State Securities Pty Ltd and Karas v Dromi (No 2)

[2011] VCC 506

IN THE COUNTY COURT OF VICTORIA Revised

Not Restricted

AT MELBOURNE
CIVIL JURISDICTION
COMMERCIAL LIST

GENERAL DIVISION

Case No. CI-08-00228

STATE SECURITIES PTY LTD	First Plaintiff
(ACN 079 829 495)
and
TOM KARAS	Second Plaintiff
v
MARTHA DROMI	Defendant

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JUDGE:	HIS HONOUR JUDGE SHELTON
WHERE HELD:	Melbourne
DATE OF HEARING:	3 March 2011
DATE OF JUDGMENT:	8 April 2011
CASE MAY BE CITED AS:	State Securities Pty Ltd and Karas v Dromi (No 2)
MEDIUM NEUTRAL CITATION:	[2011] VCC 506

REASONS FOR JUDGMENT
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Catchwords: Claim for brokerage fees – intention to create legal relations – payment in kind – waiver – validity of assignment – Edwards v Skyways Ltd [1964] 1 WLR 349; Maxwell & Anor v Moorabool Developments Pty Ltd & Anor [2004] VSC 392; Equuscorp Pty Ltd v HGT Investments Pty Ltd (2004) 218 CLR 471; Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165; Darmanin v Cowan (2010) NSWSC 1118; TZ Metroof Pty Ltd v Nalinga Steel & Roofing Supplies Pty Ltd [2001] VSCA 141; Agriculture & Rural Finance Pty Ltd v Gardiner (2008) 238 CLR 570; Sharrment Pty Ltd & Ors v Official Trustee in Bankruptcy (1988) 82 ALR 530; Briginshaw v Briginshaw (1938) 60 CLR 336.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr I W Upjohn	Lewenberg & Lewenberg
For the Defendant	Mr T J Sowden	Gary Prince
HIS HONOUR:

1 I handed down judgment in this matter on 26 June 2009 (“the first judgment”). On 7 October 2010, the Court of Appeal set this judgment aside – [2010] VSCA 264. Paragraph 3(1) and (2) of the Order made by the Court on that date stated:

“1)

It is declared that:

a)

on or about 26 May 2005 the Respondent, Martha Tsamis (aka Martha Dromi), executed in favour of the first appellant (‘State Securities’) an Authority of Broker Appointment whereby she authorised and requested State Securities on her behalf to procure an offer of Mortgage Loan; and

b)

pursuant thereto, State Securities procured from Interstar Wholesale Finance Pty Ltd offers of Mortgage Loan of $376,000 and $47,000 (together totalling $423,000) which sums Interstar Wholesale Finance Pty Ltd thereafter advanced to Martha Tsamis by way of Mortgage Loan (‘the second loan’) secured by mortgage over the property situate and known as 90-92 Guest Street, Tootgarook, in the State of Victoria.

2)

It is further declared that:

a)	on or about 2 June 2005 the Respondent, Martha Tsamis (aka Martha Dromi) executed in favour of the first appellant (‘State Securities’) an Authority of Broker Appointment whereby she authorised and requested State Securities on her behalf to procure an offer of Mortgage Loan; and
b)	pursuant thereto, State Securities procured from Perpetual Trustees Australia Ltd an offer of Mortgage Loan of $116,000 which sum Perpetual Trustees Australia Ltd thereafter advanced to Martha Tsamis by way of Mortgage Loan (‘the third loan’) secured by mortgage over the property situate and known as 94 Guest Street, Tootgarook, in the State of Victoria.”

2          Paragraph 3(3) of the Order provided:

“3)	The matter is otherwise remitted to the trial judge for a new trial of the following questions, with respect to each Authority of Broker Appointment referred to in paragraph (2):
a) Whether by execution of the Authority, and further alternatively by their conduct in relation thereto, State Securities and Martha Tsamis intended to create a legally enforceable agreement:

(i)       on the terms of the Authority; or

(ii)      on some other and what terms;

b) If the parties intended to create a legally enforceable agreement the Authority, whether:

(i) the parties agreed that the Procuration Fee for which the Authority provides could be paid or satisfied by the provision of services;

(ii) if so, whether the fee was so paid or satisfied in any and what amount;
c)	If the parties intended to create a legally enforceable agreement on the terms of the Authority, whether State Securities subsequently waived the Procuration Fee to any and what extent.
d)	Whether there is now due any and what amount of the Procuration Fee which has not been waived or satisfied.
e)	Whether the purported assignment of 29 June 2007 from State Securities to the second appellant, Tom Karas, of State Securities’ rights under the Authority is valid and enforceable:

(i) at law; or

(ii) in equity; and

f) Whether State Securities or Tom Karas is entitled to judgment for any and what amount of its or his claim.”

