AIG Insurance Australia Ltd v McMurray [2023] WASCA 148

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

Upper Hunter County District Council v Australian Chilling & Freezing Co Ltd [1968] HCA 8; (1968) 118 CLR 429

1. This trial is concerned with whether the First and Second Defendants owe the Plaintiff the sum of $597,000, plus interest, which the Plaintiff says she loaned to them as a partnership over the period 2015 to 2018.
2. The Plaintiff Van My Vuong (Van) is married to the Second Defendant, Y Banh (Y). Y is the sister of the First Defendant, Ngoc Lieu Banh (Lieu).
3. Lieu and Y were partners of the partnership trading as Tan Hoa Grocery (Partnership). The business of the Partnership was that of a Vietnamese grocer (Partnership business).
4. From 2008, Lieu and Y became embroiled in Supreme Court litigation with family members concerning their interests in the Partnership's and related entities' assets.
5. From 12 October 2015 to 24 April 2018, money was transferred from Van and Y's joint bank accounts on various occasions. A corresponding amount was then transferred to one of the Partnership overdraft accounts, the transfer described on the bank statements of Van and Y's joint bank accounts as 'Loan to TAN HOA'.
6. Van claims she entered into a verbal loan agreement with Lieu and Y on or about 12 October 2015 (the Loan Agreement), to lend money to the Partnership on an ongoing 'as-needs' basis, in order to assist with legal expenses associated with the Supreme Court litigation.
7. Van says that the money lent under the Loan Agreement amounted to $597,000 and no part of it has been repaid to Van and Van now claims repayment of that sum.
8. Lieu disputes that there was ever a Loan Agreement between Van and the Partnership.
9. Y initially disputed that the Partnership was liable to pay the debt, but now says there was a Loan Agreement between Van and the Partnership as asserted by Van.
10. For the reasons which follow, I am not satisfied there was a Loan Agreement between Van and Lieu and Y as the Partnership. Accordingly, Van's claim is dismissed.

1. The evidence from Van came primarily from a witness statement dated 22 December 2023[1] which had been translated from Vietnamese and which Van accepted as true. Van also gave further oral evidence, with the assistance of an interpreter, in response to questions from counsel in examination-in-chief, cross-examination and re-examination.
2. The evidence from Y came primarily from a witness statement dated 22 December 2023[2] which Y accepted as true. Y also gave further oral evidence, in response to questions from counsel in examination-in-chief, cross-examination and re-examination.
3. The evidence from Lieu came primarily from an affidavit dated 20 March 2023[3] which Lieu accepted as true. Lieu also gave further oral evidence, in response to questions from counsel in examination-in-chief, cross-examination and re-examination.
4. Each party filed a book of documents prior to trial, from which all relevant documents were tendered as an agreed series of exhibits at the conclusion of the trial.
5. Much of the factual context is not in dispute and is dealt with in Part 3.
6. The central issue in dispute is whether there was a Loan Agreement between Van and Lieu and Y as the Partnership. This is dealt with in Part 4.
7. The evidence in respect of the issue is set out in Part 5.
8. My assessment of the evidence and issues as to credibility and reliability of the evidence is set out in Part 6.
9. My findings as to the facts and resolution of the issue are addressed in Part 7.

