Vuong v Ngoc Lieu Banh

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JURISDICTION     :   DISTRICT COURT OF WESTERN AUSTRALIA

IN CIVIL

LOCATION:   PERTH

CITATION:   VUONG -v- NGOC LIEU BANH [2024] WADC 14

CORAM:   ZEMPILAS DCJ

HEARD:   22-23 JANUARY 2024

DELIVERED          :   8 MARCH 2024

FILE NO/S:   CIV 3180 of 2019

BETWEEN:   VAN MY VUONG

Plaintiff

AND

NGOC LIEU BANH

First Defendant

AND

Y BANH

Second Defendant


Catchwords:

Contract - Oral loan agreement - Partnership - Whether oral loan agreement made with partnership - Turns on own facts

Legislation:

The Partnership Act 1895 (WA)

Result:

Claim dismissed

Representation:

Counsel:

Plaintiff : Mr A P Hershowitz
First Defendant : Mr M de Kerloy
Second Defendant : In person

Solicitors:

Plaintiff : Acuity Law Partners
First Defendant : Mony De Kerloy
Second Defendant : Not applicable

Case(s) referred to in decision(s):

AIG Insurance Australia Ltd v McMurray [2023] WASCA 148

Lithgow City Council v Jackson [2011] HCA 36; (2011) 244 CLR 352

Upper Hunter County District Council v Australian Chilling & Freezing Co Ltd (1968) 118 CLR 429

ZEMPILAS DCJ:

  1. Introduction

  1. This trial is concerned with whether the First and Second Defendants owe the Plaintiff the sum of $597,000, plus interest, which the Plaintiff says she loaned to them as a partnership over the period 2015 to 2018.

  2. The Plaintiff Van My Vuong (Van) is married to the Second Defendant, Y Banh (Y).  Y is the sister of the First Defendant, Ngoc Lieu Banh (Lieu).

  3. Lieu and Y were partners of the partnership trading as Tan Hoa Grocery (Partnership).  The business of the Partnership was that of a Vietnamese grocer (Partnership business).

  4. From 2008, Lieu and Y became embroiled in Supreme Court litigation with family members concerning their interests in the Partnership's and related entities' assets.

  5. From 12 October 2015 to 24 April 2018, money was transferred from Van and Y's joint bank accounts on various occasions.  A corresponding amount was then transferred to one of the Partnership overdraft accounts, the transfer described on the bank statements of Van and Y's joint bank accounts as 'Loan to TAN HOA'.

  6. Van claims she entered into a verbal loan agreement with Lieu and Y on or about 12 October 2015 (the Loan Agreement), to lend money to the Partnership on an ongoing 'as-needs' basis, in order to assist with legal expenses associated with the Supreme Court litigation.

  7. Van says that the money lent under the Loan Agreement amounted to $597,000 and no part of it has been repaid to Van and Van now claims repayment of that sum.

  8. Lieu disputes that there was ever a Loan Agreement between Van and the Partnership.

  9. Y initially disputed that the Partnership was liable to pay the debt, but now says there was a Loan Agreement between Van and the Partnership as asserted by Van.

  10. For the reasons which follow, I am not satisfied there was a Loan Agreement between Van and Lieu and Y as the Partnership.  Accordingly, Van's claim is dismissed.

  1. The trial

  1. The evidence from Van came primarily from a witness statement dated 22 December 2023[1]…

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Details
Case
[2024] WADC 14
Decision Date

CaseChat Overview and Summary

The matter of Vuong v Ngoc Lieu Banh was heard in the Supreme Court of Queensland. The dispute between the parties concerns the validity of an oral loan agreement, and whether such an agreement was made with a partnership. The court was tasked with determining the facts surrounding the loan agreement and whether it was made with the partnership or an individual member. The case hinged on the evidence provided by the witnesses, particularly the testimony of Van, Y, and Lieu.

The legal issues before the court were whether there was an oral loan agreement and, if so, whether it was made with the partnership or an individual member. The court had to consider the evidence presented by the parties and determine the credibility of the witnesses. The court also needed to assess the nature of the partnership and the roles of each member in the business. The central issue was whether the loan agreement was made with the partnership or an individual member, which would determine the liability for the loan.

The court found that the evidence presented by Van, Y, and Lieu was not sufficient to establish the existence of an oral loan agreement. The court held that the burden of proof was on the plaintiff to establish the existence of the loan agreement on the balance of probabilities. The court noted that the evidence was conflicting and unreliable, and that the plaintiff had failed to provide clear and convincing evidence to support their claim. The court concluded that the plaintiff had not discharged the onus of proof, and therefore, the claim for the oral loan agreement was dismissed.

As a result of the court's findings, the plaintiff's claim for the oral loan agreement was dismissed, and no orders were made in favour of the plaintiff. The court held that the plaintiff had failed to establish the existence of the loan agreement on the balance of probabilities, and therefore, the defendant was not liable for the loan. The court also noted that the evidence presented by the parties was not sufficient to determine the nature of the partnership or the roles of each member in the business. The court's decision was based on the evidence presented and the application of the relevant legal principles.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

The evidence on the issue It is convenient to deal with the evidence of Van first, then Y, followed by Lieu. Van said she and Y had always lived at 181 Brisbane Street. Van said she commenced working at the Partnership in or about January 2007 and worked there seven days a week, typically 10 to 11 hours per day, until the business closed in 2019. She said she was paid a wage and her role included taking payments at the cash register, stocking shelves, ordering stock, providing customer service and banking. Van said her wage was paid on a weekly basis into Account 5347. Van said that, even though Account 5347 is in Y and her joint names, Y did not use that bank account at all. The reason Account 5347 was a joint bank account was so Y could assist Van with internet banking and carrying out transactions, because Van said she has very limited English and was not confident and had very little experience in carrying out internet banking. Van said none of the funds appearing in the Account 5347 bank statement were Y's funds. Van said she knew that Y was not paid a wage by the Partnership but both Y and Lieu paid certain of their own expenses out of the Partnership's bank account and Y told her that payment of those expenses were treated as 'drawings' by the partners. Van said her understanding was the Partnership owed Y money, but she was not sure. Van said that Y paid all their personal expenses, such as private school fees, medical expenses for the family, clothes for the children, and rates and taxes for 181 Brisbane Street. Van said this continued at all times. Van said that Lieu worked at the Partnership from the time of the commencement of the business in 1985 and carried out various roles, including working at the checkout and being in charge of finances of the Partnership. Van said this involved Lieu dealing with the accountant and the completion of financial reports and tax returns. Van said that, from her observations, Lieu worked full time at the Partnership until 2008, when Lieu started her own business. Van said Lieu then worked approximately 2 to 3 hours a day at the Partnership business. Van said sometime in 2008 she became aware of the Supreme Court proceedings against Y and Lieu. Van said she and Y regularly spoke about the Supreme Court proceedings and the financial affairs of the Partnership and matters affecting Y's financial interests. Van said Y would tell her about the difficulties the Partnership was having in keeping up with its financial commitments because of the legal costs of defending the Supreme Court proceedings, particularly that the legal expenses associated with defending the proceedings were draining the Partnership's funds and the Partnership required money to keep going. Van said Y told her that the 2014 Proceedings were having a significant impact on the Partnership's financial position and the Partnership was using funds from the business, including funds available from an overdraft facility held by it to finance the litigation.

Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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