Willmott v Wilson

[2024] NSWDC 20

District Court

New South Wales

Medium Neutral Citation:

Willmott v Wilson [2024] NSWDC 20

Hearing dates:

26, 27, 28 and 29 June 2023

Date of orders:

14 February 2024

Decision date:

14 February 2024

Jurisdiction:

Civil

Before:

Andronos SC DCJ

Decision:

(1)   Judgment for the plaintiff against the defendants in the sum of $192,043.16 inclusive of interest.

(2)   Dismiss the cross-claim.

(3)   Order the defendants to pay the costs of the plaintiff on the ordinary basis as agreed or assessed.

(4)   Order the cross-claimant to pay the costs of the cross-defendant on the ordinary basis as agreed or assessed.

(5)   Grant liberty to the parties to make an application to vary orders (3) and (4) herein by email to my associate within seven days setting out the costs order they seek, any evidence in support, and submissions of no more than three pages in length.

Catchwords:

CONTRACT – Written Agreement – Oral terms

AGENCY — Authority of agent — Construction and extent of — Scope of implied authority

Cases Cited:

Australasian Brokerage Ltd v Australian and New Zealand Banking Corp Ltd (1934) 52 CLR 430

Maria Saravinovksa v Krste (Chris) Saravinovski; Chris Saravinovski v George Saravinovski (No 6) [2016] NSWSC 964

Onassis and Calogeropoulos v Vergottis [1968] 2 Lloyd’s Rep 403

Category:

Principal judgment

Parties:

Gregory Brian Willmott (plaintiff)
Myles Fergus Wilson (first defendant/cross-claimant)
June Hew Wilson (second defendant)
Patrick Willmott (cross-defendant)

Representation:

Counsel:
Mr J O’Sullivan (plaintiff)
Mr M J Davis (defendants/cross-claimant)

Solicitors:
JAY Legal (plaintiff)
Twyford Law (defendants/cross-claimant)

File Number(s):

2019/00211580

Publication restriction:

Nil

JUDGMENT

1. The plaintiff, Gregory Willmott, alleges that on 18 September 2018 he entered into a loan agreement with the defendants, Myles Wilson and June Wilson, pursuant to which he advanced $150,000 to them. The loan amount has not been repaid. He relies on a handwritten loan agreement, apparently executed by each of them.

2. Without intending any disrespect, I will refer to each of the parties and some of the other participants in the various communications by their first names.

3. The defendants (Myles and June) do not deny that $150,000 was deposited by the plaintiff (Greg or Gregory) into Myles’s bank account, but otherwise deny that the handwritten document comprises the terms of the agreement. They say that the document, at least in the form presented to them by the cross-defendant (Greg’s brother, Patrick Willmott) and signed by them, was a component of a partly written, partly oral agreement. The agreement, as they describe it, provided that the $150,000 would only be repayable if Myles failed to take reasonable steps to acquire the property at 41 Heritage Way, Glen Alpine, NSW (the “Glen Alpine property”). Even though the Glen Alpine property was not acquired by him, they say that Myles took such reasonable steps and the money is, therefore, not repayable. Further, the defendants say that it was a condition of the agreement that the moneys be paid into a particular account of June’s, and Greg failed to abide that condition.

4. Greg advances an alternative claim for money had and received. Myles also brings a cross-claim against Patrick alleging breach of warranty of authority, in the event that Greg is found not to be bound by the terms allegedly agreed by Patrick on Greg’s behalf, on 18 September 2018.

5. The principal issues before the Court were:

1. Whether the document dated 18 September 2018, relied upon by Greg, comprises a loan agreement between him and the defendants, Myles and June;

2. Whether certain conversations took place as alleged by Myles and June on 18 September 2018 and, if so, whether they have the contractual effect contended for by them;

3. If the conversations as alleged by Myles and June took place, whether the words spoken by Patrick bound Greg contractually on the basis of his ostensible authority to do so;

4. If the words allegedly spoken by Patrick are established and have contractual force binding on Greg, whether Myles performed his obligations pursuant to any such terms; and

5. If a loan agreement is not made out at all, whether Greg’s alternative claim for money had and received is established.

6. Assessing whether Myles and June have made out their defence also raises consideration of alleged anterior arrangements between Myles, Patrick, Greg, and Myles’s son, Andrew Wilson.

Evidence

7. The plaintiff relied on affidavits affirmed by himself, Patrick, and Kylie Bazzi, a licensed conveyancer. Myles and June relied on affidavits affirmed by each of them. Patrick relied on the same evidence as relied upon by Greg. There was also a substantial volume of exhibits relied upon by the parties, mostly extracted from a three-volume Court Book referred to during the hearing.

Credit and approach to evidence

8. Greg, Patrick, Myles and June were all cross-examined and the credit of each of them was challenged. Ms Bazzi was also cross-examined, but her evidence was uncontroversial and her credit is not in question.

9. In Maria Saravinovksa v Krste (Chris) Saravinovski; Chris Saravinovski v George Saravinovski (No 6) [2016] NSWSC 964, Kunc J enumerated a number of principles to be applied in approaching the task of fact finding where credit is a significant issue. I have extracted the most relevant passages from his Honour’s judgment below:

“[464].   First, at the forefront of the Court’s approach has been the oft cited statement of McClelland CJ in Equity in Watson v Foxman (1995) 49 NSWLR 315 at 318-319:

… [H]uman memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions or self-interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience.