1. Much of the factual context in this matter is not in dispute and is derived from the exhibits, as well as from the unchallenged evidence of the witnesses at trial and the pleadings. The following is a summary of the facts which are not in dispute.
2. In 1990 Y purchased a property at 181 Brisbane Street, Perth (181 Brisbane Street).
3. Y and Van married in 2006, they have three teenaged children together and currently live together at 181 Brisbane Street.
4. The Partnership business which traded from about 1985 to 2019 from premises at 177 - 179 Brisbane Street, Perth.
5. In 2015, the Partnership had an overdraft facility which was initially held with Pepper Finance Account ending 0236/2 (Pepper overdraft account) for the period September 2015 to December 2016.[4]
6. As at 9 October 2015, a further drawdown of $12,424.10 was available to the Partnership from this line of credit.[5]
7. In December 2016, Pepper Finance's loan portfolio was purchased by Bendigo Bank so from December 2016, the Partnership's overdraft facility was held with Bendigo Bank.
8. From December 2016 to February 2019 the Partnership had two Bendigo overdraft accounts; one account number ending 8884 (Bendigo 8884) with an overdraft limit of $100,000,[6] and one account number ending 3589 (Bendigo 3589) with an overdraft limit of $331,500.[7] In February 2019 these were then merged into another single account number ending 78918 with an overdraft limit of $400,000.[8]
9. Van was paid a weekly salary by the Partnership into her Commonwealth Bank Netbank Saver account number ending 5347 (Account 5347) which was in both her name and Y's name.
10. A further Commonwealth Bank Complete Access Account number ending 7086 (Account 7086) was also in Van and Y's joint names.
11. Account 5347 bank statements for the period 10 March 2015 to 9 September 2018[9] show the amounts paid into that account were predominantly Van's salary from the Partnership and an Australian Government family benefit paid to Van. Other amounts totalling $17,850 were also transferred from Account 7086,[10] apparently related to Medicare rebates and possible payment of dividends.
12. The balance of Account 5347 on 9 September 2015 was $424,262.[11]
13. From 12 October 2015 to 24 April 2018, money was transferred from Account 5347 into Account 7086 on various occasions. A corresponding amount was then transferred to one of the Partnership overdraft accounts. On each of those 148 occasions it was described as 'Loan to TAN HOA' on the bank statements of Account 7086. The Partnership overdraft accounts recorded each transaction as 'Payment Direct Credit Y BANH Loan to TAN HOA'.
14. The total sum transferred in this way was $577,000.[12] On some occasions, transfers were made on successive days, on other occasions in successive weeks or months.
15. From 12 October 2015, $500 was transferred on each occasion into the Pepper overdraft account. Between 1 August 2016 and 29 November 2016, $1,000 was transferred on each occasion into the Pepper overdraft account. From 2 December 2016 this amount increased to $5,000.
16. In late December 2016 the money was transferred into Bendigo 8884, other than on two occasions when it was transferred into Bendigo 3589. On the majority of occasions, $5,000 was transferred.
17. On 28 February 2018 a deposit of cash and cheque is recorded into Bendigo 8884 of $25,361.91.
18. From late December 2016 until 24 April 2018, Bendigo 8884 remained overdrawn by approximately $76,000 and $90,000 (out of the $100,000 limit). Between the same dates, Bendigo 3589 remained consistently overdrawn at approximately its limit of $331,500.
19. The last financial statement prepared for the Partnership was in 2017, for the financial year ending 30 June 2016. This financial statement was signed by Y and Lieu. A loan from Van was not referred to in 'liabilities' within that statement.[13]
20. Lieu and Y became embroiled in Supreme Court litigation with family members concerning their interests in the Partnership's and related entities' assets. Proceedings were commenced in 2008 by the elder siblings of Y and Lieu against them, their parents and other siblings, claiming a share in the assets of Tan Hoa Grocery and Tan Hoa Tanh Pty Ltd (2008 Proceedings). Further proceedings were commenced in the Supreme Court against Y and Lieu (2014 Proceedings).
21. Y and Lieu were represented in the Supreme Court proceedings by McCallum Donovan Sweeney (now MDS Legal).
22. By letter from MDS Legal[14] dated 14 December 2017 to Y and Lieu, it requested payment of a further $450,000 to be deposited into MDS Legal's trust account.
23. On 23 February 2018 and 23 October 2018, Van entered into two written loan agreements to lend Lieu and Y and others $20,000 and $100,000.[15] Those written loan agreements are not the subject of these proceedings. On each of those occasions, Van made payment directly to the trust account of a law firm.
24. Y and Lieu also entered into other written loan agreements during this time to pay for their legal fees.[16]
25. The total amount borrowed by Y and Lieu over all written loan agreements was approximately $850,000.
26. The Supreme Court litigation resolved by way of Deed of Settlement in November 2018.[17]
27. Prior to signing the Deed of Settlement, Lieu and Y engaged in mediation and discussed a resolution to the issues.
28. Their lawyer, Anthony Prime, sent Y and Lieu an email (email from Anthony Prime)[18] on 13 June 2018 setting out 'the liabilities' they had been discussing, including:
    1. Debt due to Y's wife - $500,000; ...
29. Y and Lieu subsequently signed a Heads of Agreement on 24 July 2018 (First Heads of Agreement).[19] This Agreement included the following:
    1. In consideration of the proposal they are jointly making to settle those matter ... they wish to record their agreement as to how they will deal with the balance of their assets and liabilities the subject of the Action and their interests in ... NL Banh and Y Banh t/a Tan Hoa Grocery ('THG') ... if the offer is settled.

