Web Wealth Pty Ltd (ACN 096 047 022) v Callipari - [2010] SADC 60

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
WEB WEALTH PTY LTD (ACN 096 047 022) v CALLIPARI
[2010] SADC 60
Judgment of His Honour Judge Tilmouth
6 May 2010
CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - CONSTRUCTION AND INTERPRETATION OF CONTRACTS
Held 1: It is permissible and appropriate to consider post contractual conduct, in so far as it bears upon whether a contract was formed, when it was formed and to identify the parties.
Held 2: The plaintiff was entitled to recovery even though monies were paid into an account of a company, as agent of an undisclosed principal.
Held 3: The plaintiff fails on its claim for money had and received, as it has failed to prove the defendant himself received the subject monies.
Agricultural & Rural Finance Pty Ltd v Gardiner (2008) 238 CLR 570; Lipkin Gorman v Karpnale Ltd [1991] 2 A.C. 548; Finlay v Silcon Industries Pty Ltd (2003) 229 LSJS 14, [2003] SASC 236; Scott v Miller (1837) 132 ER 865, referred to.
Franklins Pty Ltd v Metcash Trading Ltd (2009) 264 ALR 15; [2009] NSWCA 407; Russo v Buck & Ors [2006] SASC 380; Russo v Buck & Anor [2007] SASC 423; Grime v Bartholomew [1972] 2 NSWLR 827, applied.

CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - OFFER AND ACCEPTANCE - ACCEPTANCE - COMMUNICATION
Held: Contractual relations were formed by an exchange of facsimiles, on analogy with the "postal acceptance rule".
Adams v Lindsell (1818) 1B and Ald 682; 106 ER 250, referred to.
Household Fire & Carriage Accident Insurance Co Ltd v Grant (1879) 4 Ex D 216, applied.

CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - CONSIDERATION - WHAT AMOUNTS TO CONSIDERATION
Held: Consideration for the agreement the plaintiff is entitled to enforce resides in the forbearance of the plaintiff in pursung insolvency proceedings, part performance by the defendant and in the potential discharge of earlier obligations.
Dunlop v Selfridge [1915] AC 847 at 855; Olsson v Dyson (1969) 120 CLR 365, applied.

CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - PARTIES - JOINT AND JOINT AND SEVERAL CONTRACTORS - DISCHARGE
Held 1: Properly construed the subject loan agreement was one creating joint, but not joint and several obligation in the borrowers.
Held 2: As the plaintiff elected to enforce against the other borrower under the agreement, it is thereby precluded from enforcing recovery against the defendant.
Held 3: The plaintiff had however proved a subsequent agreement in which the defendant assumed personal responsibility.
Scarf v Jardine (1882) LR 7 AC 345; White v Tyndall (1888) 13 AC 263; Peterson v Moloney (1951) 84 CLR 91; Lombard Australia Ltd v NRMA Insurance Ltd [1968] 3 NSWR 346, referred to.
Adler (t/a Argo Rederci) v Soutos (Hellas) Maritime Corp (The Argo Hellas) [1984] 1 Lloyds Rep 296, applied.
Mobel Brothers & Co Ltd v Earl of Westmorland [1904] AC, considered.

ESTOPPEL - FORMER ADJUDICATION AND MATTERS OF RECORD OR QUASI OF RECORD - FORMER ADJUDICATION - JUDGMENT INTER PARTES - ISSUE ESTOPPEL - IDENTITY OF ISSUES
Held: The issues in Federal Court proceedings for the winding-up of the defendant's company Helimount were so different to those calling for resolution in this case, so that an issue estoppel does not arise.
Kuligowski v Metrobus (2004) 220 CLR 363; Carl Zeiss Stiftung v Rayner & Keeler Ltd (No 2) [1967] 1 A.C. 853; Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589; Ramsay v Pigram (1968) 118 CLR 271; Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485, referred to.
Blair v Curran (1939) 62 CLR 464, applied.

CONSUMER CREDIT - CREDIT PROTECTION - GENERAL - OPERATION OF CREDIT LEGISLATION
Held 1: The Consumer Credit (South Australia) Code does not apply because the borrowing was not for a prescribed "personal, domestic or household purpose".
Held 2: The form of declaration in the subject agreement did not comply with the regulatory requirements, however that breach was of no practical consequence.
Held 3: The failure of the plaintiff to give notice before bringing proceedings was immaterial, and it was appropriate to authorise the within proceedings.
Consumer Credit (South Australia) Act 1995 ss 6, 6(1)(b); Consumer Credit Code of Queensland ss 5(a), 6, 10 & 11; ss 80(2) & 80(4)(c); Consumer Credit Regulations 1995 Qld R 10; Project Blue Sky Inc (1998) 194 CLR 355; Equipment Investments Pty Ltd v MJ Dowthwaite & Co Pty Ltd (1969) 16 FLR 23; Graham v Aluma Lite Pty Ltd (1996) 39 NSWLR 58; Benjamin V Ashikian (2007) ASC 155-086; BHG Nominees Pty Ltd v Ellis Young Investments Pty Ltd (1998) 16 ACLC 1,539; Bell Group Ltd v Westpac Banking Corp (2000) 104 FCR 305, referred to.
Permanent Mortgages Pty Ltd v Cook (2006) ASC 155-082; Emanuele v Australian Securities Commission (1997) 188 CLR 114, applied.

WEB WEALTH PTY LTD (ACN 096 047 022) v CALLIPARI
[2010] SADC 60
The issues

The focus of this proceeding is a loan said to have been made to the defendant on 24 January 2005, by the plaintiff Web Wealth Pty Ltd.[1] As presently formulated, the maximum sum claimed to be owing comes to $4,074,700.14, with interest. There are alternative lesser claims based on other agreements formed later.
[1] Hereafter “Web Wealth”
Mr Callipari denies liability on several bases. He disputes the formation of binding agreements, contests the precise terms of such agreements and denies they render him personally liable if formed, and he says any such agreement infringes the Consumer Credit (South Australia) Code,[2] applicable under South Australian law. What follows is not substantially in dispute. The questions calling for determination are in the main, the inferences to be drawn and what legal conclusions flow, from the proven facts.
Web Wealth ‘loan’
[2] Hereafter “the Code”
The action centres upon what is described as a Deed of Loan Agreement, allegedly dated 24 January 2005, for the principal sum of $630,000,[3] between Web Wealth as “lender” and Helimount Pty Ltd and Mr Callipari the defendant, as the “borrower”. Helimount is not joined in this action, for reasons to become apparent. Mr Callipari is and was the sole director of Helimount. Recital A declares Web Wealth to be the “owner” of the funds. The documents were prepared by North Adelaide Conveyancers, on the instructions of Mr Adrian Stirn a finance broker based in Adelaide, ostensibly on the instructions of Helimount and Mr Callipari. Earlier that month Mr Callipari approached Mr Stirn seeking short-term finance. He told Stirn a cousin faced foreclosure of rural properties by the National Bank, so he proposed “to buy them over”.[4] As he specialised only in home loans, Stirn referred Mr Callipari to Konstantinos Pappas, then an employee and now director of Web Wealth.
[3] Exhibits P1 and P1A
[4] T200.23
It is clear an initial agreement was prepared and executed on 14 January 2005, for a loan of $600,000. This was to be repaid within two months at a rate of six per cent per month, if paid on the due date – the 13^th calendar day – and 10 per cent per month, if not.[5] Translated into dollar terms by clause 3, the interest was $36,000 and $60,000 respectively, per month. These rates reflect the high degree of lender risk associated with the transaction. This arrangement was intended to be of short-term duration, just two months. This particular agreement was executed by Mr Callipari at Stirn’s Adelaide office, in the presence of Mr Stirn. Another “interest free” version of this loan, was not implemented.[6]
[5] Exhibit D9
[6] Exhibit D10
Some days later Mr Callipari sought a further $30,000. Through Mr Stirn, Mr Pappas agreed to provide the additional money. As Mr Callipari lived in Mildura and was unable to return to Adelaide to execute a fresh loan agreement, a second page was inserted in lieu of the original of 14 January, containing the revised principal sum adjusted by hand in Recital B, as can be seen in Exhibits P1, P1A, P1B, D9 and D11. Otherwise the original pages remained intact. The dollar figures specifying the required interest payments remained unadjusted, despite the higher loan of $630,000. Clause 5 of the “Operative Part” also remained constant. This provided:[7]
The Borrower HEREBY UNRESERVEDLY DECLARES THAT this Loan is strictly for Commercial Purposes only and fully understands that it will not have protection pursuant to any Consumer Credit Legislation that may normally apply to such a Loan.
[7] Exhibits P1, P1A, P1B, D9 and D11 emphasis in originals
Source of finance
As it transpires, Mr Pappas arranged for funds to be sourced from various “outside investors”, as he described them.[8] These turned out to be exclusively friends or relatives. Soon after $25,000 cash was received from Mr Callipari. It was allocated to interest accrued over the first month. Later $335,299.83 was recovered by the liquidator of Helimount Pty Ltd.[9] This payment followed an order of a Registrar of the Federal Court of Australia made on 26 July 2006, that Helimount be wound-up in insolvency under the provisions of the Corporations Act 2001. Still later on 6 December 2007, Mansfield J delivered a judgment declaring Web Wealth was entitled to an interest by way of equitable mortgages comprising the proceeds of sale of two Mildura properties owned by Helimount, the titles to which were handed over by Mr Callipari to Mr Pappas, and held as security for the loan of $630,000.[10] The titles to both properties are recorded in Recital B to all versions of the January 2005 loan documentation, as security for the loan.