Each element of the cause of action must be proved to the reasonable satisfaction of the court, which means that the court “must feel an actual persuasion of its occurrence or existence”. Such satisfaction is “not … attained or established independently of the nature and consequence of the fact or facts to be proved” including the “seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding”: Helton v Allen (1940) 63 CLR 691 at 712.

[465]. Second, the concept of actual persuasion was elucidated by Emmett J (as his Honour then was) in Warner v Hung, in the matter of Bellpac Pty Ltd (Receivers and Managers appointed) (In liquidation) (No 2) [2011] FCA 1123; (2011) 297 ALR 56:

…

When proof of any fact is required, the Court must feel an actual persuasion of the occurrence or existence of that fact before it can be found. Mere mechanical comparison of probabilities, independent of any belief in reality, cannot justify the finding of a fact. Actual persuasion is achieved where the affirmative of an allegation is made out to the reasonable satisfaction of the Court. However, reasonable satisfaction is not a state of mind that is attained or established independently of the nature and consequences of the fact to be proved. The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, and the gravity of the consequences flowing from a particular finding are considerations that must affect whether the fact has been proved to the reasonable satisfaction of the Court. Reasonable satisfaction should not be produced by inexact proofs, indefinite testimony or indirect inferences (see Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336 at 361-2).

…

[467]. Fourth, evidence is to be preferred which is inherently probable in the circumstances or is given by a witness against their interest.

…

[469]. Sixth, where a witness has been found to be lying about one thing that does not automatically mean that they are to be disbelieved about everything else. The Court is not bound to accept or reject a witness’ evidence in its entirety…

[470]. Seventh, and closely related to the preceding point, in Sangha v Baxter [2009] NSWCA 78 Basten JA (with whom Handley AJA agreed) cautioned against global credibility findings:

155    There are risks in making global findings about credibility of any particular witness. Because a witness has not told the truth with respect to a particular matter does not mean that other parts of his or her evidence are untruthful. Where possible, an assessment should be made of the reasons for the untruthfulness in order to see if other aspects of the evidence are likely to be infected by the same concern. Further, evidence may be rejected because it is apparently unreliable, possibly mistaken or deliberately untruthful or capable of being categorised in a variety of ways which are unlikely to be capable of clear delineation in some cases.

156    Further, findings of credibility are not usually findings with respect to factual issues in the case, but are rather subsidiary findings on the way to determination of issues. Like many aspects of the evidence in a trial, the evidence of a witness who is believed to have lied in a particular respect, will nevertheless be able to bear some weight and should be placed into a balance, with other material evidence, before a conclusion is reached in relation to a critical fact. The rejection of a witness in total, absent corroboration is likely to mean that, even where corroborated, little attention will be paid to the evidence of the witness and less to the possible consequences which might flow from the fact that particular evidence is shown to be truthful: see generally, King v Collins [2007] NSWCA 122 at [44].

[471]. Eighth, disbelieving a witness that “X” was the case does not mean that “not X” has been proven…

…

[473]. Tenth, the Court can only do the best it can on the evidence which it has. Some issues may need not be resolved or should not be resolved. It may be that they cannot be resolved given the nature of the evidence which the parties have adduced…”

10. In Onassis and Calogeropoulos v Vergottis [1968] 2 Lloyd’s Rep 403, Lord Pearce discussed the credibility of honest witnesses at 431:

“… though he is a truthful person telling the truth as he sees it, did he register the intentions of the conversation correctly and, if so, has his memory correctly retained them? Also, has his recollection been subsequently altered by unconscious bias or wishful thinking or by overmuch discussion of it with others? Witnesses, especially those who are emotional, who think that they are morally in the right, tend very easily and unconsciously to conjure up a legal right that did not exist. … And lastly, although the honest witness believes he heard or saw this or that, is it so improbable that it is on balance more likely that he was mistaken? On this point it is essential that the balance of probability is put correctly into the scales in weighing the credibility of a witness. And motive is one aspect of probability. All these problems compendiously are entailed when a Judge assesses the credibility of a witness; they are all part of one judicial process. And in the process contemporary documents and admitted or incontrovertible facts and probabilities must play their proper part.”

11. For reasons which will become apparent in the course of my reasoning, I have found that each of Patrick and Myles was an unreliable witness, either because I formed the view that their evidence before me was untrue, exaggerated, misleading or otherwise unreliable or, to a lesser extent, because they had demonstrated a propensity to act dishonestly when under an obligation to tell the truth.

12. Patrick’s evidence was often implausible and inconsistent with commercial logic and the history of the relationships between the parties. In particular, he gave an account of his involvement in discussions surrounding the proposed finance and development of the Glen Alpine property (the “Glen Alpine project”) that was not plausible and I did not accept. I consider that he understated his own role and the benefit he sought to obtain by involvement in the Glen Alpine project. It might be noted that he is also presently serving a custodial sentence for his part in a significant tax fraud, having been found guilty of taking part, between 2014 and 2017, in a conspiracy to dishonestly cause loss to the Australian Taxation Office and to deal with money of a value of over $1,000,000, believing it to be the proceeds of crime. He appeared for himself in these proceedings, and gave evidence by audio-visual link from jail.