1. Y will retain 181 Brisbane Street.
2. Y and Lieu will retain 189 Brisbane Street jointly as it is currently owned between them.

1. Any surplus funds at THG will be used to repay:

(a) The loan from Y's and Lieu's uncle, Lu Ha, (in the sum of $257,000 PLUS INTEREST) and

The loans from Y's sister in law (in the sum of $250,000 PLUS interest) and

(b) The amount detailed in Condition 9 of this Agreement.

(c) A further loan from Y's wife, capped at $500,000; if there is sufficient funds in THG to pay off this $500,000, Y is solely responsible to pay whatever balance is outstanding to his wife

1. Y and Lieu further agree that the uncle's loan in the sum of $257,000 plus interest due on the loan shall be paid in full first. The second payment to be made is in relation to full amount of loan from Y's sister-in-law and interest due. Then payment of the $20,000 loan plus interest due to Y's wife. Then payment (if any left) to be made to Y's wife and any shortfall is Y's responsibility to pay. If the surplus at THG is insufficient, Y will be responsible to pay his wife whatever amount is owed to her as at the time of making the repayment.
2. Y and Lieu will be jointly and equally responsible for amounts due to current creditors from the business up to a total limit of $40,000 (ie capped at a total limit of $40,000). All other current creditors' liabilities shall be the sole responsibility of Y to pay. Current creditors exclude those that form part of the ownership of property which will be dealt with as part of the dealing with that property.
3. Van sent a letter of demand in respect of the Loan Agreement through her lawyers, dated 14 June 2019 to Lieu.[20]
4. Van commenced this action on 21 August 2019.
5. On 16 February 2021, Y transferred to Van half ownership share of 181 Brisbane Street.[21]
6. In April 2021, Van and Y separated and entered into a Binding Financial Agreement (BFA) in the Family Court on 26 May 2021.[22] Pursuant to the BFA, Y's remaining half share in 181 Brisbane Street, valued in the BFA at $400,000, was transferred to Van on 31 May 2021.[23]
7. Since that time, Van and Y have resumed their relationship and are now residing together at 181 Brisbane Street.[24]
8. Lieu and Y signed a further Heads of Agreement on 7 November 2022 (Second Heads of Agreement).[25] This Agreement included the following:
   1. 189 Brisbane Street, the property shall be sold and from the net proceeds of sale (i.e. after deduction of sales commissions and settlement fees):
      1. An allowance for GST shall be paid to the ATO with the best current estimate being $160,000.
      2. $500,000 shall be paid to Van My Vuong in respect of her claim in the District Court action CIV 3180 of 2019.
      3. The balance shall be paid to Lieu and Y in the following proportions:

1. Y has commenced legal proceedings in the Supreme Court of Western Australia to wind up the Partnership with Lieu because Y and Lieu have not been able to come to an agreement on this and other issues. Those proceedings remain ongoing.

1. The central issue is whether a Loan Agreement was entered into on or about 12 October 2015 in the presence of and between Van and both Lieu and Y. It was not suggested that there was an agreement between Van and Y only, with Y acting as a representative of the Partnership or otherwise authorised by Lieu.

1. Van claims she entered into the Loan Agreement with Lieu and Y on or about 12 October 2015, to lend money to the Partnership on an ongoing 'as-needs' basis, in order to assist with legal expenses associated with the Supreme Court litigation.
2. Van says that, pursuant to the Loan Agreement, Y caused funds to be advanced from Van and Y's joint bank accounts, with her knowledge and consent, to the bank accounts of the Partnership during the period 12 October 2015 to 24 April 2018, in the total sum of $597,000.
3. Van submits the evidence of these payments is in the form of the bank statements showing payments, on each occasion titled 'Loan to TAN HOA', from Account 5347, via Account 7086, to the Partnership overdraft accounts, as well as a payment to the Partnership by way of bank cheque.
4. Van points to the First Heads of Agreement, signed by Lieu, which Van says is evidence Lieu acknowledged the existence of the Loan Agreement.
5. Van points to the two written loan agreements with Van,[26] and other written loan agreements with another family members, as evidence of the need of the Partnership to borrow funds at the relevant time.
6. Van says that it was a term of the Loan Agreement that the Partnership would repay Van any funds advanced to it if demand was made or when the Supreme Court proceedings in which it was involved was finalised.
7. Van submits that the transfer of the half share of the property at 181 Brisbane Street pursuant to the BFA was not connected to the Partnership, therefore could not and cannot be used to offset the debt arising from the Loan Agreement.

