Parties:

Srecko Juric-Kacunic and Anka Juric Kacunic- Plaintiffs
Stan Vaupotic - Defendant

Representation:

Counsel:
A G Todd and T J Flaherty - Plaintiffs
Self represented - Defendant
Solicitors:
Jordan Djunja Lawyers - Plaintiffs
Self represented - Defendant

File Number(s):

2010/289342

Judgment

Ex tempore (revised 4 February 2013)

The Proceedings

1. The plaintiffs in these proceedings sue the defendant on the basis that over a period of time, from 18 November 1999 to about 20 April 2000, they allegedly loaned the defendant a total amount of approximately $304,500 in sixteen payments, each varying in amount. It is further alleged that on 1 May 2000, at the plaintiffs' request, the defendant executed a deed in the form of a loan agreement in which the defendant acknowledged the receipt of those monies and agreed to provide, if necessary, security for what was described as a loan or loans and to repay the monies on demand. Notwithstanding the plaintiffs having made demands for repayment, no monies have ever been repaid.

1. The defendant in his amended defence raises a number of matters. First, there is a general denial that he is liable.

1. Next, he raises a statute of limitation defence on the basis that the proceedings were commenced more than six years after the cause of action accrued and he calls in aid section 12 of the Limitation Act 1969.

1. Alternatively, the defendant pleads the defence of non est factum; that is, he did not understand what he was signing when he signed the deed or did so upon a false representation of his father namely, that the plaintiffs were in fact providing monies for an overseas investment scheme. In any event, he pleads that he did not understand the deed or intend to accept any liability in the nature of a debt.

1. Next, the defendant contends that the monies were advanced pursuant to a joint venture which was a speculative gamble undertaken along with others and was not, nor was it ever intended to be, a loan. Further, there was never any intention on the part of any person involved in the joint venture that any monies be repaid to anybody.

1. Further, and in addition, the defendant alleges that he suffered from a special disadvantage by reason of his lack of literacy and/or his education and that the provisions of the deed were not adequately explained to him. The defendant contends that it was an unconscionable transaction in the sense that the plaintiffs were aware of his difficulties and took advantage of him and, in addition, he seeks relief under the Contracts Review Act 1980.

1. In their reply the plaintiffs deny the defendant's allegations and in turn rely upon section 16 of the Limitation Act which provides that a cause of action founded on a deed may be brought within a period of twelve years from the date upon which the action first accrues. In addition, they deny the factual basis of the defences, and deny they were knowing participants in a joint venture, and had no intention, as it were, to engage in a gamble or speculative investment offshore as the defendant alleges.

1. During the hearing, the plaintiffs were represented by counsel and a solicitor. The defendant is a litigant in person who has, from time to time, been assisted by his daughter.

The Facts

1. Both the plaintiffs and the defendant tell dramatically different stories. The plaintiffs' accounts are lengthy and they deal with a series of events whereby they allege that, in numerous conversations, the defendant requested monies, from time to time, as loans for the purposes of setting up a panel beating business. Each time more money was requested by the defendant, it was in relation to some particular piece of equipment or some aspect of the proposed business.

1. In broad terms, the defendant, on the other hand, does not indicate he had much, if any, contact with the plaintiffs. His father was the person who he asserts dealt with the plaintiffs in relation to the joint venture, although he did assert that he was present on a couple of occasions when his father, dealt with the plaintiffs about the alleged joint venture, and had some paperwork, in his possession, in relation to the investment. He says, due to the passage of time and the death of his father, he has been unable to locate any of the paperwork that he asserts once existed in relation to the joint venture, which he says his father showed or discussed with the plaintiffs.

1. The plaintiffs are husband and wife. They now reside in Croatia, but in late 1999 they lived in rural New South Wales. An interpreter was sworn in to assist them to give their evidence. The husband was less in need of the interpreter than his wife. Nothing turns on that matter for the purposes of these proceedings.

1. The husband recounts a story that he and his wife in 1999 were friends with the parents of the defendant. They met over ten years earlier, in about 1988. They had become friendly soon after they met, and the couples frequently over that period socialised with each other.