[8] T52.8
[9] Exhibit P13
[10] Helimount Pty Limited (In Liquidation) v Web Wealth Pty Ltd [2007] FCA 1936 [46]
In point of fact, the funds procured by Mr Pappas were not actually drawn on the account of Web Wealth, except for $30,000. The evidence was that Mr Stirn personally deposited cheques totalling $623,000 drawn on various accounts into Helimount’s Commonwealth Bank account, Findon branch.[11] These were made up of the $30,000 and:
.       $300,000 J. & T. Kouts (Mr Kouts was Mr Pappas’ brother-in-law);
.       $200,000 Nick Papagiannis (a cousin of Mr Pappas);
.$43,000 plus $7,000 cash, Westside TV & Video (a business owned by Stirn’s uncle); and
.       $50,000 from Mr Stirn himself.[12]
[11] Exhibit D1 and P2
[12] Exhibit D5
The Kouts, Papagiannis and Westside cheques were at first undated. Mr Pappas inserted Helimount Pty Ltd in the otherwise blank payee section and dated each, 24 January 2005. He delivered these to Mr Stirn for depositing on that day. This method of payment was adopted because “Mr Callipari needed the funds immediately, we deposited these cheques straight into the account of Helimount.”[13]
[13] T52.23-.25, T90.24-91.3, Mr Pappas
According to the evidence of Mr Pappas, there was a verbal understanding with each investor, to the effect that they lent their respective funds to Web Wealth.[14] None were called to support this arrangement. He insisted the loan was made by Web Wealth itself. What is clear is that the subject funds never passed through the Web Wealth bank accounts. There was some scant evidence as to how the underlying transactions were dealt with in the books of account, to be discussed later.
[14] T52.28-53.15
Subsequent “agreements”
Web Wealth also sues in the alternative, on agreements executed later on. These were allegedly formed in the context of the winding up proceedings in the Federal Court instituted by Web Wealth in November 2005 against Helimount, based it was said on an agreement of 24 January 2005. Those proceedings successfully brought Helimount into liquidation and produced some funds, however there was a significant shortfall. During the course thereof, Mr Callipari sought adjournments from time to time.
On the first such occasion there were discussions outside the court, which produced a handwritten agreement on 24 May 2006, purportedly binding Mr Callipari and Helimount to make a payment to Web Wealth of $1.1m, on or before 5 July 2006 and in default undertaking to sign a consent to judgment in that sum.[15] In that latter event, Helimount and Callipari agreed in addition not to oppose orders winding-up Helimount. However Web Wealth reserved therein all its rights and claims against both “under the said loan agreement of 24 January 2005”. If so paid, that “constituted” a complete discharge by Web Wealth against Helimount and Callipari of any obligation, liability or debt arising from or out of “the said loan agreement of 24 January 2005”. This document was purportedly signed by the solicitors “for and on behalf of” the respective parties, when Mr Callipari was not present.[16] No money was paid pursuant to this agreement, thus bringing into play the default provisions.
[15] Exhibit P3
[16] Refer Exhibits P4-P8 inclusive
On a second occasion, again within the precincts of the Federal Court, another agreement was struck, in essentially the same terms on 12 July 2006.[17] This time Helimount and Mr Callipari agreed “in consideration for the adjournment of the winding-up application heard on 12 July 2006 …”, to pay “a further sum of $100,000 on or before the close of business Tuesday 25 July 2006”, over and above the $1.1m previously promised on May 24. This agreement, also in handwriting, was signed by the respective solicitors purportedly on behalf of the parties, in the absence of Mr Callipari.
[17] Exhibit P9
Course of the trial
The trial in this court proceeded over five days during March this year. At the request of the court, further written submissions were filed by the parties, the latest on 1 April 2010. Both Mr Pappas and Mr Stirn were called in the plaintiff’s case. The defence called no witnesses. A number of documents were tendered on both sides. Although the oral evidence remains important, the case very much depends upon inferences arising from the documentary evidence, supplemented as it was by the evidence of these two witnesses. In essence their position was, particularly that of Mr Pappas, that the monies raised in the manner detailed above, were effectively on lent by Web Wealth to Mr Callipari and Helimount, and were therefore Web Wealth owned funds. Mr Pappas said that Web Wealth was to obtain three per cent as its share, with the investors taking the remaining three per cent of total debt, six per cent being the primary lending rate.[18]
[18] T109.3-110.11
At the close of the plaintiff’s case Mr Best of counsel, advanced a submission of “no case to answer”, based principally on the lack of books of account or other accounting evidence demonstrating the establishment of the legal relationship of debtor and creditor, as between Web Wealth and Mr Callipari, and on other associated grounds. The court heard preliminary argument on both sides, in order to tease out the content of the contentions for the defence, to the extent necessary to determine whether or not the defendant should be put to an election, had the submission been fully articulated.[19]
[19] T255-291
At that point the court concluded it was appropriate for the defendant to first elect, should he wish to pursue that course any further.[20] After taking instructions Mr Best elected on behalf of Mr Callipari not to call any evidence, so the trial then proceeded into final submissions. The court so ruled because it became evident that the propositions advanced on behalf of the defence, went further than exposing the complete failure to produce any evidence of legal ownership, but rather extended the questions of inference and weight. This clearly required an election to be made in accordance with accepted practice: Residues Treatment v Trading Co Ltd and Anor, [21] Rasomen Pty Ltd v Shell Company of Australia Ltd.[22]
[20] T291.34-292.8
[21] (1989) 52 SASR 54 at 68-69
[22] (1997) 75 FCR 216 at 217-218, 223
The case for the plaintiff is a relatively simple one. Through Mr Stirn, Mr Callipari and Helimount arranged a loan of $630,000 organised by Mr Pappas on behalf of Web Wealth, paid into the account of Helimount on 24 January 2005. Just where and how the funds were dispersed by Helimount has not been disclosed. This was arranged in haste to suit Mr Callipari’s ends. For all Mr Callipari knew the lender was Web Wealth. He held no interest in the original source of the loan funds.
The defendant denies there is any or alternatively sufficient evidence to prove on the balance of probabilities, that the plaintiff ever lent its own funds in the first place and in the second, that a duly executed contract or agreement was formed to borrow the $630,000 on 24 January 2005 as alleged. He further claims the agreements made in the precincts of the Federal Court, were invalid or unenforceable, at least as against Mr Callipari. At its most basic level, the defendant submits there is no evidence which proves any monies were paid to Mr Callipari, that they were paid by and on behalf of Web Wealth, and that in the scramble of events, no contract was formed binding upon him.
In developing his submission, defence counsel first pointed to the fact that no evidence was adduced from the so called “investors” to establish their own funds were investments in, or loans to Web Wealth. No correspondence or agreements as between them, were generated. Furthermore, the plaintiff’s primary financial records and books of account did not record the subject loan transactions as would be expected if they were genuine. According to defence counsel the evidence proves no more than that the respective investor funds were paid directly into Helimount’s account, except for the one amount of $30,000.[23]
[23] Exhibits D1 and P2
Furthermore it was contended that two cheques, one drawn by Web Wealth for $30,000 and the other by Mr Papagianis of $200,000, were dishonoured and either reissued or represented in early February, so that a contract was plainly not completed on 24 January 2005, as pleaded.[24] Defence counsel further submitted that such books of account as were produced, were secondary records, so the entry in the balance sheet as of 30 June 2006,[25] and the tax return for the year ending 30 June 2005 as well as the financial records for 30 June 2006 for instance,[26] were no better than mere post transaction paper entries, falling short of creating, still less of proving, a legally recognised debtor and creditor relationship.
[24] Exhibit D1
[25] Exhibit D2
[26] Exhibits D3 and D4 respectively
Insofar as some documents purported to record these transactions, such as Mr Pappas’ “session report”,[27] they were nothing more than internal or working documents, rather than historical records and hence of no other than self-serving evidentiary value. Defence counsel contended the evidence of Mr Pappas was unreliable, particularly as he failed to explain why primary records were not kept to substantiate these transactions, his failure to refer to the general ledger until a call for production was made, and because such documents as he did ultimately submit, tend to suggest the investor funds were treated as funds owing by Web Wealth to himself and his wife, as to which he gave conflicting accounts.
[27] Exhibit D8
Preliminary findings
It can be accepted that unsubstantiated records, are no more than book entries, which in themselves contain no proof of underlying transactions, for “an entry in a book of account is not a transaction”: R v Hansford.[28] However it cannot be accepted that Mr Pappas was an unreliable witness just because of the lack of accounting records one might ordinarily expect in such circumstances. Just why proper books were not kept is perhaps puzzling, however there was more than an air of informality and naivety about this transaction, probably because he was dealing with close friends and relatives, rather than standing at arms length to them, not to mention a degree of haste. Mr Pappas had a long history over the years in finance, rising to the level of Branch Manager with the NAB, before establishing his own financial business. He was experienced and knowledgeable in finance and currently runs another business, Rapid Loans. The funds were assembled at short notice at the request of Mr Callipari, and deposited direct into Helimount’s account by Mr Stirn, in good faith.