13. Similarly, Myles’s credit was impugned by the implausibility of elements of his evidence and its inconsistency with other objective evidence that I have accepted. Like Patrick, episodes of dishonesty, such as holding himself out as a licensed builder (when he did not hold a current licence) and misrepresenting his marital status and work history to BankWest when seeking finance for the Glen Alpine project impacted on my willingness to accept any uncorroborated evidence from him that was not against interest.

14. Myles had also been in jail, although the evidence did not establish that he had been in jail for an offence of dishonesty. He had escaped from lawful custody and was apprehended at June’s house, apparently seeking to avoid apprehension by hiding in a kitchen cupboard and attempting to use fly spray, literally, to put police tracker dogs off his scent.

15. Little, if anything, turned on Greg’s evidence. Nevertheless, to the extent that it did, I have treated his evidence with care as I also regard him as a less than satisfactory witness. I have found that his affidavit evidence, while not necessarily untrue, was misleading, incomplete and conveyed a false impression that he was only able to fund the advance out of moneys redrawn from a home loan account that he had paid down over time, rather than as a result of a series of transfers commencing with a deposit, by Patrick, of $150,000 into the account of a company controlled by him.

16. I have accepted, however, that June was a witness of truth. June’s credit was attacked on the basis that she had lied to the police about Myles’s whereabouts when he escaped from custody and returned to her house. Although her account of the events surrounding Myles’s return to the Alfords Point house when he escaped from custody was questionable, I am, nevertheless, not satisfied that she acted dishonestly on that occasion. I do not consider that she gave dishonest or untrue evidence before me.

17. That is not to say that June’s evidence was entirely reliable. For the reasons outlined in Onassis and Calogeropoulos v Vergottis above, I consider June’s evidence may have been infected by wishful thinking and a belief that her position was morally just. Myles’s evidence might be characterised the same way.

18. Neither Andrew nor Jessica Wilson, Andrew’s wife, gave evidence, and no party made a Jones v Dunkel submission in respect of either of them.

Factual Background

19. Myles and June Wilson were married between 1999 and 2006. Myles is a builder and is now mostly retired. June had trained as an accountant but has worked as a piano teacher since the birth of her children. She has had some experience in buying and selling homes, although the evidence did not establish that she had any experience in transactions connected with property development.

20. Notwithstanding their divorce, Myles and June lived at the same address in Alfords Point. They are still close friends. Although Patrick disputed it to be so, I accept that they are not a de facto couple and that they keep their finances and lives separate. June was the registered proprietor of the Alfords Point property, where Myles paid rent and contributed towards some utilities.

21. Myles has a son, Andrew, from whom he has been estranged since late 2018. Andrew had a number of business interests, including an importing business, a share in a brothel and a limousine business that he conducted with a friend from his school days, Gary Stramlic. Patrick was also a school friend of Andrew’s. Andrew was involved with Patrick in a property development at Ultimo Street, Caringbah, NSW (the “Caringbah development”), and Patrick was an employee of a company described only as “SWM” or “SWM Constructions” in the evidence, a company which was controlled by Andrew.

22. Greg is Patrick’s brother. He is a company director and developer. He and Myles may have met briefly but they did not know each other. Greg accepted in cross-examination that he was the owner of the property in Ultimo Street and Andrew’s company was the builder of what he described as a renovation, but was actually the construction of duplexes. When seeking to explain the transfer of funds from his home loan account to his business account in September 2018, he said that it was because he was funding the building of the Caringbah development.

23. Andrew had been married to Jessica and by 2018 they were also divorced. At the relevant time, Jessica was the registered proprietor of the Glen Alpine property, which was subject to a mortgage in favour of Pepper Finance Corporation Limited (“Pepper Finance”). In about mid-2018, Pepper Finance took possession as mortgagee of the Glen Alpine property.

24. The evidence was unclear as to where Jessica lived and the status of any ongoing relationship with Andrew. Although they were apparently divorced, the contract for sale to Mr Stramlic and client authorisation provided to Ms Bazzi showed that she lived at the same address as Andrew in Woollahra as at October 2018. Andrew appears to have had close involvement in all aspects of the proposed sale and refinance of the Glen Alpine property in 2018, notwithstanding the divorce. There was some contrary evidence that Jessica lived in the Glen Alpine property with her and Andrew’s son, at least until Pepper Finance entered possession as mortgagee in mid-2018. Ultimately, the lack of any clear evidence as to the extent to which Jessica genuinely needed assistance to reside at the Glen Alpine property casts some doubt on the account that the entire refinance was conducted to protect her interests against Pepper Finance. Nevertheless, I am prepared to accept that protecting Jessica’s equity in the Glen Alpine property was at least a contributing factor for Myles in his involvement in the Glen Alpine project.

The acquisition of the Glen Alpine property

25. The defendants rely on an alleged anterior arrangement between Myles and Andrew concerning the Glen Alpine property and moneys advanced by Myles to Andrew. They say that this agreement provides context that supports their contention that the alleged oral terms of the loan agreement were agreed on 18 September 2018. Neither Greg nor Patrick is alleged to be a party to this agreement.