1. Lieu disputes that there was ever a Loan Agreement between Van and the Partnership and submits the evidence falls short of establishing there was one.
2. Lieu points to the issues in the evidence of Van and Y.
3. First, Lieu points to Van's affidavit dated 29 March 2021 in which Van said the Loan Agreement was made with Y only.[27]
4. Second, Lieu says Van's evidence about the terms of the Loan Agreement was vague and uncertain, or contradictory in respect of:

(a) How the payments would come to be made; that is who would request a payment, how, and for what purpose?

(b) When it was to be repaid; that is, was it when the Partnership had the means to repay, or when Van demanded repayment?

(c) How would the Partnership know or be advised what the amount of the loan is?

(d) How would any party to the Loan Agreement ever stop the advances?

1. Third, Lieu points to the absence of any reference in the BFA to this alleged Loan Agreement or any reference to outstanding liability on the part of Y in respect of this alleged Loan Agreement.
2. Fourth, Lieu says the Commonwealth bank account from which Van asserts she made payments pursuant to the Loan Agreement is a jointly held account with Y, and Van cannot prove she alone made these payments.
3. Fifth, Lieu says the Partnership overdraft accounts into which the payments were made were also jointly accessed by Y and there is no evidence:

(a) Whether this money was paid toward legal expenses, which was the purported purpose of the Loan Agreement, or

(b) That Lieu ever accessed this money, in circumstances where Y could have accessed it exclusively for his own benefit and there is evidence that Y accessed the Partnership accounts for his own personal expenses.

1. As a result of these issues, Lieu submits the court cannot be satisfied on the balance of probabilities that there was a Loan Agreement.
2. Even if the court were satisfied there was a Loan Agreement, Lieu says that most of the terms of the Loan Agreement relied upon by Van are uncertain and others are totally absent. As a result, Lieu says any Loan Agreement cannot be enforced because its terms are so obscure and so incapable of any definite or precise meaning, that the court cannot attribute to the parties any particular contractual intention.[28]
3. Lieu points to anomalies in the dealings between Van and Y as to the property at 181 Brisbane Street. Lieu says Van was transferred full ownership of that property in two transactions within approximately three months in 2021.
4. Lieu points to Y's change in position in respect of this action. Y filed a defence on 26 April 2023[29] in which he did not admit liability on the part of the Partnership to pay the amounts claimed by Van and did not admit that there was a Loan Agreement. However, Y now admits the Loan Agreement and admits liability on behalf of the Partnership.[30]
5. Lieu points to the fact that Y and Van are now reconciled, and that Y has commenced proceedings against Lieu in the Supreme Court to wind up the Partnership.
6. Lieu says that a reasonable inference to be drawn is that this is a case where Y and Van have decided, as part of the ongoing dispute with Lieu in respect of the Partnership, to fabricate a sham 'loan' and see if they can make Lieu liable.
7. As to the First Heads of Agreement, Lieu says that was an attempt by her to settle all claims and did not mean she conceded there was a Loan Agreement.

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

1. Van has the burden of proving on the balance of probabilities that:

(i) There was a Loan Agreement with Lieu and Y as a Partnership, and

(ii) Under the terms of the Loan Agreement Lieu and Y are liable for the debt of $597,000 plus interest, and

(iii) Lieu and Y have not repaid the sum in accordance with the Loan Agreement.

1. As to the burden of proof, 'It is well established that, while a more probable inference may fall short of certainty, it must be more than an inference of equal degree of probability with other inferences'.[31]
2. As to the nature of a loan agreement,[32]

a contract of loan of money is a contract whereby one person lends or agrees to lend a sum of money to another, in consideration of an express or implied promise to repay that sum on demand, or at a fixed or determinable time, or conditionally upon an event which is a certainty.

1. Interest may be claimed in accordance with the contractual terms applicable. Where there is no express or implied agreement to pay interest, there is no obligation at common law to pay interest, although there may be an implied obligation to pay interest if there has been a course of dealing between the parties where interest has been charged and paid on other accounts without objection.[33] This is also subject to any statutory provision which provides for interest on a proved debt.[34]
2. As to loan agreements in respect of a partnership, the Partnership Act 1895 (WA) provides:
   1. Partners bound by acts of firm

(1) An act or instrument relating to the business of the firm, done or executed in the firm-name, or in any other manner showing an intention to bind the firm by any person thereto authorised, whether a partner or not, is binding on the firm and all the partners.

