Volanne Pty Ltd v International Consulting and Business Management (ICBM) Pty Ltd

This case concerned an appeal by Volanne Pty Ltd against findings made by a Master regarding loans advanced by International Consulting and Business Management (ICBM) Pty Ltd. The dispute centred on whether interest was payable on these loans, and if so, at what rate and how it should be calculated. The appeal was heard by Refshauge J, Perry J, and Walmsley AJ.

The primary legal issues before the court were whether the Master erred in finding that interest was payable on the loans, and alternatively, whether the agreed interest rate was the Westpac indicator lending rate plus 2%, as opposed to 8%, and whether it was to be calculated as compound interest. The court also considered the onus of proof for establishing an agreement for interest and the significance of contemporaneous documents given the passage of time and the credibility of witnesses.

The court acknowledged that the onus lay on ICBM, as the lender seeking to recover interest, to prove the existence of an agreement for interest at the particular rate and method of calculation. It noted that the Master had failed to provide reasons for finding the interest rate to be the Westpac indicator lending rate plus 2%, placing the appellate court in a difficult position. The court also highlighted the Master's reliance on contemporaneous documents due to the unreliability of witness memory after eleven years and credibility issues identified with both Mr Godfrey and Mr Fragopoulos. The Master had found that the loans made after 1 July 2001 were admitted, subject to minor matters, as were repayments. However, the Master's finding that the loans prior to this date were investments in a joint venture rather than loans was not challenged.

The court ordered that within 21 days of judgment, the parties were to file draft orders, agreed or otherwise, giving effect to the reasons. If so advised, the parties were also to file and serve brief written submissions on the appropriate order as to costs within the same timeframe.