3          It was common ground that the reference in the third line of paragraph 3(3) to “paragraph (2)” should read “paragraphs (1) and (2)”.

4          Paragraph 3(4) of the Order provided:

“It is directed that the new trial of the questions aforesaid shall be had upon the evidence already adduced, without the adduction of any further evidence, but with such further oral and written submissions as the trial judge may consider fit.”

In accordance with this paragraph, counsel for each party made both written and oral submissions.

5          I turn to consider the questions posed in paragraph 3(3)(a)-(f).

Paragraph 3(a) Intention to Create a Legally Enforceable Agreement

6          The onus is on the defendant to show that there was no intention to create a legally enforceable agreement. This onus is a heavy one. In Edwards v Skyways Ltd [1964] 1 WLR 349, at 355, Megaw J stated:

“In the present case, the subject-matter of agreement is business relations, not social or domestic matters. There was a meeting of minds – an intention to agree. There was, admittedly, consideration for the company’s promise. I accept the propositions of counsel for the plaintiff that in a case of this nature the onus is on the party who asserts that no legal effect was intended, and the onus is a heavy one.”

7          In Maxwell & Anor v Moorabool Developments Pty Ltd & Anor [2004] VSC 392, at paragraph 258, Habersberger J followed Megaw J and confirmed that a heavy onus was placed on a party contending that there was no intention to create a legally enforceable agreement.

8          In Equuscorp Pty Ltd v HGT Investments Pty Ltd (2004) 218 CLR 471, at 483, the Court stated:

“The respondents each having executed a loan agreement, each is bound by it. Having executed the document, and not having been induced to do so by fraud, mistake, or misrepresentation, the respondents cannot now be heard to say that they are not bound by the agreement recorded in it. The parol evidence rule, the limited operation of the defence of non est factum and the development of the equitable remedy of rectification, all proceed from the premise that a party executing a written agreement is bound by it. … .”

(my emphasis)

9          To similar effect, in Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165, at 182, the Court stated:

“Legal instruments of various kinds take their efficacy from signature or execution. Such instruments are often signed by people who have not read and understood all their terms, but who are nevertheless committed to those terms by the act of signature or execution. It is that commitment which enables third parties to assume the legal efficacy of the instrument. To undermine that assumption would cause serious mischief.”

10        At page 183, the Court referred to:

“… the significance attached by the law to the presence of the signature and also to the absence of any grounds, such as a plea of non est factum, which at common law would render the contract void and of any grounds, such as misrepresentation, which might attract equitable relief … .”

11        In the judgment in this matter, the Court of Appeal stated, at paragraph 52:

“It may be said that a conclusion that legal relations were not intended is difficult to reconcile with the fact that the respondent signed the agreement. The fact that the respondent said that she ‘signed documents put before her by the second [appellant] without reading them’ because at the time she was ‘applying for many loans’ tends to suggest that both parties thought that signing the agreements was required to give legal effect to their agreement that the first appellant would broker loans for the respondent. The broker agreement contains a “privacy consent” authority which was required to be completed in order for the borrower’s information to be provided to a lender, to enable a loan to be approved. The agreement also contains the respondent’s authority for the first appellant to instruct the lender to deduct the brokerage fee from the proceeds of the loan.”

12        As is apparent, courts, for good reason, normally give effect to signed agreements and the defendant has a difficult task in seeking to satisfy me that the Authorities of Broker Appointment dated 26 May 2005 and 2 June 2005 (“the Authorities”) were not intended to create legally enforceable agreements.

13 Mr Sowden, who appeared for the defendant, conceded, in accordance with the judgment of the Court of Appeal (at paragraph 52), that the Authorities had two purposes: firstly, a consent for the purpose of the Privacy Act which was required before information could be provided to a prospective lender to enable a loan to be obtained; secondly, an Authority for the first-named plaintiff to act as broker to procure the loan and to be paid a procuration fee. He submitted that while there was an intention to create legal relations for the first purpose, there was not for the second purpose.