[28] (1974) 8 SASR 164 at 183 per Hogarth J

In that context it is not surprising at all that they did not find their way into the books of account at the time, although just why they were not written-up later, is another matter. As the various sources of finance were cobbled together hurriedly from trusted sources by Mr Pappas, once again in good faith because the urgency of the situation, it is equally unsurprising that formal documents as between the investors and Web Wealth, were not generated then either. Indeed the impression gained from the whole of the evidence, is that when it came to dealings with family and friends, there were undocumented informal understandings, based on trust, understandings nevertheless that these funds were procured for and on behalf of Web Wealth.[29]
[29] T108.25-109.6
Was an agreement formed?
Various forms of the supposed agreement of 24 January 2005 were tendered in evidence.[30] There is no doubt an initial loan of $600,000 was entered into on 14 January 2005. This conclusion springs in the first instance from the pre-amended versions of Exhibits P1, P1A, P1B, D9, D10 and D11, most significantly Exhibit D9, on each of which can be seen a facsimile transmission of 14 January 2005 from the drafter North Adelaide Conveyancers to Mr Stirn.[31] These were signed by Mr Callipari in Mr Stirn’s office on that day.[32] The “original” was dated 14 January in handwriting by Mr Stirn,[33] when Mr Callipari counter-signed in his presence and Mr Stirn witnessed it as such.[34]
[30] Exhibits P1, P1A, P1B, D9, D10 and D11
[31] T202.18-.31, T205.21-.33
[32] T205.34-207.20
[33] T232.13-.78
[34] T232.36-233.3
In the end the plaintiff rested primarily on the stamped version of the agreement, comprised in Exhibit P1B, as the best and most complete evidence of the contractual arrangements between the parties. The front page is plainly the original of 14 January 2005, as are the pages marked “2” and “3”. The third page contains the original signatures of Mr Callipari and Mr Stirn, placed there in Adelaide on 14 January 2010. The page marked “1” has been redated to 24 January when the investor cheques were deposited, the principal sum changed to $630,000 and the amendments re-executed by Mr Callipari. On this version a substantial portion of another facsimile transmission, has been chopped off at the very top of each page.
Truth be told, following the request by Mr Callipari to increase the principal loan by a further $30,000, the second page of the first agreement was amended by Mr Stirn in handwriting to Recital B, to add “30” immediately after “six hundred” and immediately preceding “thousand”, at Mr Callipari’s request.[35] Stirn then faxed the amendments to Mr Callipari, who re-signed and initialled them on that one page, and then faxed it back to Mr Stirn. The original of this single page must have been kept by Mr Callipari in Mildura. It was not tendered during the trial. Nor was it discovered on his behalf, so this faxed version at the receiving end as transmitted by him, is the next best evidence as to the course of events at this time.
[35] (1818) 1B and Ald 682; 106 ER 250
The facsimile endorsements on Exhibits P1A, which are not for the greater part reproduced in Exhibit P1B, prove that this particular page was faxed as amended by Mr Stirn on 20 January 2005 at 2.28pm and return faxed by “D & A Callipari” at 3.21pm, with his signature and initials placed against the changes. This transmission endorsement is wholly consistent with the evidence of Mr Stirn on this point. This page was then substituted in place of the original. Otherwise the remaining three pages of the earlier $600,000 loan agreement remained intact so that the final agreement was formed by the composite of those pages and the single page inserted later.
His request for more funds and the action of returning the amendments counter-signed, are sufficient to demonstrate Mr Callipari’s assent to that course, and hence to the variation. This manner of dealing was born out the exigencies of the situation, all of Mr Callipari’s making. Just because he did not re-attend personally again in Adelaide to execute the amendment, did not prevent a legally binding agreement from being formed. He certainly intended as much.
There is no reason in principle, especially in an electronic age where e-mail, SMS text messaging and facsimile transmissions are common place in business, why it should be otherwise. In years gone by, the law of contract accommodated the conclusion of contracts under the so-called “postal acceptance rule”, so that offer and acceptance were complete once an acceptance was posted: Adams v Lindsell.[36] Under this principle, acceptance was not compromised by delay in receipt, or even by the loss or destruction in the post, providing the parties contemplated the use of the post as a means of communicating acceptance in order to conclude binding contractual relations: Household Fire & Carriage Accident Insurance Co Ltd v Grant,[37] Tallerman Co Pty Ltd v Nathan’s Merchandise (Vic) Pty Ltd.[38] And so too here was it contemplated by Messrs Stirn and Callipari that the variation would be carried out by the mutual transmission of facsimiles, which accordingly became binding as of 3.21pm on 20 January 2005.
[36] (1818) 1B and Ald 682, 106 ER 250
[37] (1879) 4 Ex D 216
[38] (1957) 98 CLR 93 at 111
Viewed objectively, the post-contractual events on both sides serve to reinforce this conclusion. Generally speaking it is not permissible to consider subsequent words or conduct of the parties, to construe a written agreement: Agricultural & Rural Finance Pty Ltd v Gardiner.[39] This principle does not affect the role of later actions, so far as they bear upon whether a contract was formed, between which parties and when: Franklins Pty Ltd v Metcash Trading Ltd.[40] The first such feature is the sheer fact that $630,000 was paid to Helimount’s accounts, so this is telling evidence of a loan in precisely that sum. The second is the re-payment in cash on 1 February 2005 of $25,000 by Mr Callipari to Mr Stirn received as agent for Web Wealth.[41] Even though this is not necessarily referable to the amount of interest likely to be due and payable by then, it is consistent with the obligation to make the first interest payment falling due on 13 February. It is as well an act of part performance, confirming the existence of a contract, and to some extent one in which Web Wealth was a party. The repayment however throws no light of itself on the personal liability of Mr Callipari, or otherwise.
[39] (2008) 238 CLR 570
[40] (2009) 264 ALR 15, [2009] NSWCA 407 at [13] per Allsop P, Giles JA agreeing at [63] and Campbell JA at [323-327]
[41] T215.29-216.2
However Mr Callipari acknowledged in paragraph 5 of his own affidavit in the Federal Court, that a loan agreement for $630,000 was entered into,[42] and he re-acknowledged the existence of a loan of this kind later in the Deed of Consent to Judgment, discussed later.[43] Furthermore, Mr Callipari and Helimount together endeavoured to obtain re-financing, initially in August 2005 through NFFA Finance Warehouse Pty Ltd to pay out what was described as “his debt” of approx $700,000”,[44] and again in October 2005 through the solicitors RMA of $700,000. These are also indicative of a loan from Web Wealth to him or both.[45]
[42] Exhibit P11
[43] Exhibit P8A
[44] Exhibit P17
[45] Exhibit P18
It is true that a so called 8th condition, “$630,000 was paid into Helimount Pty Ltd”, was added in handwriting by Mr Stirn after that sum was deposited.[46] It is however impossible to appreciate and nor could the defendant explain, why that “endorsement” otherwise invalidated the agreement. It was no more than an historical note added by Mr Stirn to reflect the fact of payment, but that did not itself otherwise compromise the agreement. It simply forms no part of it.
[46] T236.14-238.3
There is more than enough evidence then, to prove on balance that Mr Callipari committed himself and Helimount to a loan of $630,000, for a projected period of two months, at an interest rate of six per cent per month if paid on time and 10 per cent if not, translated to $36,000 and $60,000 respectively, per month. This is exactly the terms embodied in Exhibit P1B ostensibly dated 24 January 2005, but in fact struck by the return facsimile at 3.21pm on January 20, 2005.
Subsequent entries in the books of account of Web Wealth so far as they go, also serve to confirm the plaintiff was the lender. It is to be recalled that following the order of Mansfield J of 7 December 2007, the two Mildura properties the subject of equitable mortgages, were realised. Of the proceeds, $335,299.83 was forwarded to Web Wealth’s solicitors Townsends on 3 January 2008.[47] The general ledger of Web Wealth for the financial year 2007/2008 coinciding in point of time with this distribution, records that after deducting legal fees, Townsends paid them the balance of $286,918.68.[48] The ledger also records that on 8 January 2008, $67,500 was dispersed to Mr Longbottom, who by then had assumed responsibility for the initial Kouts advance.[49] On this very day two lots of $20,000 were further dispersed to the benefit of Mr Stirn’s interests, and Stirn himself directly received $27,500.[50] This distribution suggest underlying liabilities by Web Wealth to those investors.
[47] Exhibit P13
[48] Exhibit D7
[49] Exhibit D7 and evidence of Mr Pappas T169.1-.35, T196.23-197.8, Evidence of Mr Stirn T227.1-.17
[50] Exhibit Dy and evidence of Mr Pappas T169.1-.35, T196.23-197.8 Evidence of Mr Stirn T227.1-17
These disbursements could hardly have been made in this way if there was no obligation as between Web Wealth on the one hand and those investors on the other. They in turn, tend to confirm the conclusion that Web Wealth was the lender. In the result, the combination of subsequent events coupled with the events of January 2005 described above, demonstrate and confirm that it was Web Wealth lending the subject monies. The contention that Web Wealth neither lent money, nor was party to an identifiable agreement, is therefore rejected.