1. The husband says that in about November 1999 the defendant's father made contact with him and asked him whether he could lend his son money to start a panel beating business in Bathurst. The defendant's father told the husband that the son (i.e. the defendant) had a block of land in Queensland, there was land in Slovenia, and that he (i.e. the husband) would be certain to get his money back. That conversation was not capable of being contradicted, partly due to the fact that, clearly, the defendant had no knowledge of it, but, in any event, the defendant's father was unavailable. For reasons I come to later, however, I accept that such a conversation did take place between the plaintiff husband and the defendant's father. That is important because it sets the context in which later conversations and events are to be viewed.

1. The next morning, the defendant met with the plaintiffs at his father's house. The defendant allegedly explained what he was doing in relation to the panel beating business and that he wanted money for that business. The defendant also mentioned that he had a block of land in Queensland. He also told the plaintiff husband, and his wife, that he had a Lamborghini car which he was rebuilding and which he could sell, and a family home in Slovenia which the family would be selling in due course. The plaintiff husband made it clear that he and his wife wanted to resettle back in Croatia, and that he would need the monies repaid soon. He says he was given an assurance to that effect. That conversation has not been specifically denied by the defendant in his evidence, nor did he put to either plaintiff in cross-examination that it did not occur. Again, I accept that it did. It is also important as part of the context in which to view later events.

1. Thereafter, according to the plaintiff husband, was the start of a series of conversations in which the defendant sought monies, in varying amounts, totalling approximately $304,500.

1. The defendant, whilst denying the basic story alleged by the plaintiffs, accepts, for example, that at the relevant time he did have some land in Queensland and he did have what he described as a kit car which looked like a Lamborghini and which I understand he was in the process of rebuilding and did eventually sell. I also do not understand the defendant to deny that he may have mentioned both of those matters to the plaintiffs at some point during relevant time, in 1999 or 2000.

1. There is no doubt that at various points the plaintiffs withdrew amounts from a bank account with the Commonwealth Bank of Australia, and either the plaintiff husband or his wife provided the monies in cash personally to the defendant or to his father. Sometimes those amounts were relatively small, sometimes they were quite large.

1. As I understand the defendant's case, he does not really challenge the receipt, either by himself or perhaps his father, of monies. However he denied that the monies were received in relation to any panel beating business, and he asserted that the overseas investment required transfers of cash via Western Union, and consequently he asserts that each of the cash amounts, although he provides no evidence to this effect, was transferred via Western Union. It may well be that they were; that really does not deal with the issues in the case.

1. As I have already mentioned, the defendant, according to the plaintiff husband, kept asking for more money to meet the defendant's needs. Each time the reason given was in relation to some additional aspect of the proposed panel beating business. I accept the plaintiff husband's version of these events. They were really not challenged by the defendant, although there is a general denial. They involve great detail as to dates and times, admittedly years after the event, but they have in my view an inherent credibility about them, otherwise it would be a most elaborate contrivance on the part of the plaintiffs. I do not accept that it is. As I said, I accept the plaintiff husband's and his wife's version of these conversations.

1. The defendant, I should observe, is in fact, and has been, a panel beater by trade. He says that he sold his business, in around 1996, and in 1999, or thereabouts, was working for his brother-in-law. At the moment, his daughter runs a business in which he is employed, and which he transferred to her at some point in the past, as a birthday present.

1. The defendant asserts that he is illiterate and that he cannot read at all. He has very little, if any, education to speak of. He suffered an illness at or about the time of his birth which, as a result of a brain haemorrhage, has left him with an inability to learn or read. He also asserted in his evidence that he has damage to his eyes, as a result of welding, undertaken as part of his panel beating business.

1. I should say, insofar as the defendant suffers from these difficulties, it has not prevented him over the years from working as a tradesman and as a panel beater and, from time to time, engaging in employment and physical labour. Indeed, from time to time, with the benefit of his then wife, and/or perhaps daughter, he has borrowed monies and engaged in business transactions in relation to the business of a panel beater.

1. I should say that there is simply no evidence that at any time prior to perhaps this litigation could it be suggested that the plaintiffs were aware of any of these problems. There is certainly no documentary material to suggest that they were, nor does the defendant suggest that he or his father ever told, in his presence or otherwise, the plaintiffs about these difficulties that he has, in terms of understanding or reading documents. There is certainly no suggestion, and it was not put by him to the plaintiffs, that such difficulties as he does suffer from are or were at the relevant time readily apparent.