14        I accept the submission of Mr Upjohn, who appeared for the plaintiff, that it is not possible to separate out the two purposes for which the Authorities were signed and to conclude that the Authorities were only partly intended to create legal relations. Either the Authorities were intended to create legal relations or they were not. I particularly note that each of the Authorities is signed at the foot of the page which refers to the charging of procuration fees.

15        Secondly, Mr Sowden relied upon the close social relationship between the second plaintiff and the defendant. He referred to cases such as Darmanin v Cowan (2010) NSWSC 1118 where Ward J stated, at paragraphs 204 to 209:

“The Cowans deny that the arrangement reached between them in relation to the occupation of their land was one which was intended to be legally binding.

The arrangement was clearly reached in a social context, between friends. The very dependency Mr Crossland relies upon for the undue influence claim is predicated on there being a close domestic or social relationship.

There is a rebuttable presumption (being a presumption of fact) that arrangements or agreements made in such a context are not intended to have legal force. The rationale or justification for making an assumption that there is no intention to create legal relations in such a situation is that, at the time of making the alleged promise, the parties would not have regarded their arrangements in terms of legal consequences.

The presumption that, due to the nature of the relationship between the parties, they did not intend to create legal relations, has been applied beyond the family context to other social and domestic arrangements (for example, Coward v Motor Insurer’s Bureau [1963] 1 QB 259; Buckpitt v Oates [1968] 1 All ER 1145; Parker v Clarke (at 292)).

In Teen Ranch Pty Ltd v Brown (1995) 87 IR 308, Handley, JA (p 310) indicated that family, social, and domestic arrangements do not normally give rise to binding contracts because the parties lack the necessary intention, referring to Balfour v Balfour [1919] 2 KB 571.

Aitkin LJ in Balfour v Balfour (at 578), gave as an ordinary example of the situation where an agreement between parties does not result in a contract within the legal meaning of that term the situation where there is an offer and an acceptance of hospitality. … .”

16        Here, as I have indicated in the first judgment, there was a very close social relationship between the second plaintiff and the defendant at the time the Authorities were entered into. However, the Authorities did not relate to family, social or domestic arrangements but to a business relationship. In respect of the loan sought pursuant to the 26 May 2005 Authority, the plaintiff made a declaration dated 30 May 2005 stating that the loan was “predominantly for business or investment purposes”.

17        Mr Sowden relied upon the fact that in neither case did the first plaintiff deduct the procuration fees from the settlement proceeds. However, the Authorities, by their very wording, envisaged this may occur. The second plaintiff stated in evidence that the first plaintiff was involved in various business ventures with the defendant, was in a poor financial position at the time, that some of their businesses were being “propped up” by the first plaintiff and that therefore the first plaintiff postponed pressing for its procuration fees.

18        Mr Sowden referred to the fact that the invoices forwarded to the plaintiff for the brokerage fees dated 21 June 2005 and 18 July 2005 respectively did not include the $600 “flat fee” in either instance and that the invoices were forwarded to the defendant at 36 Auburn Avenue, Northcote, whereas her residential address was 3/30 Murphy Street, South Yarra.

19        Mr Upjohn responded that these matters did not derogate from the contractual obligation contained in the Authorities to pay the procuration fees and that further, the Northcote address was used by the defendant for a number of purposes. This was the address shown for her as recorded by ASIC as a director of One Management Pty Ltd of which she was sole director and sole member, and was also shown as her address on an application dated 26 May 2005 to which the Authority of that date relates. Statements from the first plaintiff for this loan were forwarded to this address also.

20        Mr Upjohn also referred to other work performed for the defendant for which fees were charged, namely services provided for Nafpaktos Pty Ltd, the trustee for the Dromi and Tsamis Family Trust and for a loan procured for Direct One Management Pty Ltd.

21        The defendant has not, in my opinion, discharged the weighty onus of disproving an intention to create legal relations imposed upon it.

22        The answer to Question 3(a)(i) is “yes”. There is no need for me to answer Question 3(a)(ii).

Paragraph 3(b) – Provision of Services

23        This defence was variously referred to as “payment in kind” or “a contra arrangement”. The defendant pleads in its Further Amended Defence as follows:

“16

To the whole of the plaintiffs’ claim the defendant says that at all
material times until in or around May 2007;

(a)	the second plaintiff and defendant were close business associates and from time to time provided business and like services for each other without charging for same -
(b)	the plaintiffs controlled the defendant’s finances, had access to her cheque account with the ANZ, organized loans with various corporate entities with which the plaintiff was associated, and organized the repayment of same from accounts held in the name of Martha Dromi; and
c)	entered into a contra arrangements with the plaintiff according to which the defendant (through a company, MDC Enteretainment of which she is sole director) room hire, drinks, stage setup and the like in consideration of the financial services provided by the plaintiffs.