The fact that monies were paid solely into the account of Helimount is simply irrelevant in this regard. The funds were jointly purchased as the contract describes, so just from where they were sourced and for that matter what entity they were paid into, was a matter of indifference to Mr Callipari. The same could have been said had the monies been received to the personal benefit of Mr Callipari; Helimount would remain just as much liable as he was: Russo v Buck & Ors,[51] upheld in Russo v Buck & Anor.[52] In any case Web Wealth was legally entitled to sue for recovery as agent for undisclosed principals: Grime v Bartholemew.[53]
[51] [2006] SASC 380 at [124], Doyle CJ
[52] [2007] SASC 423 at [34], Bleby J, Duggan & Layton JJ agreeing
[53] [1972] 2 NSWR 827 at 833, Allen O’Hearn & Co [1937] AC 213
Joint or several liability?
The next question for determination is whether Mr Callipari in becoming a party to this agreement, was obligated jointly as well as severally along with Helimount. The operative part is contained in the party description, recitals and following clauses:[54]
[54] Exhibit P1B
BETWEEN:WEB WEALTH PTY. LTD. A.C.N. 096 047 022 care of Level 7, 431 King William Street ADELAIDE SA 5000 (hereinafter called “the Lender”) of the one part
AND:HELIMOUNT PTY. LTD. A.C.N. 006 818 917 of 133 Langtree Avenue MILDURA. VIC 3502 and DOMENICO JOHN CALLIPARI of Lot 2 Irymple Avenue NICHOLS POINT VIC 3501 (hereinafter called “the Borrower”) of the other part.
RECITALS:
A.The Lender is the owner of SIX HUNDRED THOUSAND DOLLARS ($600,000.00).
B.The Lender HAS AGREED TO LOAN the sum of SIX HUNDRED THIRTY SIX THOUSAND DOLLARS ($630,000.00) (hereinafter called “the Principal”) …. the Borrower being the Registered Proprietor of the whole of the land in Certificates of Title REGISTER BOOK VOLUME 9593 FOLIO 463 and VOLUME 9933 FOLIO 505 commonly known as LOT 2 CURETON AVENUE MILDURA and 1/162 EIGHT STREET MILDURA respectively in the State of Victoria (Australia) over which land the said sum has been secured by way of 1^st Registered Memorandum of Mortgage of even date between the parties hereto and on the terms specified in this Deed and the terms in the said Mortgage.
OPERATIVE PART:
1.The parties have agreed that the Lender will loan the Principal to the Borrower for a period at the Lender’s absolute discretion PROVIDED THAT it is not less than two (2) calendar months and can be rolled over calendar monthly if the Borrower is NOT in Default under the terms of this Agreement and the said Mortgage.
2.The Borrower hereby agrees to pay interest as per the Memorandum of Mortgage being at the “Reduced Rate” of Six Percent per calendar month (6.00% pcm) where it is paid as scheduled and at the “Normal Rate” of Ten Percent per calendar month (10.00% pcm) where it is paid after the due date.
It can be seen the singular expression “borrower” encompasses two parties, Mr Callipari and Helimount and that the operative part does not distinguish between them in that capacity. This agreement consistently refers to “the Borrower” in the singular case: clauses 1, 2, 3, 4, 5, 6, 7, as well as in the jurat clause. It can also be seen that Recital B refers to two properties said to belong to both. These were in fact registered solely in the name of Helimount.
To this point in time the plaintiff concedes Mr Callipari did not thereby severably undertake obligations as borrower.[55] It does contend however that their respective obligations became joint and several, by virtue of the subsequent agreement of 24 May 2006, so that this January 2005 agreement then “became a joint and several liability”. This contention is considered later. Otherwise the so called 24 January document is utterly silent on the question of whether the borrower’s obligations were intended to be joint and several, or otherwise.
[55] Written submissions 1 April 2010, para 5
The question whether a contract and obligation assumed by two or more parties is joint, or joint and several, is one determined by construing the language employed by the parties so as to ascertain their intention: White v Tyndall,[56] Lombard Australia Ltd v NRMA Insurance Ltd.[57]Here the parties have not expressly adverted to this crucial distinction in this agreement at all.
[56] (1888) 13 AC 263
[57] [1968] 3 NSWR 346 at 349-350
When words are employed indicating each party is to be individually as well as collectively responsible, the situation is clear. Whereas in the absence of such words, a contract is most likely to be construed as imposing joint liability only: Adler (t/a Argo Rederci) v Soutos (Hellas) Maritime Corp (The Argo Hellas),[58] as ordinarily it is expected express reference would be made, if it was intended to create joint and several obligations: Valgas Pty Ltd v Connell.[59] The conclusion is then inescapable that this agreement, properly construed, creates merely joint liability. There is not one expression in form or in substance suggestive of the parties assuming joint and several obligations: William White v Tyndall & Ors.[60]
[58] [1984] 1 Lloyds Rep 296
[59] (1994) 120 FLR 345 at [12]
[60] Above
This state of affairs can have far reaching consequences. Where the liability is joint and several, the enforcing party can pursue all other parties, whereas when it is merely joint, judgment against one bars further action for enforcement against the remaining party(s), who are thereby relieved from their obligations under the contract: Petersen v Moloney.[61] This principle has its origins in the doctrine of election: Scarf v Jardine.[62] It was expressed by Lord Davey in Mobel Brothers & Co Ltd v Earl of Westmorland:[63]
… that by signing judgment against one they have … elected to take that remedy against one, and cannot afterwards sue the other who is not jointly but alternatively liable.
This is so even though the debt remains unsatisfied: Cassell & Co Ltd v Broome.[64]
[61] (1951) 84 CLR 91 at 102
[62] (1882) LR 7 App Cas 345 at 353-354
[63] [1904] A C at 15
[64] [1972] AC 1027 at 1063
In this particular instance Web Wealth has not enforced the debt against Helimount as such. It proceeded all the way to winding-up, based on the successful declaration that it was a secured creditor by way of equitable mortgages. The plaintiff therefore submits it has not “enforced” against Helimount and is not therefore prevented from proceeding against Mr Callipari.
This contention overlooks the fact that in the event Web Wealth received $335,299.83 effectively from Helimount, for all practical purposes due under the subject loan agreement. It might have issued concurrent proceedings against Mr Callipari seeking similar remedies, assuming the Federal Court could entertain the action within its accrued jurisdiction pursuant to s 32 of the Federal Court of Australia Act (1976) (Cth).[65] First recourse against Helimount, was likely to prove the most effective remedy, given that the two secured Mildura properties were registered in its name. Although the plaintiff might have conceivably joined Helimount in these proceedings with leave of the court,[66] such a course would be entirely futile because the capacity of Helimount to satisfy any judgment is entirely exhausted.
[65] And refer to PCS Operations Pty Ltd v Maritime Union of Australia (1998) 72 ALJR 863, Re Wakim: Ex party McNally (1999) 198 CLR 511
[66] Section 471B Corporations Act 2001
The fact remains that Web Wealth elected to proceed as against Helimount alone. Having done so, it has released Mr Callipari from his obligations under the January 20 loan agreement. Accordingly although the court finds a binding agreement was reached on that date, Web Wealth is now precluded from enforcing against Mr Callipari, because it has pursued Helimount at its election.
Had this agreement been enforceable against the defendant personally, questions might have arisen as to the rate of interest. Seen as a short term proposition over about two months, the exacting rate might be justifiable. An interest rate of six percent or 10 per cent per month over a longer period, is clearly quite a different matter. As seen already, the default rate has inflated the sum now due to well over $4m. Justice Mansfield rightly described the rate as “usurious”.[67] This situation might have exposed the plaintiff to reopening an unjust transaction under ss 70 and 71 of the Code, or at common law have led to review as unconscionable, pursuant to s 72. As no points of this kind were taken by the defence, it is unnecessary to pursue them any further.
[67] Helimount v Web Wealth above at [20]
The subsequent dealings
As detailed already, during the course of the Federal Court proceedings, there were at least two attempts at settling matters, by reformulating and crystallising outstanding liabilities. The first of 24 May 2006 was in the following terms:[68]
[68] Exhibit P3, Note original was handwritten
Tuesday 24 May 2006
Agreement between:
Web Wealth Pty Ltd
and
D Callipari and Helimount Pty Ltd
Webwealth, Callipari and Helimount agree as follows:
1.Callipari in respect of his liability to Webwealth will pay to Webwealth the sum of $1,100,000 on or before 5 July 2006 (being clear funds)
2.Callipari will forthwith upon receipt from Webwealth sign a consent to judgment in the sum of $1,100,000 dated 5 July 2006 upon a claim for debt arising out of a loan agreement dated 24 January 2005 and deliver it to Webwealth.