26. Myles alleges that he lent Andrew $35,000 in 2008 and a further sum of $128,000 in about 2009. The first payment was for the purpose of clearing debt and the second was a contribution to the deposit, stamp duty and fees on the purchase of the Glen Alpine property. The whole of the sum advanced by Myles to Andrew was expressly agreed to be repayable on or before any sale of the Glen Alpine property. Myles states that he initially found the Glen Alpine property and that he and Andrew intended eventually to redevelop it into duplexes.

27. A title search of the Glen Alpine property discloses that the property was transferred on 19 May 2010 and again on 16 May 2015. This is consistent with Myles’s evidence that Andrew was a registered proprietor of the Glen Alpine property following the events of 2009, and that Andrew had transferred his interest to Jessica in 2015.

25. According to Myles, the transfer of the Glen Alpine property in 2015 had been concealed from him and he only learned of it in early 2018. In 2018, Andrew told Myles that the mortgage payments to Pepper Finance had fallen behind and that Pepper Finance were “foreclosing”, which I take to mean threatening to take possession as mortgagee. Accordingly, Andrew told Myles that it was necessary to “buy it back” but he could not raise finance to do so. Andrew asked that June offer her property at Alfords Point as security but Myles responded that June would not agree to do so.

26. Myles says that Andrew then offered an alternative solution whereby Myles would buy the Glen Alpine property in his own name and that he and Andrew could then develop the property and split the profit 50/50, working on the property together. After some thought, Myles agreed, stating that he believed he could “get finance” but asked about the “deposit and mortgage” (which appears to be the same thing as getting finance). Nevertheless, Andrew said that he could sort that out. Andrew then disclosed the fact of the 2015 transfer to Jessica, stating that he had needed to refinance the property and the only way he could do so was to falsely say (presumably to Pepper Finance as the mortgagee) that he and Jessica were getting divorced and that she was buying him out of the house. Myles’s evidence was that he was not happy that Andrew “broke [their] deal” but that he was nevertheless still prepared to look into whether he could purchase the Glen Alpine property in his own name.

27. The evidence of the conversations on which the defendants rely are not sufficient, in my view, to make good the existence of the earlier loan or the breach by Andrew of his obligation to repay it in 2015. Nevertheless, for the purpose of these reasons, I am prepared to assume in the defendants’ favour that such advances were made by Myles, that there was an agreement as alleged with respect to their repayment and that Andrew breached that agreement.

The proposal to redevelop the Glen Alpine property

31. As indicated above, Andrew and Patrick had known each other since their school days. In early 2018, Andrew and Patrick were working together on Caringbah development.

32. The Caringbah development was still incomplete when Andrew travelled to Vietnam in June 2018. He did not return to Australia for almost three months. Myles was aware that Jessica and Andrew were breaking up and that she was unemployed. Myles offered to assist her in negotiations with Pepper Finance and obtained her written authority to do so. According to Myles’s evidence as to the sequence of events, this conversation must have followed his discussion with Andrew and agreement to buy the Glen Alpine property in his own name and jointly developing it with him.

33. Myles says that Pepper Finance advised him to prepare a contract for sale, and he then obtained a draft contract from World Class Conveyancing in order to expedite the sale to himself if he were to obtain finance for the purchase. He told Pepper Finance that he was a builder proposing to purchase the property himself and redevelop it, with a view to discouraging Pepper Finance from conducting repairs to the property and thereby adding to the payout figure required to discharge the mortgage.

34. From about April 2018, Patrick had been corresponding with Trent Vella, a surveyor, and Dane Taylor, an architect or designer based in Thirroul, with respect to surveying the site and preparing drawings for the redevelopment of the Glen Alpine property. This was prior to Pepper Finance entering possession of the Glen Alpine property.

35. Patrick and Mr Taylor had dealt with each other before on at least one project of Patrick’s for which Mr Taylor had invoiced Patrick’s company, R Business Services Pty Ltd. On 28 April 2018, Patrick forwarded Mr Taylor the survey he had obtained, saying, “Builder is due back from overseas on weekend, we’ll touch base during the week”. The “builder” was Andrew. Patrick appears to have provided instructions to Mr Taylor to commence drawings on the Glen Alpine project because he followed up on 1 June 2018, asking if Mr Taylor had spent any time on the Glen Alpine property. That same day, Mr Taylor provided three options for floor plans for four or five townhouses for the Glen Alpine site.

36. On 28 June 2018 Patrick also forwarded funds for a payment to council, which Mr Taylor acknowledged. Mr Taylor asked for news on the project, to which Patrick responded, “Still trying to workout (sic) finance, probably 4 weeks away yet”.

37. On 2 August 2018 Mr Taylor provided Patrick with invoice INV-0023, addressed to “R Business Services P/L – Patrick Willmott”. Patrick did not pay it. Mr Taylor sent it to Patrick again on 6 August 2018. Patrick responded, “Hey mate, sure no worries. Builder is away atm due back mid next week”. The same invoice was reissued on 20 August 2018 to “SWM Andrew Wilson” and Mr Taylor sent it to Andrew at an SWM email address.

38. On Andrew’s return to Australia, he told Myles that Patrick was also seeking finance for the purchase of the Glen Alpine property and that if he became a member of the syndicate, profits would be split three ways between Patrick, Myles and Andrew. While Andrew was away, Myles and Patrick had several discussions about redeveloping the Glen Alpine property.