Particulars

The defendant assisted the Second plaintiff in the purchase and

operation of The Metro Nightclub in about June 2006 and

(a)	organized djs for the nightclub, arranged for the appointment of staff and
(b)	assisted the second defendant in the daily running of the nightclub
(c)	distributed flyers advertising the services of the first plaintiff in a nightclub Inflation, operated by the defendant.

The contra arrangement is recorded in an invoice from MDC to

Tom & Irene Karas — State Securities dated 15 July 2006.”

(sic)

24        As appears, Mr Sowden relied upon the close business relationship between the second plaintiff and the defendant at the time the Authorities were executed and the fact that on occasions they each provided services for the other or entities associated with them gratuitously. He relied upon TZ Metroof Pty Ltd v Nalinga Steel & Roofing Supplies Pty Ltd [2001] VSCA 141. There the Court upheld the trial judge’s decision that a defence of set-off was open to the defendant. However, there, as opposed to the present matter, there were actual business dealings between the parties where each supplied the other with goods as a result of which mutual debts arose. By contrast, here there are just generalised allegations of a contra arrangement with no actual amounts stipulated. In my view, TZ Metroof is of little assistance to the defendant.

25        Mr Sowden submitted that the plaintiff provided valuable services for the plaintiffs without payment. He referred to the assistance provided by the defendant for the Metro Nightclub, owned by interests connected with the second plaintiff. The defendant had no interest in the Metro Nightclub. The second plaintiff agreed that the plaintiff had assisted with building notices for the nightclub, assisted in promotional activities for it and in organising the audio system for it. Further, he agreed that the defendant referred clients to the first plaintiff without receiving commission for doing so and provided free tickets to the second plaintiff and his business colleagues for the Crown Showroom.

26        Mr Sowden also referred to a 40th birthday party for the second plaintiff’s wife which was held at Chasers Nightclub. The defendant operated the nightclub and forwarded an invoice for $9,380 for this function to the second plaintiff and his wife dated 15 July 2006. The invoice contained the notation “payment – contra”. The second plaintiff said that when he offered to pay for the function the defendant said to him “Don’t worry about it, say happy birthday to your wife for me”.

27        Mr Sowden also relied upon the fact that the first plaintiff did not seek payment at settlement or for some time thereafter of the brokerage fees.

28        Mr Upjohn relied upon the fact that there was no written or oral agreement that the parties would perform services for each other without charge as alleged. This, in my view, is very relevant.

29        Insofar as the 40th birthday party for the second plaintiff’s wife was concerned, he referred to the fact that the second plaintiff claimed a one half interest in this nightclub. This alleged interest is hotly disputed by the defendant and the matter is the subject of Supreme Court proceedings. Nonetheless, it provides a reason why the second plaintiff might not have paid for the party. Further, the defendant conceded that the invoice for the party “was a bit of a joke”. She stated that the second plaintiff kept asking her for an invoice.

30        Insofar as the services provided to Metro Nightclub were concerned, the general manager at the time of Metro Nightclub, Medhi Mashayekh, who is no longer in the employ of the Metro Nightclub and could be regarded as an independent witness, gave evidence that the defendant was paid $1,000 a week cash by him for her services to Metro Nightclub.

31        Mr Upjohn again relied upon the fact that the plaintiffs had performed work for the defendant for which fees were charged, as referred to in paragraph 20 above.

32        In light of the above matters, I am not satisfied that the procuration fees for which the Authorities provide could be paid or satisfied by the provision of services.

33        I therefore answer Question 3(b)(i) “no”. There is no need for me to answer Question 3(b)(ii).

Paragraph 3(c) – Waiver

34        The waiver defence is pleaded in the defendant’s Further Amended Defence as follows:

“17

In the premises, if, which is denied, the defendant is indebted to the plaintiffs, or one of them, for the brokerage fees alleged then such fees have been waived by reason of the contra arrangement referred to in subparagraph 16(c) and by the conduct of the plaintiffs in:

(a)	failing to assert any claim to brokerage fees at the time of settlement of procured loans either in April 2004, May 2005 or June 2005;
(b)	failing to assert any claim for commission when the loan for $423,000 was settled with the Commonwealth Bank of Australia in or around November 2007; and
(c)	failing to provide the defendant with any invoices in respect of the brokerage fees allegedly incurred by the plaintiff; … .”