3.In the event that Webwealth does not receive the sum of $1,100,000 as aforesaid, then:
3.1 Helimount and Callipari agree not to oppose the making of orders to wind up Helimount upon the application of Webwealth.
3.2 Webwealth will file the aforesaid consent to judgment in appropriate court proceedings and is entitled to enter judgment in the sum of $1,100,000 against Callipari.
4.Subject to the above, payment of $1,100,000 in accordance with the terms of this agreement constitutes a complete discharge by Webwealth against Helimount and Callipari of any obligation, liability or debt arising from or out of the said loan agreement of 24 January 2005.
5.In the event of failure to pay the aforesaid $1,100,000, by 5 July 2006 Webwealth retains in all respects its rights and claims against Helimount and Callipari under the said loan agreement of 24 January 2005.
6.Upon payment by Callipari to Webwealth in accordance with the terms of this agreement, Webwealth will return forthwith the consent to judgment referred to in paragraph 2 hereof.

It appears at first sight that by this agreement, Mr Callipari personally acknowledges his “liability to Web Wealth”, and personally covenants to pay $1.1m on or before 5 July 2006. The burden of this compact through clauses 1 and 2 falls upon him. There is no positive obligation on Helimount to do anything or rendering it liable – whether jointly or otherwise – should Mr Callipari default. It merely agrees to forbear.
Insofar as it is contended this subsequent agreement somehow converts the 20 January 2005 loan into a joint and several responsibility, it must fail. Although this document recites a number of times “a loan agreement dated 24 January 2005” (clauses 2, 4 and 5), it fails to articulate any further what the “obligation, liability or debt” or “rights and claims” thereunder were, or against whom they existed. Rather it stands as an effective, separate, freestanding arrangement, independent of that reached in January 2005. Far from affirming or reinstating that situation, if anything it replaces it. So construed it fails to alter the original obligations of the parties if not carried out by the payment of the $1.1m, which therefore stand as those identified earlier in the reasons. If carried out, both would be discharged.
There is no difficulty in this instance with questions of joint or several liability. The obligations of Mr Callipari personally and Helimount are very different and distinct. They are spelt out quite separately here, so that it is clear this time that Mr Callipari is solely responsible for the obligations assumed by him under clauses 1 and 2. Indeed the only joint, and in all probability several obligation, is that contained in clause 3.1. That being so, no issues of enforcement against him arises of the kind that afflict the original loan agreement. So construed this is a free standing, mutually exclusive agreement, to be applied according to its terms. Web Wealth has therefore made good its case against Mr Callipari based on the agreement of 24 May 2006. Questions over the authority of Mr Munt to sign on behalf of Mr Callipari raised by the defence, fail for reasons identified later in these reasons.
The defendant submitted that should an original loan not be proved, the subsequent agreements must fall with it. That submission must be rejected, firstly because the court has found a valid contract was formed on 20 January 2005 for a loan of $630,000. Secondly, no reason was identified and no principle advanced, justifying how the subsequent agreements were dependant on the earlier agreement. The point also fails to appreciate the May 2006 agreement was a separately negotiated and concluded contract, standing or falling on its own terms. In no identifiable sense does it depend upon the validity of the earlier loan agreement.
Next it was complained there was a want of consideration to support this and the later agreement. That point too must fail. Consideration is to be found initially in the forbearance of the plaintiff in pursuing the insolvency proceedings and agreeing to adjournments, and in any case in compromising, at least for the time being, the enforcement of its extant wider causes of action: Dunlop v Selfridge.[69] Consideration for the May 2006 agreement also consists in part performance, comprised by the execution of the subsequent Deed. And still further, consideration resides in the potential discharge of the original loan agreement upon fulfilment of the obligations erected by the later agreements: Olsson v Dyson.[70]
[69] [1915] AC 847 at 855
[70] (1969) 120 CLR 365 at 389
The first agreement was followed up and purportedly implemented by the execution in June 2006 of the document styled “Deed of consent to judgment”, signed by Mr Callipari. It was as follows:[71]
[71] Exhibits P8 and P8A
DEED OF CONSENT TO JUDGMENT
Dated the       day of June 2006.
BEWTEEN:
Web Wealth Pty Ltd ACN 096 047 022 care of Level 1, 19 Sturt Street, ADELAIDE SA 5000 (“Web Wealth”)
-and-
Domenico John Callipari of Lot 2 Irymple Avenue NICHOLS POINT vic 3501 (“Callipari”)
RECITALS:
A.Pursuant to an agreement dated 24 January 2005 between Web Wealth, Callipari and Helimount Pty Ltd ACN 006 818 917 (“Helimount”), Callipari and Helimount borrowed the sum of $630,000 from Web Wealth (“the loan”) on terms including as to the payment of interest.
B.    As at the date of this deed, the said sum and interest remains outstanding.
C.By an agreement dated 24 May 2006 between Callipari, Helimount and Web Wealth (“the May 2006 agreement”), Callipari agreed to execute a consent to judgment in the sum of $1,100,000 in the form provided to him by Web Wealth in the event that he did not pay that amount to Web Wealth by 5 July 2006.
D.    Web Wealth has produced this deed to Callipari pursuant to the May 2006 agreement.
THIS DEED WITNESSES:
1.If by 5 July 2006 Callipari has not paid to Web Wealth the sum of one million and one hundred thousand dollars ($1,100,000) in respect of the loan then the terms of this deed come into effect.
2.Callipari acknowledges that he and Helimount are liable to Web Wealth in the sum of one million and one hundred thousand dollars ($1,100,000) in respect of the loan inclusive of interest up to and including 5 July 2006.
3.Callipari consents to the entry of judgment in the sum of one million and one hundred thousand dollars ($1,100,000) in proceedings against him by Web Wealth in respect of the loan.
4.Insofar as Web Wealth claims an amount greater than $1,100,000 against Callipari and Helimount, Callipari reserves his rights as to the sum claimed over and above $1,100,000.
5.The address for service of Callipari in respect of any legal proceedings by Web Wealth in respect of the loan is:
J.G. Thompson
Solicitor
PO BOX 1548
SHEPPARTON VIC 3630
Personal service of proceedings against Callipari may be effected by sending those proceedings by ordinary pre paid post to the aforesaid address for service.
EXECUTED AS A DEED
Domenico John Callipari  Director
Web Wealth Pty Ltd
This instrument amounts to no more than an act of part performance of the obligations to execute such a document, reached in May 2006. As such it does not stand to be enforced in its own right. As mentioned, it further serves as cogent evidence of the assumption of personal liability by Mr Callipari, as confirmation of a debt owed to Web Wealth and as will be seen later, an act affirming the actual authority of Mr Munt to execute the May document on his behalf.
A second “settlement” agreement was reached on 12 July 2006, one drafted somewhat differently than the first.[72] Here the undertaking is as between Helimount, Mr Callipari and Web Wealth. It makes provision for the payment of the earlier sum of $1.1m, plus a further $100,000 by the same date, 25 July 2006.[73] Once again this was drawn up within the court precincts by hand. It read:
Agreement dated 12 July 2006
In consideration for the adjournment of the winding up application heard on 12 July 2006 to 9.15 am on 26 July 2006 Helimount and Mr Callipari agree with Web Wealth that:
1.The outstanding sum of $1.1m will be paid on or before close of business on Tuesday 25 July 2006.
2.A further sum of $100,000 will be paid on or before close of business on Tuesday 25 July 2006.
3.By Friday 14 July 2006 Helimount to provide by way of comfort documentary evidence of the approval of finance by GE for the above.
4.Helimount consents to any application Web Wealth may make for an extension of time under 459R for a reasonable extension period.
[72] Exhibit P9
[73] Exhibit P9
This document is silent as to who is responsible for the subject payments, in contrast to the first, which rendered it Mr Callipari’s obligation. It is also silent on whether the obligation was joint, or joint and several. For the same reasons developed earlier, as this agreement does not clearly articulate joint and several responsibilities, the attempt to enforce this particular agreement as against Mr Callipari cannot succeed, once again because Web Wealth subsequently consciously elected to enforce against Helimount.
These two subsequent agreements amount to conduct and admissions by Mr Callipari on his own behalf, quite inconsistent with Web Wealth not being the lender. The very same materials also reinforce the conclusion that there was a loan in January 2005 in the sum of $630,000, and that for his part Mr Callipari understood he was also liable, along with Helimount.
Next, the defence calls into question the authority of Mr Munt to execute both “settlement” agreements, so as to bind Mr Callipari. The operative endorsement was “for and on behalf of Doman Lawyers, acting on behalf of Helimount Pty Ltd as agents for J.G. Thomson Solicitors”. The plaintiff counters this objection by pointing to the surrounding circumstances, which it contends reveal the source of Munt’s authority to commit Mr Callipari. Thompson’s contemporaneous letters of 27 June and 4 July 2006 to the solicitors acting for Web Wealth, enclose a “Deed of Consent to Judgment signed by our client”.[74] The parties to the Deed are Web Wealth and Mr Callipari in his personal capacity, and Mr Callipari has executed each as such. The only “client” to whom the letters are referable, is Mr Callipari himself. By subscribing to the Deed, Mr Callipari was complying with the obligations he undertook under clause 2 of the 24 May 2006 agreement, a position wholly inconsistent with his present stance that Mr Munt lacked the authority to execute on his behalf.