39. According to Myles, in early September 2018 he had a meeting with Patrick and Andrew. Andrew brought drawings, presumably those which had been prepared by Mr Taylor. At the meeting, it was agreed that the three of them would develop the Glen Alpine property together. There was a demarcation of responsibilities in which Patrick would pay a 20% deposit ($200,000), and fund mortgage repayments, planning and consultant costs and building costs estimated at $400,000 per townhouse. Myles would be the purchaser and the builder and Andrew would “do the day to day work”, which I take to mean labour and site management. The three of them calculated that the development would generate a profit of about $1.25 million, which would be split three ways. Myles expressly stipulated that he had contributed the original deposit for the property and this should be recouped by him before the distribution of profits. This was agreed. June's evidence was that Myles told her of the arrangement at the time.

40. Patrick denies the conversations with Myles and that this meeting occurred at all. According to Patrick, in September 2018, he became aware through passing conversations with Andrew that Andrew and Jessica were having financial issues with the Glen Alpine property and that Greg had informed him that Myles and June were proposing to help “save” the property. Andrew was managing the relationship with Pepper Finance and, because Patrick and Andrew were working on the Caringbah development, Patrick had overheard telephone conversations between Andrew and Pepper Finance, which he communicated to Greg. He says he advised Greg only to lend money to Myles and June on security and pursuant to a written loan agreement. He says that he had telephone conversations with Myles and June in which June pressed for a loan urgently to be used as a deposit so a bank would lend them the money to purchase the Glen Alpine property.

41. I do not accept Patrick’s account. His communications with Mr Taylor from as early as April 2018 demonstrate that he was aware that there was a prospect that the Glen Alpine property would be redeveloped into townhouses. He was actively engaged in obtaining drawings. He had been involved in previous projects with Mr Taylor, from which I infer he had been a property developer in his own right. the period over which he told Mr Taylor that finance was being sought corresponded with the period that Andrew was away in Vietnam. This accords with Myles’s evidence that Andrew told him Patrick was seeking finance. I consider it unlikely that he was only acting as Andrew’s employee and that, rather, he proposed to participate in the redevelopment of the Glen Alpine property in his own right.

42. I do not accept that Patrick was unaware of the position of Pepper Finance until September 2018.

43. Further, I do not accept any of Patrick’s evidence concerning alleged conversations with June. As indicated above, I consider June to be a witness of truth and I generally prefer her evidence over that of Patrick’s where they are in conflict.

44. Myles continued to take steps towards acquiring the Glen Alpine property. He had been negotiating with Pepper Finance since July 2018. On 7 September 2018 he started the process of obtaining finance for the purchase of the Glen Alpine property. He submitted an application to BankWest that was riddled with misrepresentations as to Myles’s income and work history. He overstated his income, which he sought to explain as encompassing family income, which he stated in evidence included June’s income and June’s son’s income. This contradicted his evidence that he and June had maintained separate lives with separate finances since their divorce in 2006. He did not tell BankWest that he paid rent to June. His credit as a witness has suffered as a result.

The transfer of funds

45. In his affidavit, Greg says that he had a conversation with Andrew in September 2018 in which Andrew said to him “Pepper Finance is trying to sell up Jessica’s house at 41 Heritage Way, Glen Alpine NSW 2250”. He says that Andrew informed him that Myles had agreed to buy the property and get finance as Jessica was unable to do so. A deposit was necessary to show Pepper Finance that they had a buyer and that Myles was seeking a loan through BankWest. According to Greg, Andrew then said that the funds were only needed for six weeks whereupon the finance would be restructured on security of the Glen Alpine property and other property belonging to Myles and June. Greg then said that he was interested and that he would speak to his brother, Patrick, who knew something about finance.

46. I consider this account to be unlikely. The evidence did not disclose any reason for Greg to provide financial assistance to Jessica. There was, for example, no personal or familial relationship with Jessica, the ostensible beneficiary of the transaction, that might explain it. There is no evidence that suggests that Greg or any company controlled by him generally provided private finance so that providing a loan would fall within his usual business. Indeed, in his affidavit evidence, Greg specifically disavows any knowledge of finance or securities, which would make this the first occasion on which he made such a loan. The interest rate of 3.8% was modest. Indeed, the proposed return to Greg was so modest, the transaction only makes commercial sense if either Greg, or his brother, Patrick, was to be a participant in the proposed development. It is far more likely, on the evidence before me, that any advance by Greg was, and was known by him to be, primarily for the purpose of acquiring the Glen Alpine property for a redevelopment in which Patrick would be a party.

47. Greg’s evidence continues that he arranged with Patrick for Patrick to go to the home of the defendants and have them sign a loan agreement to protect him. He says that in a prior phone call, Patrick read him an agreement that he had drafted and Greg approved. He said to Patrick, “I can draw the $150,000 down against my home loan mortgage account”. Patrick then attended the meeting (my consideration of the meeting is set out below) after which he called Greg with Myles’s bank details so Greg could transfer the funds to Myles’s account. Greg then physically attended the ANZ Bank and caused $150,000 from his home loan mortgage account to be transferred to Myles’s bank account that day.