(sic)

35        The waiver is based upon the alleged contra arrangement with which I have already dealt and upon the conduct of the plaintiff in failing to assert its entitlement to brokerage fees.

36        In Agriculture & Rural Finance Pty Ltd v Gardiner (2008) 238 CLR 570, at 586, the plurality (Gummow, Hayne and Kiefel JJ) stated that:

“‘waiver’ is a word applied in a variety of senses.”

37        The plurality then analysed the various forms which waiver can take. Mr Sowden, in his written and oral submissions, as I understand them, is relying upon waiver in the sense of forbearance which the plurality in Gardiner refer to, at paragraph 68, as “waiver, or forbearance from exercising a contractual right”.

38        In Gardiner, it was “the Borrower” who sought to rely upon the defence of waiver in the sense of forbearance.

The plurality stated, at pages 592 to 593:

“In support of its submission that the matters alleged in the particulars of the plea of waiver engaged a principle identified as forbearance from exercising a contractual right, the Borrower relied on a number of decisions in which a party's conduct had been held to disentitle it from insisting upon a condition of performance. …

Each of these cases was said to be an example of the common law's response to the concern that a party not approbate and reprobate and of a doctrine which ‘operates where a party in an existing contractual relationship (the promisor) agrees not to enforce a condition, or right, and the other party (the promisee) acts upon the basis that the condition is not being enforced’.”

and at paragraph 71:

“Expressed in those terms, the proposition for which the Borrower contended seems little different from estoppel. The reference to an agreement not to enforce was evidently intended to encompass cases where the promisor represented that a contractual condition would not be enforced. And the reference to the other party, the promisee, acting upon the basis that the condition is not being enforced seems to evoke notions of detrimental reliance identical to those referred to by Dixon J in Grundt v Great Boulder Pty Gold Mines Ltd: that the party asserting the estoppel ‘must have so acted or abstained from acting upon the footing of the state of affairs assumed that he would suffer a detriment if the opposite party were afterwards allowed to set up rights against him inconsistent with the assumption’. Yet the Borrower submitted that forbearance differs from estoppel and accepted that, in this case, his pleading did not raise any defence of estoppel.”

39        Here also, a defence of estoppel has not been raised. The plurality appeared to have difficulty in understanding the concept of forbearance as separate from estoppel.

40        Mr Sowden relied upon the matters referred to above under Paragraph 3(b) – Provision of Services. He submitted that it would be unconscionable for the plaintiffs to enforce the payment of the procuration fees provided for in the Authorities as it had encouraged in the defendant a belief that the first plaintiff would not enforce its strict legal rights under the Authorities to the point of encouraging and/or accepting unpaid services from the defendant and as a consequence was estopped from doing so. In Gardiner, the plurality, after a close analysis of the relevant case law, determined that the defence of waiver in the sense of forbearance was not open to the defendant. I am of the same view here. Here, in my opinion, the defendant has not established that there was a representation that the entitlement to procuration fees under the Authorities would not be enforced. Nor has the defendant, in my view, established any “detrimental reliance”.

41        I conclude that the first plaintiff did not waive the procuration fee. The answer to Question 3(c) is “no”.

Paragraph 3(d) – Procuration Fees Owing

42 It was common ground that if I answered the preceding questions in favour of the plaintiff, the sum owing, pursuant to the 26 May 2005 Authority, was $9,966.00 and pursuant to the 2 June 2005 Authority, the sum of $3,212.00, making a total of $13,178,00. To this sum is to be added interest in accordance with the Authorities at the rate set by s.2 of the Penalty Interest Rates Act 1983. Interest to the date of hearing, 3 March 2011, was calculated at $8,250.15 and will need adjustment to the date of judgment. Pursuant to the Authorities, the defendant is also liable for the cost of lodging caveats in the sum of $128.00.

Paragraph 3(e) – The Assignment

43        The question posed by paragraph 3(e) refers to one assignment. In fact there were two assignments each dated 29 June 2007 and I approach this question accordingly.