[74] Exhibits P5 and P7
There is in addition evidence that Mr Munt had access to Mr Callipari by mobile phone.[75] A copy of the subsequent agreement of 12 July 2006 because, Exhibit “RGM2” to an affidavit filed in the Federal Court by Eggleston Mitchell Lawyers in August 2006 on behalf of Helimount. This was the same firm of solicitors acting in the Federal Court on behalf of Mr Callipari in May 2007,[76] and who continue to act for him in the present proceedings.[77] This particular copy of Exhibit P9 “RGM2”, appears to have been counter initialled by Mr Callipari alongside the signature of Mr Munt. So far as one can judge from photocopied documents, this is visibly similar to his known signature on Exhibits P1, P1A, P1B, the Deed of Consent to Judgment D11 and his affidavit P11. The court is entitled to make its own comparison of these signatures, even in the absence of expert evidence, albeit with caution: Adami v The Queen.[78]
[75] Exhibit P9A paragraph 11 & 12
[76] Exhibit P14
[77] FDN 2, February 2007
[78] (1959) 108 CLR 605 at 616-617, Evidence Act 1929 (SA) s 30
This consideration combined with all the other circumstantial evidence, affirms the authority of Mr Munt to bind the defendant. The agreement of 12 July was similarly signed by Mr Munt in the same way as that in May, thus suggesting a continuing authority to act as agent for Mr Callipari, as well as Helimount in this latter instance. Acceptance in clause 1 of “the outstanding sum of $1.1m” is exclusively referable to the 24 May undertaking, so that this latter agreement not only fails to protest the authority of Mr Munt, but rather amounts to an act of ratification, as does the subsequent act of executing the Deed of Consent to Judgement, Exhibit P9.
The parties point to the other for the failure to call Mr Munt or Mr Callipari to give evidence on this issue. That Mr Munt signed without authority is to accept that a legal practitioner deliberately acted without authority to bind a “client” to an onerous commercial undertaking in the shadow of court proceedings, is inherently most improbable. The failure of Mr Callipari on the other hand is neutral. He rests on the perfectly legitimate position that the plaintiff has not made out its case. Nevertheless for the reasons identified, it can be safely inferred on balance that Mr Munt held the authority to commit Mr Callipari in and about his high personal stake in the outcome of the Federal Court proceedings, to execute the two settlement agreements negotiated during the course thereof, on his behalf.
Issue estoppel – the Federal Court proceedings
The plaintiff claims an issue estoppel arises from the decision of Mansfield J in the Federal Court, to the extent that findings were made with respect to the 24 January 2005 agreement, with Web Wealth as lender. In those proceedings Mansfield J made orders in the following terms:[79]
[32] The parties were agreed upon the appropriate form of orders if I were to reach the conclusion I have reached. I think they are appropriate. I accordingly declare that Web Wealth Pty Ltd has an interest in the fund comprising the proceeds of sale of the land described in Certificates of Title Register Book Volume 9983 Folio 505 and Volume 9593 Folio 463 (“the properties”) corresponding to the equitable mortgage in its favour created by the deposit of duplicate certificates of title by Helimount Pty Ltd in January 2005. I also order that the liquidator pay to Web Wealth Pty Ltd such sum as represents the proceeds of sale of the properties less the costs and disbursements of the liquidator in realising the properties.
[79] Exhibit P12, Helimount Pty Ltd (In Liq) v Web Wealth Pty Ltd [2007] FCA 1936
In so ruling his Honour applied the decision of the High Court in Theodore v Mistford Pty Ltd,[80] recognising an equitable mortgage can be affected by the deposit of title deeds, with the intent that they relate to security for the payment of a debt. It is to be recalled the two subject deeds were delivered by Mr Callipari to Mr Stirn and that they are recorded in all versions of Recital B, as security for the loan of January 2005.
[80] (2005) 221 CLR 612
A party seeking to invoke an issue estoppel, must establish that one and the same question was decided, the decision was final, and the parties “or their privies” were the same persons suing in the same capacity in both proceedings: Kuligowski v Metrobus,[81] Carl Zeiss Stiftung v Rayner & Keeler Ltd (No 2).[82]This aspect of the law of estoppel derives from policy considerations, often described as the desire to avoid inconsistent decisions: Port of Melbourne Authority v Anshun Pty Ltd (Anshun Case).[83]Thus a “judicial determination directly invoking issues of law and fact disposes once and for all of the issues, so that it cannot afterwards be raised between the same parties or their privies”: Blair v Curran.[84] It is necessary to consider whether or not “a matter of fact or law … which the precise matter has already been necessarily and directly decided” was involved: Ramsay v Pigram,[85] one where “ultimate facts forming the very title to rights was entailed”: Blair v Curran.[86]
[81] (2004) 220 CLR 363 AT 373
[82] [1967] 1 A.C. 853
[83] (1981) 147 CLR 589 at 603-604
[84] (1939) 62 CLR 464 at 531
[85] (1968) 118 CLR 271 at 276 per Barwick CJ
[86] Above at 532
Precisely the same agreement was not before the Federal Court, although one in the same terms was tendered before Mansfield J.[87] This is in the same terms as Exhibit P1B, except that there was no proof of the facsimile return from Mr Callipari of 20 January 2005.[88] The central issue at stake in the Federal Court was described by the trial Judge as “whether Web Wealth is a secured or unsecured creditor of Helimount for the purposes of its winding up”.[89] The applicant was the liquidator in right of Helimount. He sought a determination “as to the status of Web Wealth, that is whether it is a secured or unsecured creditor of Helimount and for a determination as to the nature of its security”,[90] and “… the intention of Mr Callipari when he handed over the two certificates of title to Mr Stirn, when he signed the Deed on 14 January 2005”. The respondent was Web Wealth Pty Ltd. The judgment records Mr Callipari as an interested party represented by counsel, his solicitors for this purpose being Eggleston Mitchell. According to the judgment, his stance was that equitable mortgages were not created because the titles were deposited by Helimount “to be held … as security for the potential advance of funds …”.[91]
[87] Exhibit D11 in this court
[88] Reproduced at [133.45]
[89] At [4]
[90] At [6]
[91] At [7]
In the context of these questions it is necessary to identify precisely what issues Mansfield J did and did not resolve. It should be observed that during the trial in the Federal Court, both Mr Pappas and Mr Stirn gave evidence, as did Mr Callipari. After reviewing the judgment the following summary emerges as to what his Honour did in fact decide:
.it was inherently likely that a short term advance of substantial funds would have been the subject of security (at [20]);
.the alternative suggestion by Mr Callipari that the certificates of title given to Mr Stirn to hold on his behalf only to secure a grant of a longer term finance was inherently unlikely (at[21]);
.it was inherently unlikely Mr Stirn would have made a representation that the initial advance was for a short term and security was handed over to secure only long term finance (at [25-26]);
.Mr Stirn was handed the two titles by Mr Callipari, received as agent for Web Wealth, precisely because it was meant as security to support the proposed advance by Web Wealth (at [42]), and consequently;
.there was equitable mortgages over the two titles to secure the repayment of the advance by Web Wealth of $630,000 (at [43]).
It is equally important to appreciate precisely what his Honour did not determine. It is perfectly clear he gave no judgment directly impinging Mr Callipari. In the narrative section of his judgment, Mansfield J recorded the fact that Helimount and Mr Callipari were named as borrowers, and nothing “has been made by Web Wealth or by Mr Callipari of the recording of Helimount and Mr Callipari as “the borrower” or of them together as “the borrower”, being the registered proprietor of the two pieces of land”.[92] His Honour expressly said he did not “need to discuss that feature of the Deed further”.[93] These of course are live issues in the present proceedings touching the question of joint and several liability, resolved earlier.
[92] At [13]
[93] At [13]
Then his Honour noted there was no issue in the proceedings before him of the changes made by Mr Stirn, altering the original $600,000 to $630,000. Indeed nothing was made either of the fact that the alteration “was made after the Deed was signed and after the funds had been advanced”.[94] These questions are also live issues of consequence in the present proceedings. Finally and perhaps more critically, his Honour observed “Mr Pappas had arranged for the advance of those funds from a number of sources”, and that it “was accepted during the course of the proceedings that the debt was owed by Helimount to Web Wealth, and that those sources had provided the funds to Web Wealth and that Web Wealth had on-lent them to Helimount”.[95] Once again these questions are core issues in the case at bar.
[94] At [15]
[95] At [171]
As so analysed, the necessary degree of coincidence between the issues in contention in the two respective proceedings, is distinctly wanting. The Federal Court proceeding was based around an alleged representation and the intention of Mr Callipari in handing over the title deeds. The question of Web Wealth’s capacity to sue as borrower was not agitated, nor was the question of joint or several liability. Nothing was made of the alterations to the Deed, whereas in this action these very issues were very much in contention. No finding was made touching Mr Callipari’s personal obligations. For these accumulated reasons, reliance on an issue estoppel springing from the Federal Court judgment, must fail at the threshold.