48. Greg relied on Patrick to be the sole point of contact between him and the defendants. He had no communications with either Myles or June in this regard. He relied on Patrick to draft the loan agreement and to present it to the defendants as the terms on which he was prepared to offer a loan to them. At no stage during the meeting of 18 September 2018 did Patrick seek further instructions from Greg. There is no evidence of any arrangement between them that would have required Patrick to do so.

49. While it is true that moneys transferred from Greg to Myles’s account had passed through Greg’s home loan mortgage account, I find that Greg’s affidavit evidence in this regard was incomplete and misleading. Records subpoenaed by the defendants, or produced by Greg and accepted by him in cross-examination, demonstrated that there had been a series of transactions commencing on 11 September 2018 whereby:

1. Patrick transferred $150,000 to the account of GB & JA W Holdings Pty Limited (“Holdings”) in three tranches between Tuesday, 11 February and Friday, 14 September 2018. Greg is a director of GB & JA W Holdings Pty Limited.

2. On Monday, 17 September 2018, Holdings transferred $155,000, in two tranches, to the home loan account of the plaintiff and J Willmott.

3. On 18 September 2018, $285,000 was transferred from the home loan account of the plaintiff and J Willmott to the personal bank account of the plaintiff in two tranches.

4. Also on 18 September 2018, $150,000 was transferred from the plaintiff’s personal account to Myles’s account. According to an email from the ANZ International Support Centre, the transfer was complete at 3.29 pm on that day.

50. The sum transferred by Patrick to Holdings is only slightly less than the sum transferred by Holdings to the home loan account, and mirrors precisely the sum transferred by Greg to Myles less than a week later. Neither Greg nor Patrick had a satisfactory explanation for the purpose of the round of transfers involving Patrick. Greg’s affidavit evidence conveys, and was intended to convey, the impression that the moneys advanced were redrawn from payments made over time on Greg’s home loan, when this was not so. The conversation between Greg and Patrick alleged at paragraph 47 above also is unlikely, and I do not accept that it occurred in those terms.

51. It should be noted, however, that it was not put to either Greg or Patrick that Greg’s loan to the defendants was a mechanism to disguise Patrick’s own economic interest in the development of the Glen Alpine property. Nor was it put that either Greg or Holdings was in any way liable to account to Patrick for the $150,000 transferred by Patrick to Holdings. Finally, Mr Davis for the defendants expressly eschewed any submission that the money deposited by Greg into Myles’s account was not Greg’s money.

The meeting of 18 September 2018 and the Document

52. The parties agree that there was a meeting at June’s Alfords Point property on 18 September 2018 and that Myles and June signed a handwritten document prepared by Patrick on that day. The plaintiff alleges that the document was Exhibit P2, in the form in which it was admitted into evidence (“the Document”).

53. The Document was in Patrick’s handwriting and relevantly provided:

1. The loan amount was $150,000.

2. The term was eight weeks, starting on 18 September 2018.

3. The parties to the agreement were (1) Gregory Willmott and (2) Myles Wilson and June Wilson.

4. Security was specified as an “unconditional consented caveat over propertys (sic) listed below; as a charge over those properties”. The only listed property was numbered (1) which was June’s Alfords Point property, with a slight misstatement of the address (wrongly described being on a “Crescent” rather than a “Place”). Below that entry, the number (2) was written in but crossed out.

5. The interest rate was specified as 3.8% p.a. paid weekly. Penalty interest after eight weeks was specified in the document as 12.5% p.a. paid weekly. A claim for penalty interest was abandoned by Mr O’Sullivan, counsel for the plaintiff, at the commencement of the hearing.

6. The Document was eventually signed by each of Myles, June and Greg. Myles and June signed it on 18 September 2018 and Greg added his signature sometime later as he was not at the meeting.

54. The defendants acknowledge that their signatures are on the Document but do not recall the terms concerning penalty interest, that interest would be paid weekly and providing for the grant of a charge. The defendants do not allege, however, and it was not put to Patrick, that he falsified the Document by adding those terms after it had been signed by them.

55. According to Myles, the meeting took place outside the front door of the Alfords Point property between himself, Patrick and Andrew. Patrick and Andrew arrived together. June was in the kitchen, which was near the front door. Andrew said to Myles that Patrick could only raise $150,000 for the deposit. Myles pointed out that Patrick had agreed to raise $200,000. Patrick said that he could not get the full $200,000 so he was getting $150,000 from his brother, Greg, and that Greg wanted the Document signed. Myles looked at the Document and noticed that it purported to record a loan to him. He said, “It’s not a loan to me. It’s an investment by you. It’s part of your share of the deal.” Patrick responded, “It’s not enforceable. It’s just something for Greg’s paperwork.” When Myles protested that he did not want Patrick’s brother coming after him, Patrick said:

“You will never have to pay it back, I promise. If you do your bit but for any other reason the sale falls through, then this becomes your repayment for your original money and for the last few months you’ve spent on this.”

56. Myles then asked, “Why do we even need a document?”. Andrew responded, “For Gregory’s paperwork. It means nothing because Patrick will not let it come to that.” Patrick added, “That’s right. You don’t have to pay this back if you do all you can to try to buy Glen Alpine.” Myles then said that June would not agree to risk the Alfords Point property and Patrick said:

“It’s not a proper loan, you won’t have to pay it back. June has nothing to worry about so long as you do your bit to try to buy Glen Alpine. Don’t worry. Tell her what I said, if you do your bit to try to buy the property then this becomes your repayment of Andrew’s debt.”