(2) This section shall not affect any general rule of law relating to the execution of deeds or negotiable instruments.

1. Partner using credit of firm for private purposes

Where one partner pledges the credit of the firm for a purpose apparently not connected with the firm's ordinary course of business, the firm is not bound, unless he is, in fact, specially authorised by the other partners; but this section does not affect any personal liability which may arise against any other partner who has so conducted himself as to give reasonable ground to the party dealing with the partner first mentioned for believing him to be so authorised.

1. It is convenient to deal with the evidence of Van first, then Y, followed by Lieu.

1. Van said she and Y had always lived at 181 Brisbane Street.
2. Van said she commenced working at the Partnership in or about January 2007 and worked there seven days a week, typically 10 to 11 hours per day, until the business closed in 2019. She said she was paid a wage and her role included taking payments at the cash register, stocking shelves, ordering stock, providing customer service and banking.
3. Van said her wage was paid on a weekly basis into Account 5347.
4. Van said that, even though Account 5347 is in Y and her joint names, Y did not use that bank account at all. The reason Account 5347 was a joint bank account was so Y could assist Van with internet banking and carrying out transactions, because Van said she has very limited English and was not confident and had very little experience in carrying out internet banking. Van said none of the funds appearing in the Account 5347 bank statement were Y's funds.
5. Van said she knew that Y was not paid a wage by the Partnership but both Y and Lieu paid certain of their own expenses out of the Partnership's bank account and Y told her that payment of those expenses were treated as 'drawings' by the partners. Van said her understanding was the Partnership owed Y money, but she was not sure.
6. Van said that Y paid all their personal expenses, such as private school fees, medical expenses for the family, clothes for the children, and rates and taxes for 181 Brisbane Street. Van said this continued at all times.
7. Van said that Lieu worked at the Partnership from the time of the commencement of the business in 1985 and carried out various roles, including working at the checkout and being in charge of finances of the Partnership. Van said this involved Lieu dealing with the accountant and the completion of financial reports and tax returns.
8. Van said that, from her observations, Lieu worked full time at the Partnership until 2008, when Lieu started her own business. Van said Lieu then worked approximately 2 to 3 hours a day at the Partnership business.
9. Van said sometime in 2008 she became aware of the Supreme Court proceedings against Y and Lieu.
10. Van said she and Y regularly spoke about the Supreme Court proceedings and the financial affairs of the Partnership and matters affecting Y's financial interests. Van said Y would tell her about the difficulties the Partnership was having in keeping up with its financial commitments because of the legal costs of defending the Supreme Court proceedings, particularly that the legal expenses associated with defending the proceedings were draining the Partnership's funds and the Partnership required money to keep going.
11. Van said Y told her that the 2014 Proceedings were having a significant impact on the Partnership's financial position and the Partnership was using funds from the business, including funds available from an overdraft facility held by it to finance the litigation.
12. Van said the Supreme Court proceedings became very stressful and had an impact on both Y and Lieu, as well as an impact on her marriage to Y. Van said she was concerned about her financial position and that Y was wrapped up in trying to keep everything afloat.
13. Van said at different times in 2015, Y said to Van words to the effect that the Partnership had limited working capital because almost all of its funds had been used to defend the Supreme Court proceedings and he was concerned that there was a prospect that the Partnership would become insolvent.
14. Van said that from the beginning of 2015 she heard the overdraft limits had been reached.
15. Van said that on various occasions throughout 2015, the dates of which she cannot now recall, Lieu asked Y and Van to lend the Partnership money to help with the litigation costs. Van said she recalled a discussion in which Lieu said to her she was very concerned that the Partnership would go bankrupt because she was guarantor of all the Partnership's loans and overdrafts.
16. In the witness statement,[35] Van said on 12 October 2015, she and Y were working at the Partnership business, when Lieu came to the shop to deliver goods to be sold from her business and remained at the shop to discuss the Supreme Court proceedings. Van said she recalled that in the morning of that day 'we' (meaning Van, Y and Lieu) had a discussion regarding the need for the Partnership to have access to ongoing funds to fund the Supreme Court proceedings and to remain financially viable.
17. Van said in the witness statement[36] she recalled Lieu and Y saying that the Partnership was very close to its overdraft limit and was in urgent need of funds to use for working capital and to pay the ongoing legal costs. Lieu said to Van words to the effect of, 'Are you able to lend money to Tan Hoa Grocery?'
18. Van said she asked Lieu how much money would be needed, and Lieu said that what the Partnership needed was an ongoing ability to call for funds as and when needed and that it was unknown at that time how much was required.
19. Van said Lieu asked whether Van was able to loan funds to the Partnership on an ongoing basis as needed instead of transferring one amount upfront. Van said she told Lieu that she had a quite a lot of savings and Lieu said she was aware of this from discussions with Y.
20. Van said she told Lieu in the presence of Y that she would lend monies to the Partnership on an ongoing basis, as and when needed, but that she did need any money that was loaned to be repaid. Van said her thinking at that time was that she was happier to transfer funds to the Partnership only when needed because the funds would then still sit in her account and earn interest until they were transferred.
21. Van said nothing was said about interest to be paid on the monies to be loaned and she had no intention of charging interest for the loan she was planning to make to the Partnership as it was effectively to family members.