1. The plaintiff husband at all times, it seems to me, and I accept, was concerned to have some paperwork prepared in relation to the loan of the monies. He says that he finally had a conversation with his solicitor, Mr Longman, about preparing such paperwork. I accept his account in relation to his difficulties in, it seems, having Mr Longman galvanise himself to prepare paperwork, in order to substantiate the loan. He says, and I accept, that in about 30 April 2000, he and his wife attended at the solicitor's office with a list of the monies that they had paid to the defendant, which he had taken from his Commonwealth Bank passbook. They left the list with the solicitor. Mr Longman then prepared the document, which has become Exhibit P1 in these proceedings. It is described as a loan agreement, and it itemises the various payments, sixteen in total, and the date upon which they were made and the amounts. In three of those amounts there is some slight variation between the list given to the solicitor and the passbook, but nothing turns upon that.

1. The plaintiff husband said he then collected the document from Mr Longman's office. Importantly, he says that he then rang the defendant and told him that he had a piece of paper prepared to show that monies had been loaned and that he wanted the defendant to sign the document. He says that the defendant said that was fine, and that he, the plaintiff, should speak to his, that is, the defendant's father, and that they should come to his workshop in Bathurst, and he (the defendant) would then sign the papers. I accept entirely that this conversation took place. Again, it was really not challenged by the defendant, although, in general terms, it is consistent that he would challenge it because his theory of the case is so dramatically different from that of the plaintiffs.

1. The plaintiff says, however, and again I accept that this occurred, that he agreed to take that course. I accept, as I have said, that such a conversation took place, and the defendant did not give any detail in his response affidavit in relation to that or, indeed, any conversation that he may or may not have had with either plaintiff, and he certainly did not put in cross-examination to the husband plaintiff that that conversation with him did not take place.

1. The husband plaintiff said that he then spoke to the defendant's father and arranged that he and his wife would go over the next day to have the document signed. On 1 May 2000, the plaintiff and his wife drove to the defendant's father's house, and he and his wife signed the document there. The plaintiff husband says, and his wife agrees, that although the defendant's father witnessed their signature, that is, watched them affix their signatures to the document, he did not, in fact, put his signature on the document at that stage. It was done later at the defendant's workshop in Bathurst. Again, I accept that version of the facts.

1. The defendant's father and a lady called Barbara, whom I understand was not married to the defendant's father, drove together with the plaintiffs to the defendant's workshop at Bathurst. All were assembled in what appears to have been a small room. It may well be that both of the women who were at the meeting stood at the door, but it was an extremely small room. The plaintiff says he handed the document to the defendant in the presence of the others, and asked him to sign. He says the defendant said, "No problems", and then he observed the defendant appear to read the document and, after that, sign the document, and the defendant's father witnessed all signatures on the last page of the document. All of this, he said, took no more than about ten minutes. The defendant agrees he did sign the document, as I understand it, although he says he does not recall doing it.

1. The plaintiff husband says he told the defendant that they had loaned the defendant, basically by that stage, all the monies they had except for about $3,000, and that he needed the money back soon. The defendant's father and Barbara left, together with the plaintiffs, and they all went off and apparently had a cup of tea together. The plaintiff then took the original deed to his solicitor, who made copies of the document. The plaintiff says, and there is no evidence to the contrary, that he provided two copies of the document to the defendant's father, for him and his son.

1. The plaintiff husband then alleges that the defendant, in effect, made himself scarce. He found it difficult to communicate with him and locate his whereabouts, and, again, I accept that evidence. Finally, he located the whereabouts of the defendant, with the benefit of a private investigator, and, again, I accept that evidence.

1. I should add in passing that the plaintiff husband's wife broadly corroborates the various matters I have referred to in her evidence, insofar as she was privy to meetings and conversations.

1. The defendant gives, at best, a sketchy account in his affidavit of what, transpired. It supplies very little, if any, detail of any events or conversations. It was, in fairness to him, it seems, prepared with the assistance of some friend and not with the benefit of a lawyer; although he has from time to time in the past been represented. It seems that no lawyer had assisted him to prepare his version of the evidence. But that said, he said in his evidence that he told his friend to take down the story and record it as he told it to the friend. I accept that, at the time he gave his version to his friend, that was his best recollection.