57. Myles’s account continues that he relayed this account to June, who then said that she wanted any moneys to be paid into her bank account so that she could transfer the money to the vendor’s agent herself. Myles left the kitchen and relayed June’s position to Patrick and Andrew. Patrick said “Ok”. Myles then returned to the kitchen where he and June signed the Document and he then came back to the Patrick and Andrew. He handed the Document to Patrick and asked for a copy, which was not provided. Patrick said the money would already be in Myles’s account. After Patrick and Andrew left, Myles logged into his bank account and saw that the money was already there.

58. June agrees that she did not participate in the meeting and broadly agrees with Myles’s account of what he said to her in the kitchen and her response. She could overhear the conversation outside but did not say in her evidence that she heard Patrick say that the money would not be repayable if Myles “did his bit to try to buy the property”. She did, however, hear Patrick say:

“Don’t worry, it means nothing. I won’t let it ever come to that. We just need your name on it for Gregory’s paperwork. I will pay Gregory back out of my share of the profit. The interest means nothing. This just makes it look like a loan and we will never put a caveat on your house. You don’t actually have to pay this money back.”

59. When Myles returned to the kitchen, June signed the Document.

60. Patrick’s account is completely different. He says that Andrew, Myles, June and a tradesman named Michael Marcellus were all at the meeting. Mr Marcellus swore an affidavit but was not called and his affidavit was not read. Patrick says he gave the Document to June, who asked about the caveat, to which he replied, in effect, that Greg wanted security over June’s property to protect himself and that Patrick was only there to get the Document signed. He says that he challenged June as to why she should be concerned about the security if she intended to repay the money and that if she was concerned about any of the terms she should take that up with Greg. He says that he stipulated that the money was only to be used for the purchase of the Glen Alpine property.

59. Greg contends that he did not authorise Patrick to make any representations on his behalf at the 18 September 2018 meeting. He contends that he is not bound, if Patrick is found to have made the representations alleged by Myles and June.

60. It might be noted at this stage that if a principal entrusts to an agent the conduct of negotiations for an agreement between a principal and another party, the agent’s authority extends to making statements relevant to that end: Australasian Brokerage Ltd v Australian and New Zealand Banking Corp Ltd (1934) 52 CLR 430 at 450-1.

61. As set out in paragraph 48 above, Greg put Patrick forward, with a document Patrick drafted, as the sole interlocutor in Greg’s dealings with Myles and June. In the circumstances as I have found them, I consider that he clothed Patrick with ostensible, or implied, authority to make representations on his behalf and to deal with Myles and June in all aspects of the proposed loan transaction on 18 September 2018.

62. I do not accept Patrick’s account of the meeting. I have already indicated that I have found him generally to be an unreliable witness and that he has understated his own role in the dealings between the parties in connection with the Glen Alpine property. On the evidence before me, I have found that he stood to gain personally from the proposed development of Glen Alpine and that he may well have been willing to make whatever representations to Myles as he thought were necessary to ensure that the transaction went ahead with the least risk to himself and to the deposit moneys. Patrick’s account is not consistent with the probabilities and, importantly, is contradicted by June.

63. Myles is also a witness whose evidence is unreliable. Nevertheless, certain aspects accord with the surrounding circumstances as I have found them: Patrick was proposing to participate in the purchase and development of the Glen Alpine property in his own right; his contribution was to include providing the deposit and only at the last minute did he proffer a secured loan from Greg to Myles and June. I accept that Patrick told Myles that the Document was “just for Greg’s paperwork” and that the loan would not have to be repaid, although the context is likely to have been that all parties expected the Glen Alpine project to be profitable and Greg would be repaid out of the sale of the developed townhouses.

64. The defendants, however, do not seek to vitiate the agreement by reason of any misrepresentation made by Patrick on Greg’s behalf. Their case is that a partly oral and partly written agreement was struck at that meeting by which Myles would never have to repay the $150,000 paid by Greg provided he “did his bit” to acquire the Glen Alpine property.

65. It is incumbent on the defendants to establish the alleged oral term that the loan was not repayable if Myles “did his bit” was incorporated into the contract. On balance, I have found they have not done so. The key factual question is whether Patrick said any words to the effect that repayment was conditional on Myles failing to take reasonable steps to buy the Glen Alpine property. Counsel for the plaintiff submitted that the obvious uncommerciality of such an arrangement is a reason to reject the defendants’ evidence. While I agree that the alleged arrangement is manifestly uncommercial from Greg’s perspective, this is not entirely to the point. The issue is not whether Greg subjectively agreed to it, but whether Patrick had ostensible authority to bind Greg and that he said those words in circumstances where objectively they comprise a term of the contract.

66. The alleged statements are not corroborated by any contemporaneous documents or independent evidence. They posit Patrick saying that Greg was willing to make good Andrew’s debt without any apparent benefit accruing to him and that Myles and June simply accepted this offer without question and without seeking any written confirmation or other assurance. Only Myles heard the alleged representation. In the absence of some corroborative evidence, the allegations made by the defendants are too implausible for me to accept that Patrick said that the loan was not repayable if Myles took the steps allegedly discussed.