22. Van said she asked Y and Lieu when the Partnership would repay the monies to her. Lieu said words to the effect that she would not be repaid on a regular basis but would be repaid once the Supreme Court litigation was completed.
23. Van said there was no condition in the Loan Agreement as to what the money would be used for, and it was up to Y and Lieu how they spent it. Van agreed her Statement of Claim stated the loan was to pay legal fees.
24. Van said in her witness statement[37] that Lieu and Y told her there was a need for an immediate transfer of funds on that same day, 12 October 2015 and Van recalled Y telling her that he would arrange for a transfer of funds to be made on that date. Van referred to a transfer from Account 5347 on 12 October 2015 to Account 7086,[38] which Van said was the account from which monies were transferred to the Partnership bank accounts in respect of the loan advances.
25. In cross-examination, Van agreed she was vague in her recollection of it being on 12 October,[39] but that she had looked at the bank statements and that was the date the first sum was transferred.
26. Van was shown her affidavit sworn on 29 March 2021 in these proceedings,[40] and agreed that she stated:
    1. On or around 12 October 2015, I had a conversation with Y about loaning money to the Defendant.[41]
    2. The Defendant had been involved in litigation since 2015 that required funding, so Y asked me to loan money to fund the proceedings.
27. Van denied that what she had said in the affidavit was different and said any discrepancy in her evidence was because of an error in translation. Van said she had not had anyone help her translate this affidavit and it had been sworn at a time during the COVID-19 pandemic and when she was very stressed.
28. Van said whenever funds were required to be transferred to the Partnership as part of the Loan Agreement, Y, with her consent and approval, would transfer funds from Account 5347 to Account 7086 and then a further transfer would be made from Account 7086 to the Partnership bank accounts. Van said in evidence this was because of a bank policy which meant she could not directly transfer money from Account 5347, a savings account, to the Partnership account.
29. Van said there was no other reason for her to authorise or make payments of the sums advanced to the Partnership, that she did not owe the Partnership any money and had no intention of making capital investments into the Partnership business.
30. Van said Y would generally tell her in advance that he was going to transfer funds to the Partnership as part of the Loan Agreement, or that he had done so that day, and would tell her the amount. Van said, in the early stages, advances in the amount of $500 were made because there was a limit on the amount of the transfer that could be made, but after that Y told her that he took steps to raise that limit and the advances increased up to $1,000 and $5,000 on a particular day.
31. Van said she had never kept an independent record of those amounts but relied on the bank statements to record the amounts transferred. Van said she has never been repaid any part of the total sum of $597,000.
32. Van denied that she and Y lived out of Partnership money.[42] Van agreed Partnership money had paid for Y's credit card, although Van said that was covered by Y's 'drawings' from the Partnership.
33. Van said, in the period January to July 2018, she was told by Y on a number of occasions that the Supreme Court proceedings were getting to the point where a trial was to occur, and large sums of money were required to be paid into the lawyers' trust account to prepare for trial. Van said she was shown the letter from MDS Legal[43] requesting payment into MDS Legal's trust account.
34. Van said, at that time, Y told her that the Partnership did not have sufficient funds and asked her whether she could loan further monies to the Partnership to fund the litigation. Van said she agreed to do so as she understood there was no other option. Van said she knew that Lieu and Y also arranged for loans to be made to the Partnership by her younger sister, Trinh My Vuong, and from other family members.
35. Van said she entered into the two written loan agreements with the Partnership without having had any legal advice. Van said the written agreements were copied from another agreement that had been prepared with an uncle.
36. Van said she became aware from discussions with Y that the Supreme Court proceedings were resolved by way of a Deed of Settlement in December 2018. Van said since the Supreme Court proceedings were completed the Partnership has not repaid any of the monies advanced by her pursuant to the Loan Agreement.
37. Van said sometime after the Supreme Court proceedings were finalised, she asked Lieu to repay the loan and Lieu said words to the effect that she would do so. When Lieu did not pay, Van sent the letter of demand through her lawyers.
38. Van said that any reference in documents of an amount of $500,000 owing to Van, such as in the email from Anthony Prime and the First Heads of Agreement, can only be a reference to the Loan Agreement, because no other funds were owed to her by the Partnership.
39. In relation to the property at 181 Brisbane Street, Van said she is the current registered owner of that property which was transferred to her by Y in or about May 2021.
40. In cross-examination Van agreed she had been transferred a half share in February 2021 because Y wanted her to have 'piece [sic] of mind'.[44]
41. Van said in or about May 2021, she and Y entered into the BFA with respect to their assets and liabilities.
42. Van said that leading up to the BFA, their marriage had become very strained, and Van was uncertain as to whether it would continue. Van said this was primarily because of the financial stresses caused by the litigation to the Partnership. Van said in her witness statement[45] she also felt very unhappy that she had not been repaid all the money she had loaned to the Partnership. Van said they decided that it would be best to separate at that time and she discussed with Y the necessity of reaching a financial agreement to secure her position.
43. Van said she and Y both took legal advice and the BFA was signed.
44. Van said that, fortunately, over time she and Y have been able to be work through their differences and are now reconciled.
45. Van said she has retained ownership of 181 Brisbane Street.
46. Van denied that the BFA was connected with the Loan Agreement.