1. As I have already intimated, I consider, having seen both of the plaintiffs give evidence and the defendant give evidence, I regard the plaintiffs' version of events much more probable, than that of the defendant's. I say that for a number of reasons. It is unsurprising, of course, after the passage of a long period of time, when persons try to recall events many years before, that some failing of memory frequently takes place and people's recollections vary quite considerably.

1. The plaintiffs' accounts, on the one hand, are much more detailed, and I think for that reason are more credible. True it is they have had the benefit of a lawyer, or lawyers, to assist them to put that version together. However, there is corroboration, which is contemporaneous, and which in my mind supports wholly the version or versions of events asserted by the plaintiffs. First, there is no doubt that there were withdrawals of cash from the plaintiffs' Commonwealth Bank account. The passbook indicates quite precisely what cash was withdrawn at various points in time. As I have said, there does not appear to be very much doubt that either the defendant, or the defendant's father, received those cash amounts, from time to time.

1. Importantly, though, the deed, which was prepared on instructions of the plaintiffs, reflects a loan arrangement at or about 1 May 2000. That is entirely consistent as a contemporaneous reflection of the events as recounted by the plaintiffs. It would only be if I were satisfied that the loan document was, in fact, a sham, and was prepared as a result of some contrivance on the part of the plaintiffs, that I would be forced, then, to reject it as a contemporaneous corroboration of their version of events. I am simply unable, on the evidence as a whole, and particularly having heard both plaintiffs to accept that it is anything other than a reflection of the instructions which they gave to their solicitor, Mr Longman, and which he faithfully recorded, admittedly somewhat concisely as the basis upon which the monies were advanced to the defendant.

1. It seems to me that, at the relevant time, the defendant and, perhaps, his father, and others, were desperate to engage in an investment which they seem to have thought was a get rich quick opportunity. That they were gullible and taken in by fraudsters in another country is really not to the point. I accept that the defendant made a number of personal sacrifices and, perhaps, sold belongings of his own, in order to engage with others in the so called investment.

1. The plaintiffs, on the other hand, had a large amount of cash available, but I consider that what happened was that they were prevailed upon by either the defendant's father in the first instance and, ultimately, the defendant, as old and close friends to assist the defendant with his proposed business. The detailed accounts given by the plaintiffs as to the ongoing needs of the proposed panel beating business are elaborate, but they are also quite specific and, as I have said before, they are really not denied by the defendant nor did he suggest to either plaintiff that those versions were invented.

1. I make all the allowances which I should make for the fact that the defendant is a litigant in person and has difficulties, both in relation to, perhaps, reading and comprehension, but if he firmly believed or had any real recollection of events such as to counter the detailed recollection of conversations given by the plaintiffs, I would have expected that in some way or other he would have been in a position to challenge, at least in broad terms, what the plaintiff husband says took place in conversations between them.

1. I was not impressed by the defendant as a witness. He seemed to me to be more concerned with technical defences, such as precisely where the document may have been witnessed by his father rather than challenging or being able to challenge the actual substance of the conversation or conversations. His only real point in cross-examination was trying to establish that his father had some way, somehow, witnessed the document at his father's house, that is, before the defendant had, in fact, signed the document. I do not accept that that is the version of events, as I have already indicated, and I accept that his father whilst he, in fact, physically saw the plaintiffs sign the document, in fact witnessed his son's signature when it was affixed to the document at the Bathurst workshop.

1. I am, therefore, not to prepared to find that the deed was a sham, in any sense. I think it was a contemporaneous record of the basis upon which the plaintiffs intended to advance the monies.

1. I consider that what is likely to have occurred is that the defendant, intent, perhaps, as I have said, with his father and others, on entering this so called investment, either deliberately misled the plaintiffs as to the basis upon which the monies were to be advanced, or certainly were not frank with the plaintiffs about what they were intending to do with the monies once placed into their possession. I reject the defendant's account of what he says occurred and I find myself simply unable to accept his version of events, entirely.