44        As appears from the first judgment, each of the Authorities contains a charging clause in favour of the first plaintiff by which the defendant charges “all property whether real or personal now hereafter held by me” with payment of the procuration fees. The second plaintiff gave evidence that he assigned the second agreement and the third agreement from the first plaintiff to the second plaintiff by two assignments, both dated 29 June 2007. The two “flat fees” of $600 plus $60 GST referred to in each of the Authorities was not assigned. Mr Sowden submitted that these assignments were a sham. Mr Upjohn submitted that the discrepancies in relation to the assignments were readily explicable. The relevance of this issue is that the second plaintiff, on the basis of these assignments, asserts that it has a charge over the plaintiff’s properties at 90 to 92 Guest Street, Tootgarook and 94 Guest Street, Tootgarook which entitled it to lodge caveats over these properties which are still on title and to obtain an order for judicial sale of the two properties. If I should hold that the assignments did not in fact occur, then the second plaintiff does not have these entitlements.

45        I discussed my concerns regarding the assignments in paragraphs 20 to 28 of the first judgment in the context of the credit of the second plaintiff as a witness. These concerns are summarised by the Court of Appeal in its judgment, at paragraph 12, as follows:

“In relation to the assignments, his Honour noted that:

• The assignments were not referred to in the original Statement of Claim filed 22 January 2008.

• No consideration was paid for the assignments.

• The second appellant only had copies of the assignments and not the originals (which he claimed had been sent to the respondent, but which she claimed she had never received).

• The assignments were expressed to relate to agreements made on 21 June 2005 and 18 July 2005 being the dates of invoices sent to the respondent claiming the brokerage fees. These were not the dates of the second agreement (26 May 2005) and the third agreement (allegedly 1 June 2005).

• The amounts of the alleged debts to be assigned pursuant to the assignments did not include the $600 flat fee plus $60 GST.

• After it had purported to assign its interests, on 28 November 2007, the first appellant lodged caveats over the properties at 90–92 and 94 Guest St.

• The second appellant did not make any demand for payment under the assignments.”

46        At paragraph 13, the Court of Appeal stated:

“His Honour was entitled to look with suspicion upon the evidence that any entitlement to the procuration fees had been assigned from the first to the second appellant.”

47        Again, at paragraph 26, the Court of Appeal stated:

“The wrong dates and amounts noted on the assignments, the lack of consideration given, failure to produce the original documents and the lodging of caveats by the first appellant to protect its interests in the properties which had supposedly been assigned to the second appellant five months earlier, raise suspicions about the purported assignments which his Honour was entitled to take into account in concluding that he had “considerable reservations” as to the credit of the second appellant.”

48        Mr Upjohn submitted that the discrepancies were readily explicable in the context of the second plaintiff’s wife who controlled the first plaintiff having wearied of the dispute with the defendant and handing the matter to her husband to “just sort it out”. Instead of engaging lawyers to draw the appropriate documentation, he did so himself and the errors made were those which any layman drawing the documents might well make.

49        Mr Upjohn referred to Sharrment Pty Ltd & Ors v Official Trustee in Bankruptcy (1988) 82 ALR 530, at 544, where Lockart J referred to the caution to be exercised when concluding that a transaction was a sham. He stated:

“… The court is left with little direct evidence and is therefore required to draw inferences from the circumstances surrounding the relevant events. The difficulty I feel about the matter is that to draw the inference of sham for which the Official Trustee contends is to reach a strong finding, and one which cannot be made if another inference is at least equally open. … .”

50        To allege that the assignments were a sham is tantamount to alleging fraud on the part of the second plaintiff. I take account of the need to exercise great caution in being satisfied on such a matter – see Briginshaw v Briginshaw (1938) 60 CLR 336 and Cross on Evidence – Australian Edition paragraph 9050.

51        Applying the principles outlined in Sharrment and Briginshaw, I am satisfied, on the basis of the matters outlined in paragraph 12 of the Court of Appeal judgment, that the assignments were a sham and that they did not take place.

52        I therefore answer Question 3(e)(i) and (ii) “no”.

Paragraph 3(f) – Amount of Judgment

53        The first plaintiff is entitled to judgment in the sum of $13,178.00, together with interest to date and the sum of $128.00 for the lodging of caveats.

Summary

54        The answers to the questions remitted to me for determination by the Court of Appeal are as follows:

a) (i) yes;

(ii)        no need to answer;

b)	(i)	no;
(ii)	no need to answer;
c)	no;

d)

$13,178 plus interest. The cost of lodging caveats in the sum of $128 is also due;

e)

(i)	no;
(ii)	no;

f)

the first plaintiff is entitled to judgment against the defendant in the sum of $13,178 together with interest to date and the sum of $128 for the lodging of caveats.

55        I will hear from the parties on the question of interest, costs and any other matters.

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