1. Y said he lives at 181 Brisbane Street with Van and his children. He said initially that he has always lived there with his family, but later said there was a period when he and Van were separated when he lived with a friend.
2. Y said he and his sister, Lieu, became partners in the Partnership in 1997 when Y purchased half of the interest in the Partnership from his brother, Van Thu Banh.
3. Y said, during the period 1997 to 2015, family members of Lieu and Y have worked from time to time in the Partnership business, including Van, who worked there from 2007 to February 2019.
4. Y said he worked full time in the Partnership business and Lieu worked full time in the Partnership business until 2008, when she started her own business. Y said, from 2008, Lieu worked in the Partnership business approximately 2 to 3 hours a day.
5. Y stated he would give financial documents to Lieu and Lieu would take them to the accountant for them to prepare financial statements and returns together. Y said he had not seen any financial statements for the Partnership since 2016.
6. Y said Van was responsible for attending to the cash register, packing goods and ordering stock, general customer service and, from time to time, would carry out banking. Y said Van was paid a wage for her services.
7. Y said his role at the Partnership business included ordering stock from overseas, buying and delivering goods, managing the warehouse and dealing with customs and quarantine.
8. Y said he also assisted with certain of the financial affairs of the Partnership but, in the main, the finances of the business were attended to by Lieu who also had all dealings and interactions with the accountants to prepare financial reports and tax returns.
9. Y said he and Lieu did not receive a salary from the Partnership, but the business did pay certain of their personal expenses and those payments were treated as 'drawings' by the two partners.
10. Y said this was mainly by paying for items with the Partnership credit card.[46]
11. Y stated he drew from the Partnership accounts because it owed him the money because he did not take a wage. Y said such payments came out of the 'drawing account' or his 'proprietor's fund'. Y agreed he used Partnership funds to pay for personal expenses such as rates and taxes on 181 Brisbane St and school fees. Y agreed he paid for all Van's personal expenses in this way. In cross-examination, Y accepted examples of such expenses between 12 and 31 October 2016 totalling $5,236.91.[47]
12. Y stated that Lieu had also paid for her own personal expenses in this way.
13. Y said that about a year after he and Van married, commercial disputes arose involving his extended family and the Partnership resulting in the Supreme Court proceedings being commenced in 2008. Y said the 2008 Proceedings were substituted for new proceedings in 2014.
14. Y said the Supreme Court proceedings were defended by he and Lieu.
15. Y said by about 2015, the legal costs in defending the Supreme Court proceedings mostly had exhausted the Partnership's overdraft facility and the costs were becoming unmanageable.
16. Y said at the start of 2015, the anticipated legal costs as advised to him by MDS Legal were significant and it was reaching the point where the ongoing litigation was causing the Partnership financial stress.
17. Y said the Partnership needed another source of funds to ensure he and Lieu could continue to engage lawyers to defend the Supreme Court proceedings.
18. Y said he regularly discussed with Van the difficulties that the Partnership was experiencing in funding the litigation and the financial impact it was having on the Partnership. Y said, on occasions he discussed with this Van alone and on other occasions in the presence of Lieu.
19. In his witness statement,[48] Y said on 12 October 2015, both he and Van were present with Lieu at the Partnership business when Lieu asked Van whether Van could lend money to the Partnership.
20. Y stated that on that day and in his presence, Lieu asked Van directly whether she was able to loan funds to the Partnership to assist it with its financial position and that Lieu said words to the effect that money would be needed on an ongoing basis rather than in one lump sum.