1. The plaintiff called a witness, a Mrs Kancilijia. She was a joint venturer, it seems, in this gamble offshore. She acknowledged that she invested in the scam and that she had lost money. She said, however, that she had never met the plaintiffs, nor understood them to be part of the joint venture. I should say that I accept her evidence unequivocally. It was put to her by the defendant in cross-examination that she had at some point written out a cheque and gave it to one of the plaintiffs because they were all running short of funds. She denied that, and I accept her denial. It was also put to her in cross-examination that she had written out a cheque and delivered it to Bathurst. She had given it, so suggested the defendant, to him and he took it to the plaintiffs and brought back some funds. Again, without going into detail of what the defendant was intending to extract from that witness, she simply denied such events, and, again, I accept her denials.

1. The defendant called a Mr Hunt. Apart from his evidence that the defendant's father, according to him, mentioned the plaintiffs as possible investors, there is simply no evidence from him that supports the defendant in any respect in relation to the case.

1. As I have said, there is no doubt in my mind that the defendant, perhaps sadly with his father, who the defendant described as a gambler, contrived a story to procure funds from the plaintiffs for the purposes of investing offshore. They may have been persuaded by persons who procured money from them that it was a safe investment and they may well have been persuaded they could simply repay the moneys. It was certainly no part of any arrangement, even on the defendant's version, that the plaintiffs were going to be in on any percentage return, as it were, from the overseas investment. It seems to me that the plaintiffs were simply identified as a ready source of available cash.

1. Although the defendant signed the deed, he said he could not read or understand it. He simply said that he was told by his father to sign it and he did so. His father, however, was not illiterate and his father must have read the deed and must have understood that it was an acknowledgment of debt and, further, that the plaintiffs wanted proof of the moneys they had advanced. He certainly knew, according to the defendant, that he and the defendant, were using moneys for this offshore investment and that was the real use they were going to put the funds to.

1. The defendant says as I have already observed that he signed only after he had a conversation with his father who told him simply to sign it. The reason I reject that account is because, as I have already found, both the defendant and his father had conversations prior to 1 May 2000 with the plaintiffs as to the circumstances in which the plaintiffs wanted such a document signed and the reasons why they wanted such a document brought into existence and signed.

1. It may be that on the day in question the defendant could not necessarily have read the document or even comprehended it in its entirety. But I have no doubt whatsoever, given the conversations I have found took place in advance of 1 May 2000, that he understood that the document, in broad terms, was an acknowledgment of debt and it was to formalise the loan or loans which had been advanced to him or his father in the prior months. He could certainly read and understand that his name was on the document, as I understood his evidence, and I do not think he had any particular difficulty in reading the numbers. He must have appreciated that, between he and his father, hundreds of thousands of dollars had been received from the plaintiffs over a period of time. It simply could not have passed his attention that that had occurred.

1. I consider that, on balance, he understood at least the substance of the document he was signing. He understood the importance of it and he understood the reasons why the plaintiffs were insisting that such a document be prepared and that such a document be signed.

Legal Issues

1. There are a number of legal issues that arise in the case with which I will now deal. They appear to me to be as follows: The first, although it is not a matter pleaded by the defendant, is a matter which I think has been fairly raised by the plaintiffs' legal representatives, if only to be put to one side, and that is that the deed is in fact undated. The question is: What are its consequences? The answer is; as a matter of law, none. In both R J A Morrison and H J Goolden, Norton on Deeds, 2nd ed (1981) Sweet and Maxwell Limited, and, if I may add, Chitty on Contracts, 31st ed (2012) Sweet and Maxwell Limited, the authors in both places assert that a date is not essential to the validity of a deed. In both texts there is reference to a 16th century case, Goddard's Case (1584) 2 Co Rep 4, and it is clear authority for the proposition that "[a] date is not the substance of a deed; for though it want a date or have a false or impossible date.... Yet the deed is good".

1. That proposition has recently been confirmed in the High Court in Silver Queen Maritime Ltd v Persia Petroleum Services Plc [2010] EWHC 2867, where Lindblom J said:

"The absence of a date does not of itself invalidate a deed."

His Honour then went on to quote, with approval, the passage to the same effect from the second most recent edition of Chitty on Contracts.

1. Therefore, in my view, correctly as asserted by counsel for the plaintiffs, the absence of a date on the deed is of no consequence. However, I do accept and find that the deed was signed by the defendant and witnessed by his father on 1 May 2000, it having previously been signed by the plaintiffs at his father's house.