That said, there can be no doubt as to the second of the issue estoppel requirements, since the judgment of Mansfield J was final, so far as it went. As to the third, Mr Callipari appeared personally as an intervener in those proceedings,[96] was represented throughout by counsel, who cross-examined witnesses on his behalf.[97] As an intervener Mr Callipari was then in the eyes of the law for the purposes of the application of the issue estoppel principle, a relevant party: Australian Securities Commission v Marlborough Gold Mines Ltd.[98] In that capacity he was privy in the required sense. And quite apart from that interest he was jointly liable with Helimount: Ramsay v Pigram.[99]
[96] Exhibit P14, Notice of Appearance
[97] Exhibit P15
[98] (1993) 177 CLR 485 at 505
[99] (1968) 118 CLR 271 at 287-288
Consumer Credit Code

Mr Callipari claims that if there was a contract of loan, it was regulated by the Consumer Credit (South Australia) Code, with which it is non-compliant and therefore “ineffective”. The Code is one component of a nation wide initiative, legislating jurisdictional based protection for natural persons, particularly arising from liabilities arising under credit card and loan facilities, other than those acquired for business purposes.[100] By virtue of the Consumer Credit (South Australia) Act 1995, the Consumer Credit Code of Queensland set out in the appendix, “applies as a law of South Australia”: ss 5(a). In order to assess the merits of this aspect of the case, it becomes necessary to consider first whether the contractual arrangements were regulated by the Code and if so with what effect?
[100] Refer Second reading speech Hamand, House of Assembly 16 March 1995 p. 2015
This first question is best dealt with by commencing with s 6 of the Code. This provides:
6      Provision of credit to which this Code applies
(1)This Code applies to the provision of credit (and to the credit contract and related matters) if when the credit contract is entered into or (in the case of precontractual obligations) is proposed to be entered into-
(a)     the debtor is a natural person ordinarily resident in this jurisdiction or a strata corporation formed in this jurisdiction; and
(b)     the credit is provided or intended to be provided wholly or predominantly for personal, domestic or household purposes; and
(c)     a charge is or may be made for providing the credit; and
(d)     the credit provider provides the credit in the course of a business or providing credit or as part of or incidentally to any other business of the credit provider.
In order to regulate a transaction, the debtor must not only be a natural person resident in the jurisdiction (ss 6(1)(a)), that is in South Australia, but the credit must be provided for wholly or predominantly for “personal, domestic or household purposes” (ss 6(1)(b)). On the facts of this case, each one of these requirements presents a problem for the defendant. First of all the debtor was both a natural person and a corporate body. Second Mr Callipari normally resides in Mildura in the State of Victoria, and third all versions of the January contract expressly declared in clause 5 in the terms quoted earlier, that the loan was for commercial purposes.
Natural person?
Dealing with these issues in turn, there is no authority so far as the researches of counsel go, dealing with a contract involving both a corporate and natural individual, as joint borrowers. For the present, bearing in mind the beneficial and remedial purposes of the legislation to protect consumers from unduly burdensome credit contracts, I assume it does not matter that one borrower is a natural person and the other is not. This stance is consistent with maintaining the protection intended for natural persons.
As to the fact that Mr Callipari is not normally resident in this jurisdiction, it is assumed once again this does not disqualify him from the protection it might otherwise afford, even though the Code is a law of South Australia.[101] There is parallel legislation in Victoria anyway. As this discrete issue was not agitated by either counsel, it is preferable to say no more about it.
Borrowing for personal, domestic or household purposes?
[101] Section 5 Consumer Credit (South Australia) Act 1995)
The second essential requirement of the Code is borrowing wholly or predominantly for personal, domestic or household purposes. Here all to the January 2005 documents expressly declare matters to be otherwise “the Loan is strictly for Commercial Purposes Only”. As a question of principle unaffected for the moment by any other provision of the Code, this surely could not be conclusive, because it would enable the parties to declare an untrue situation, in order to contract out.
However such contingencies are regulated by s 11 of the Code:
11 Presumptions relating to application of Code
(1)In any proceedings (whether brought under this Code or not) in which a party claims that a credit contract, mortgage or guarantee is one to which this Code applies, it is presumed to be such unless the contrary is established.
(2)Credit is presumed conclusively for the purposes of this Code not to be provided wholly or predominantly for personal, domestic or household purposes if the debtor declares, before entering into the credit contract, that the credit is to be applied wholly or predominantly for business or investment purposes (or for both purposes).
(3)However, such a declaration is ineffective for the purposes of this section of the credit provider (or any other relevant person who obtained the declaration from the debtor), knew, or had reason to believe, at the time the declaration was made that the credit was in fact to be applied wholly or predominantly for personal, domestic or household purposes. For the purpose of this subsection, a relevant person is a person assisted with the credit provider or a finance broker (or a person acting for a finance broker) through whom the credit was obtained.
(4)A declaration under this section is to be substantially in the form (if any) required by the regulations and is ineffective for the purposes of this section if it is not.
As a first step, the Code applies to the present arrangements, unless the contrary is established, simply because Mr Callipari claims the benefit of it, so that it then falls to the plaintiff to prove otherwise on balance (ss 11(1)). However in this instance s 11(2) governs the situation because of the affirmative declaration in the body of the subject agreements, so that it is then “presumed conclusively not to be provided” for personal, domestic or household, purposes. This section serves in that event to “trump” the rebuttable presumption erected by s 11(1). This declaration on the face of the agreements, conclusively determines the matter adversely to the defendant. The less demanding rebuttable presumption created by s 11(1) is displaced anyway, because the evidence demonstrates on balance that the loan was not secured for a relevant personal or other purpose.
However the defendant argues the loan was for a relevant non-business purpose and Web Wealth knew it to be so. As to this, Mr Stirn related a conversation with Mr Callipari, when he was told the loan was sought for the purposes of assisting a cousin, a Mr Medici, in respect of real estate owned by him. Mr Medici attended with Mr Callipari at their first face-to-face meeting. Stirn’s precise evidence as to this was:[102]
AYeah basically National Bank was foreclosing or wanted to foreclose some properties Matthew [Medici] owned and Domenic was going to buy them over. I think it was grapevines or apricots, some land anyway, vineyards whatever, and they needed some funds quick because National Bank was going to sell the properties and they were going to lose them, so.
[102] T200.21-.27
This knowledge must be imputed to Web Wealth, as Stirn was its agent. At first sight this evidence would not be directly admissible to prove the underlying fact of the arrangements between Mr Callipari and Mr Medici. On the other hand, as between the parties to this litigation, they constitute admissions by Mr Callipari to the effect that he wanted the funds to assist a relation to resist foreclosure. To that extent they are relevant and admissible to prove the subject loan was – or was not - for purposes protected by the legislation.
On the basis of that information, Web Wealth must be taken to have known, or had very good reason to believe, the subject loan was for the stated purpose, which was clearly not for domestic, household or personal purposes. Although the arrangements between Mr Callipari and Mr Medici were not revealed, it is difficult to accept this was a gift, given the large sum and high interest rate involved. It had inherently to be some kind of business arrangement. It follows then one way or another, that it is conclusively presumed the loan of 20 January 2005 was not provided for relevant non-business purposes, or that the defendant has failed to demonstrate Web Wealth held the required knowledge or belief required by ss 11(3).
In any event the facts prove otherwise. As the loan was paid into a corporate entity, it is difficult to see how it could have been in any sense designated for relevant prescribed purposes. Indeed Mr Callipari deposed in his Federal Court affidavit of April 2006 that the initial dishonour of the two cheques “caused Helimount Pty Ltd direct financial loss … resulting in difficulty in obtaining credit, goods and services and compromising its ability to undertake normal business activities”.[103]
Consequences should the Credit Code Apply?
[103] Exhibit P11 para 103
If contrary to these conclusions, and the Code happens to apply to the subject transaction, the defendant relies on the protection originating in R 10 of the Consumer Credit Regulations 1995 (Qld). These apply in South Australia by incorporation affected under s 6 of the Consumer Credit (South Australia) Act. As seen above s 11(4) of the Code mandates a form of declaration as set out therein, to be incorporated within facilities to which the Code applies. That section is set out above.
The form of declaration is prescribed by r 10 of the Consumer Credit Regulations 1995:
10    Declaration of purposes for which credit provided
(1)For the purposes of section 11 of the Code, the form of the declaration is as follows—
‘I/We declare that the credit to be provided to me/us by the credit provider is to be applied wholly or predominantly for business or investment purposes (or for both purposes).’.
(2)The declaration is to contain (immediately below the above words or, if the declaration is to be made by electronic communication, prominently displayed when (but not after) the person signs) a warning in the following form—
IMPORTANT You should not sign this declaration unless this loan is wholly or predominantly for business or investment purposes. By signing this declaration you may lose your protection under the Consumer Credit Code.
(3)     The declaration is to contain—
(a)    the signature of each person making the declaration; and
(b)either the date on which the declaration is signed or the date on which it is received by the credit provider.
Note— The Code applies only to credit provided or intended to be provided for personal, domestic or household purposes. Section 11(2) of the Code provides that credit is conclusively presumed not to be provided for those purposes if the debtor declares, before entering into the credit contract, that the credit is to be applied wholly or predominantly for business or investment purposes (or for both purposes). The declaration is not effective unless it is substantially in the form required by the regulations.