67. I believe that there was an element of wishful thinking on Myles’s part and a belief that he had been unfairly deprived by Andrew of moneys to which he was entitled, particularly in circumstances where his purchase of the Glen Alpine property did not complete and the property was sold to a friend of Andrew and Patrick a few weeks later. He saw retention of this advance as a way to make him whole and it is likely that Myles viewed the arrangements on 18 September 2018 through this prism. While I generally accept the evidence of June, who did not hear the words allegedly spoken, she relied on Myles’s account.

68. Accordingly, I find that the defendants have not made good their allegation that it was a term of the agreement that the $150,000 would not be repayable if Myles took reasonable steps to acquire the Glen Alpine property.

69. In any event, there is real doubt was to whether the alleged term was sufficiently certain to be capable of comprising a contractual obligation. The extent of the steps that Myles could be required to take embrace a broad range of possibilities, which were not the subject of discussion, on any party’s case, on 18 September 2018.

70. As to the alleged condition that payment had to be made into June’s account, I am not satisfied that such a term formed part of the contract or that, if it were, that was a condition the failure of which impacts on the defendants’ obligation to repay the moneys.

Binding contract

73. In determining whether the plaintiff has established a binding written contract in accordance with the Document, I have considered the Document itself as well as the parties’ evidence as to the circumstances of its formation.

74. Much of the evidence was concerned with the relationship between Patrick, Andrew and Myles because that evidence was relevant to an evaluation of the likelihood that Patrick made the alleged representations on 18 September 2018. While I have found that there was indeed a proposed venture to redevelop the Glen Alpine property, I have not found that this circumstance is sufficient for the defendants to overcome the evidentiary difficulties resulting from the existence of a written document that expresses repayment to be an unconditional obligation, Myles’s poor credit, the lack of corroboration by objective evidence and the inherent unlikelihood of a transaction ever being proposed or agreed in the terms advanced by the defendants.

75. Accordingly, the plaintiff has made out his case against both defendants on the basis of the Document.

76. In light of the above findings, the plaintiff’s alternative claim for money had and received does not arise. Similarly, the cross-claim does not arise and will be dismissed.

Events subsequent to 18 September 2018

77. For the sake of completeness, I have considered the events after 18 September 2018.

78. On 28 September 2018 Myles obtained conditional approval from BankWest to borrow $800,000 to purchase the Glen Alpine property, the condition being a satisfactory valuation. On 28 September 2018 Myles and Jessica executed the same copy of a contract for the sale of the Glen Alpine property for the purchase price of $1,000,000. That contract provided for a deposit of $200,000.

79. There is no evidence that any steps were taken to obtain a valuation nor is there any evidence that the deposit was paid. The absence of such evidence casts doubt on whether Myles complied with the alleged oral term of the loan agreement, if such a term were found to have been agreed.

80. On 9 October 2018 Andrew notified Gavin Parsons & Associates, apparently Myles’s solicitor on the purchase, that Myles was no longer the proposed purchaser of the property and that they were no longer to take instructions from him. It was not clear how Andrew had authority to give this instruction and there is no evidence as to how this state of affairs came about. Nevertheless, all parties appear to have accepted the position and Myles’s contract to purchase the Glen Alpine property was ignored. On 16 October 2018 Jessica entered a contract for sale with Gary Stramlic of the Glen Alpine property at a price of $950,000, and the property was subsequently conveyed to him. On 26 October 2018 Pepper Finance indicated that the indicative payout figure for its loan secured by the Glen Alpine property was $880,000.

Conclusion

81. The plaintiff has been successful in establishing that he lent the sum of $150,000 to the defendants pursuant to the written agreement of 18 September 2018. He is entitled to recover that sum, together with contractual interest calculated at a rate of 3.8% p.a. from 19 September 2018 until the date of commencement of the proceedings. Interest at court rates accrues thereafter. The following table sets out the interest calculations:

$	$	$
Principal sum	150,000.00
Add: Interest at 3.8% per annum from 19 September 2018 to 8 July 2019	4,575.62
Subtotal	154,575.62
Add: Interest at court rates from 9 July 2019 to 14 February 2024	37,467.54
Total	192,043.16

82. The plaintiff, having been successful, would ordinarily be entitled to costs assessed on the ordinary basis. Similarly, the cross-defendant having been successful, and having had legal representation for part of the conduct of these proceedings, would ordinarily be entitled to costs as against the cross-claimant also assessed on the ordinary basis.

83. I will order costs on that basis, subject to granting the parties leave to seek to vary those orders if they consider they have a basis to do so.

Orders

84. The orders of the Court therefore are:

1. Judgment for the plaintiff against the defendants in the sum of $192,043.16 inclusive of interest.

2. Dismiss the cross-claim.

3. Order the defendants to pay the costs of the plaintiff on the ordinary basis as agreed or assessed.

4. Order the cross-claimant to pay the costs of the cross-defendant on the ordinary basis as agreed or assessed.

5. Grant liberty to the parties to make an application to vary orders (3) and (4) herein by email to my associate within seven days setting out the costs order they seek, any evidence in support, and submissions of no more than three pages in length.

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Decision last updated: 14 February 2024