1. The next question that arises is: Can the deed be relied upon? And this gives rise to questions of stamp duty law. I should indicate that I have admitted into evidence today a letter from the Office of State Revenue dated 29 January 2013, to the effect that it is the view of that office that the deed is not the subject of any duty, and therefore no duty was payable and/or is payable on that transaction evidenced by the deed.

1. I admitted into evidence yesterday the deed as Exhibit P1. There is no issue but that it is unstamped. Notwithstanding the letter from the Office of State Revenue, I have an obligation to give the matter independent consideration. I have done so. The question therefore is whether the transaction or the loan in particular is such as to attract duty and, if it does attract duty, it would, pursuant to the Duties Act 1997, not be available pursuant to s 304 of that Act:

"for use in law or equity for any purpose and may not be presented in evidence in a court or tribunal exercising civil jurisdiction unless it is duly stamped..."

1. There is an exception to that provision in subsection (2) of s 304 to the effect that:

"if the instrument is after its admission transmitted to the Chief Commissioner in accordance with arrangements approved by the court [or if]...the name and address of the person so liable for duty is forwarded, together with the instrument, to the Chief Commissioner in accordance with arrangements approved by the court or tribunal"

then the court or tribunal is able to accept the document.

1. Under the Duties Act, certain transactions, including secured loan transactions, will attract duty. However, a simple transaction under which money is lent, without security, does not, in my view, appear to attract duty pursuant to the Act. The loan agreement here does not create a security interest in favour of the lender, in my view. Security would only be provided according to the terms of the deed if and when required. It has never been required. In such circumstances, in my view, independently of the view of the Office of State Revenue, there was no impediment in the plaintiffs using to the fullest extent possible the deed in these proceedings and I so rule.

1. The next issue that arises is a limitation point which has been pleaded by the defendant or his prior legal representatives. I have dealt with this in passing already. Section 12 of the Limitation Act is pleaded against the plaintiffs, on the basis that the action was not brought within six years of the accrual, on one view of it, of the cause of action. However, the cause of action here is maintained on a deed and pursuant to s 16 of the Act, such an action can be maintained if brought within 12 years of the accrual of the action. In my view, that section has been complied with and again there is no substance in the limitation point. In my view, the plaintiffs were entitled to bring and maintain their action on the deed.

1. The next point that arises is the defendant's defence pursuant to the doctrine of non est factum. I have already made findings that, in my view, given the conversations the defendant had prior to his executing the deed certainly with the plaintiff husband but I am prepared to accept most probably with his own father, he understood in broad terms the nature of the document he was being asked to sign on 1 May 2000. He understood, in broad terms, even though he may not have been able to read and comprehend the actual document itself, that it related to the moneys which had been advanced to him, and that it was described at the top as a loan document. I accept in any event that he would fully have understood that that was the purpose of the document and that it was being brought into existence and signed, as I said, by him, to formalise and acknowledge that he received those moneys as a loan. He could read his name on the document, as I have already said, and I do consider in any event he was capable of understanding the substance of what he was putting his signature to.

1. In the decision of the High Court of Australia in Petelin v Cullen (1975) 132 CLR 355 at 359, the Court comprising Sir Garfield Barwick CJ, McTiernan, Gibbs, Stephen and Mason JJ said:

"The class of persons who can avail themselves of the defence is limited. It is available to those who are unable to read owing to blindness or illiteracy and who must rely on others for advice as to what they are signing; it is also available to those who through no fault of their own are unable to have any understanding of the purport of a particular document. To make out the defence a defendant must show that he signed the document in the belief that it was radically different from what it was in fact and that, at least as against innocent persons, his failure to read and understand it was not due to carelessness on his part. Finally, it is accepted that there is a heavy onus on a defendant who seeks to establish the defence."

1. In a more recent decision of the High Court in Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 at 177 the High Court was at pains to indicate the importance of persons contracting with each other and the affixing of a signature. The Court remarked that, consistent with the objective approach to contracts, it is a matter of some significance when a person places a signature on a document, and in the absence of fraud or some other special circumstance, a person cannot escape the consequence of signing a document by saying that he did not understand it. The Court went on to observe that unless a person was prepared to take the chance of being bound by the document, whatever it might be, it was for the person to protect himself by abstaining from signing the document, until he understood it and was satisfied with it.