It is accepted that none of the subject loan agreements contained declarations in the prescribed form.
Non-compliance is dealt with in the Consumer Credit Code:
170 Effect of non-compliance
(1)A credit contract, mortgage or guarantee or any other contract is not illegal, void or unenforceable because of a contravention of this Code unless this Code contains an express provision to that effect.
(2)Except as provided by this section, this Code does not derogate from rights and remedies that exist apart from this Code.
Obviously non-compliance with the form of declaration prescribed in r 10, does not of itself, vitiate the contract. The purpose of the legislation was not then to invalidate an action in breach of a provision: Project Blue Sky Inc.[104] Non-compliance with s 11(4) is dealt with internally, by simply rending the declaration alone, “ineffective”. Section 11(4) itself effectively requires “substantial” compliance: Permanent Mortgages Pty Ltd v Cook.[105]
[104] (1998) 194 CLR 355
[105] (2006) ASC 155-082, [2006] NSWSC 1104 at [57-59]
It was argued by the plaintiff that clause 5 to the operative part of the agreement (reproduced above), provided greater information than required by the Regulations, because it warned expressly that there would be no consumer protection, so that it went further than required. Hence it was in substance for all practical purposes “substantially in the form” of the regulations as demanded by s 11(4). It was submitted exact correspondence is unnecessary: Equipment Investments Pty Ltd v MJ Dowthwaste & Co Pty Ltd.[106]
[106] (1969) 16 FLR 23 at 30
This much maybe accepted, except for one critical point. The entire purpose of the declaration itself, emphasised by the formatting adopted in the regulations, is to prominently draw the debtor’s attention visually, to the warning NOT to sign. This bluntly serves to warn of the protection the borrower might otherwise be signing away. Although questions of form should not be permitted to triumph over substance, the distinct structure of the declaration is nevertheless significant in this respect.
Clause 5 of the loan agreement of 20 January 2005 did not bring the point home to the borrower that the contract should not be signed if it was not for prescribed purposes. For this reason, there was insufficient compliance with the requirements of the Code as to the form of declaration required. In that event the irrefutable presumption afforded to a credit provider under s 11(2) is not triggered, so that s 11(1) and 11(3) then “kick in”, with the result that Web Wealth has established the loan was not provided for a purpose to which the Code applies. Hence the breach is of no other consequence. In whatever way the matter is looked at, the defence submission that the subsequent loan is rendered invalid on account of material non-compliance with the Code, must therefore fail.
There is one remaining issue to be dealt with arising under the Code. A contract to which the Code applies, can only be enforced by a credit provider who first serves on the debtor a 30 day default notice, compliant with s 80. Moreover enforcement proceedings “cannot be commenced” unless the notice was given, and default of at least 30 days occurs thereafter: s 80(2). There is however a power vested by s 80(4)(c), enabling the court to authorise ‘the credit provided to begin the enforcement proceedings’. Of course it would only become necessary to consider this question if the Code applied to the transaction in the first place.
It is common ground that no such notice was given and that no court authorisation was sought “to begin the enforcement proceedings”: s 80(4)(c). Web Wealth seeks an order “now for then” authorising this action.[107] Factors relevant to the discretion to make such orders, must depend upon the nature and extent of non-compliance, informed by the general purpose of the legislation to protect individual consumers.
[107] “nunc pro tunc”
The irregularity in this specific context, could not have misled Mr Callipari or disadvantaged him in any way. It is clear the absence of a notice of default was of no practical consequence and certainly reaped no unfairness on him. He was aware of the effect of the Code, as warnings of a kind were contained in the documents. As the history of the case demonstrates, he desperately wanted a loan urgently, later endeavoured at least twice to reschedule the outstanding debt, so that the required notice would have been a mere formality, one of no substantive impact or effect, so far as he was concerned. The abject purpose of the notice provision is to afford the debtor the chance within the 30 statutory days of grace to remedy the default. This is precisely what Mr Callipari was endeavouring to achieve over a much longer period of time during the various negotiations in the shadow of the Federal Court proceedings. From mid 2005 he was acutely aware he was in default.
That being the case it is entirely appropriate on the merits to authorise the plaintiff as credit provider, to have begun the within enforcement proceedings, despite not having issued a notice of default in the first place, had that been necessary. But does the court have the power to make the authorisation?
So far as relevant s 80 of the Code provides:
Division 2 Enforcement of credit contracts, mortgages and guarantees
80Requirements to be met before credit provider can enforce credit contract or mortgage against defaulting debtor or mortgager
(1)Enforcement of credit contract. A credit provider must not begin enforcement proceedings against a debtor in relation to a credit contract unless the debtor is in default under the credit contract and-
(a)the credit provider has given the debtor, and any guarantor, a default notice, complying with this section, allowing the debtor a period of at least 30 days from the date of the notice to remedy the default; and
(b) the default has not been remedied within that period
…
(4)When default notice not required. A credit provider is not required to give a default notice or to wait until the period specified in the default notice has elapsed, before beginning enforcement proceedings, if-
(c)the Court authorises the credit provider to begin the enforcement proceedings; or …
The section is worded so as to suggest at first blush that orders can only be so made in advance of enforcement proceedings. And so the question arises whether it is open to make an authorising order after such proceedings have already been instituted? Neither counsel were able to point to any authority in which the power conferred by the Code to authorise proceedings was exercised. Generally speaking provisions like this are seen as a conditions precedent to the institution of proceedings: Graham v Aluma Lite Pty Ltd,[108] Benjamin v Ashikian.[109] Mr Dal Cin relied by analogy on s 471B of the Corporations Law. This provides:
S471B. While a company is being wound up in insolvency or by the Court, or a provisional liquidator of a company is acting, a person cannot begin or proceed with:
(a) a proceeding in a court against the company or in relation to property of the company; or
(b) enforcement process in relation to such property;
except with the leave of the Court and in accordance with such terms (if any) as the Court imposes.
[108] (1996) 39 NSWLR 58
[109] (2007) ASC 155-086 at [86-93]
In Emanuele v Australian Securities Commission[110] a majority of the High Court of Australia, held an order granting leave under the predecessor to this provision, s 459P(2), could be made nunc pro tunc. This decision and the authorities referred to therein, are sufficient to sustain the proposition that a failure to obtain the necessary permission, does not deprive the court of the jurisdiction to grant such permission after proceedings are commenced, providing the merits require such a course to be taken. Subsequent decisions on analogous legislation support that view as a question of principle: BHG Nominees Pty Ltd v Ellis Young Investments Pty Ltd,[111] Bell Group Ltd v Westpac Banking Corp.[112]
[110] (1997) 188 CLR 114
[111] (1998) 16 ACLC 1,539
[112] (2000) 104 FCR 305
Monies had and received
A final cause of action is one based, if all else fails, on the money had and received of $630,000, less of course the monies deriving from the liquidation and the $25,000 cash repaid. Leave to amend to add this basis of liability and other consequential changes to the statement of claim was granted during the trial, the defendant being unable to identify any prejudice by so doing.[113] The evidence of course was that the money was not received by Mr Callipari, but by Helimount. The plaintiff’s counsel points to paragraph 3 of the defence which admits “Helimount Pty Ltd and Callipari obtained the sum of $630,000”.
[113] T257.16-259.10
At common law a person having a legal interest to money, as Web Wealth has on the above findings, can bring an action for money had and received: Lipkin Gorman v Karprale Ltd,[114] Finlay v Silcon Industries Pty Ltd.[115] The impediment standing in the way of the plaintiff here is that the only evidence before the court is precisely that the $630,000 was received by Helimount. There is no evidence that money fell into the hands of Mr Callipari personally: Scott v Miller.[116] Although there is in the pleadings an admission that he “obtained” the money, there is no admission in what capacity it was so received, so that the plaintiff is unable to disprove that it was not so obtained in his capacity as Director of Helimount. For that reason this final avenue of redress must fail.
[114] [1991] 2 A.C. 548
[115] 2003) 229 LSJS 14, [2003] SASC 236 at [123]
[116] (1837) 132 ER 865
Conclusion

In the result of this somewhat complicated analysis, the plaintiff has proven a loan agreement of $630,000 to Mr Callipari and Helimount, entered into on 20 January 2005. However it fails on the issue of enforcement, as properly construed that agreement was one creating joint liability only. Since the plaintiff elected to enforce as against Helimount, the liability thereunder is now discharged, such that it cannot now pursue Mr Callipari. The same conclusions apply equally to the agreement of 12 July 2006, which in any case discharged upon the default of Helimount and Mr Callipari.
However the plaintiff succeeds in relation to the agreement of 24 May 2006, because Mr Callipari personally contracted to pay Web Wealth $1.1m by 5 July 2006. Accordingly Web Wealth is entitled to enforce that agreement. The parties should be heard on the question of whether the $25,000 cash and the sum repaid from the liquidator, should be brought into account, before judgment is entered. The parties should also be heard as to the precise terms of the appropriate orders consistent with these reasons, and of course as to the consequential questions of interest and costs.