1. In any event, on the facts of this case, as I have already found, I do not consider the doctrine of non est factum is available to the defendant, for the reasons I have already indicated.

1. The next matter that arises is whether the arrangement was unconscionable and/or whether the defendant should be relieved of the arrangement pursuant to the Contracts Review Act. By reason of the factual findings I have made, I am of the view that it was neither unconscionable on the one hand, nor can the defendant, in my view, call in aid the Contracts Review Act on the other for the purposes of being relieved of his obligations under the deed.

1. So far as the Contracts Review Act is concerned, the primary focus of a Court in considering such a claim is to determine if a contract or a provision is unjust, having regard to the public interest and to all the circumstances of the case. That is pursuant to s 9 of that Act.

1. Under section 7(1) of the Act, a contract may be unjust in the circumstances existing when the contract was made. The contractual provision may be unjust, simply because it imposes an unreasonable burden on a person when it is not reasonably necessary for the protection of the legitimate interests of persons seeking to enforce it. Injustice may also flow because the claimant did not have the capacity to make an informed or real choice whether or not to enter the contract.

1. The contract may be unjust because of its terms or consequences, or its effects may be unjust. McHugh JA, as he then was in West v AGC (1986) 5 NSWLR 610 said:

"Any contract or contractual provision not excluded from the operation of the Act and which the court considers is unjust in the circumstances existing at the time when it was made, may be the subject of relief under the Act... If a contract or one of its relevant provisions is neither unfair nor unreasonable so far as the applicant is concerned, it is difficult to see how the existence of inequality in bargaining power or lack of independent advice, for example, can render the contract or provision of the contract unjust."

1. In the circumstances of this case, in my opinion, the Contracts Review Act has simply no application. The document is straightforward. It was and was intended by all parties, and I accept and find even the defendant himself, to be a recognition and acknowledgment of moneys advanced. It provided that moneys may be repayable upon demand and it also provided that moneys, or rather the moneys might be required to be secured from time to time. I do not find any of the terms unjust. Nor do I find or would I be able to find, in my view, objectively that the circumstances point to any injustice at the time the defendant undertook to put his signature on the document and be bound by it.

1. The next question is whether or not the transaction nonetheless might be regarded as unconscionable, notwithstanding the defendant is unable to call in aid the Contracts Review Act. Mason CJ in the decision of Stern v McArthur (1988) 165 CLR 489 said as follows:

"Furthermore, to accept the respondents' submission and extend relief against forfeiture to instances in which no exceptional circumstances are established would be to eviscerate unconscionability of its meaning. The doctrine is a limited one that operates only where the vendor has, by his conduct, caused or contributed to a situation in which it would be unconscionable on the vendor's part to insist on the forfeiture of the purchaser's interest."

1. In an earlier case of Blomley v Ryan (1956) 99 CLR 362, Kitto J said:

"The fact that the defendant's condition was the result of his own self-indulgence could make no difference, for, as is shown by Cooke v Clayworth, the principle applied is not one which extends sympathetic benevolence to a victim of undeserved misfortune; it is one which denies to those who act unconscientiously the fruits of their wrongdoing."

1. The facts are quite antithetical to any notion of unconscionability. The plaintiffs have not acted, in my view, in any way that could be described as having engaged in any wrongdoing. They were not aware of any disability that the defendant was suffering from. In any event, the plaintiff husband made it abundantly plain to the defendant and his father prior to the execution of the document, that he simply wanted formalised that some $300,000 odd had been loaned to the defendant over a number of months and that he wanted a clear acknowledgment that that was by way of a loan. To attempt to describe that as unconscionable is simply absurd and that doctrine has no operation in the facts of this case.

Conclusion

1. For the above reasons, I find that the plaintiffs have made out their case and, accordingly, the defendant is indebted to the plaintiffs in the amount claimed by the plaintiffs, together with interest.

1. I will order that, as a result of my findings and judgment, the defendant should pay the plaintiffs' costs of the proceedings as agreed or assessed.

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Amendments

05 February 2013 - decision date is 30.1.13 and ex tempore date (decision date revised to 4 February 2013)

Amended paragraphs: cover page and page 1

Decision last updated: 05 February 2013