21. Y said he knew at that time that Van had saved up a considerable amount of money in her bank account over many years and was in a position to assist with the loan.
22. Y said at the meeting Van asked Lieu whether monies were required to be advanced upfront or whether payments were required to be made from time to time. Y said he and Lieu both told Van that the better way forward was for Van to advance funds to the Partnership on an ongoing basis and when needed.
23. Y said there was no discussion concerning payment of any interest.
24. Y said Van did ask Lieu when those monies would be repaid, and Lieu said to her words to the effect they will be repaid after the Supreme Court litigation has been resolved. Y said he told Van he was in agreement with that, and Van would be repaid after the court matters were finalised.
25. Y stated Van said she was prepared to advance monies to the Partnership on that basis.
26. Y said he and Lieu told Van that an advance was needed that day and Van agreed to that.
27. Y said, shortly after that meeting and on the same day, he discussed with Van the best way of arranging for transfer of the loan amounts to the Partnership.
28. Y stated that all the funds in that Account 5347 were Van's and the only reason he was a joint account holder was when the account was opened, Van requested he be a joint holder to assist her because he was experienced in banking matters, and Van was not, and she did not know how to operate internet banking facilities. Y further stated Van's English is limited and he would be able to help her.
29. Y said he told Van that he would cause the transfers under the Loan Agreement to be made to the Partnership when the money was needed but would clear that with her on each occasion. Y stated that Van said that was fine and that she trusted Y.
30. In cross-examination, Y agreed he had no independent recollection of the Loan Agreement being made on 12 October 2015 but that it was something he remembered from looking back at the bank statements, because 12 October 2015 was the date on which he first transferred money. In re-examination, Y said it could have been a few days or a week prior to 12 October 2015.[49]
31. In his witness statement,[50] Y said on almost every occasion he caused Van's money to be transferred to the Partnership, he either told her before or shortly after a transfer was made.
32. Y said he couldn't make the transfers directly from Account 5347 to the Partnership account, but first had to make an online transfer to Account 7086, and then to the Partnership account.
33. Y said payments were made to the Partnership overdraft accounts, which was initially the Pepper overdraft account and later to the Bendigo Bank overdraft accounts.
34. Y stated that all of the amounts paid into the Partnership overdraft accounts as set out in Van's Statement of Claim were monies advanced by Van to the Partnership on the basis of the arrangements reached on 12 October 2015 between Lieu, himself and Van.
35. Y stated the Partnership has not repaid any of the amounts loaned to it by Van. Y said he never worked out the total amount so did not discuss the total amount with Lieu or Van.[51]
36. Y said initially loan advances were made in smaller increments and later increased after he lifted the amount that could be transferred from the bank accounts on any given day.
37. When asked whether there was a pattern to the payments, Y said:[52]

There's a pattern because when interest - because the overdraft have a lot of interest and when the interest the end of the month and I would, or when there's a bill from the legal fees are coming in, I needed that fund to pay off.

1. Y said that he never discussed with Lieu what the money received by the Partnership under the Loan Agreement would or could be used for.
2. Y said Lieu could have had access to the overdraft accounts and the bank statements. When it was put to Y that Lieu did not know about the change in account from Pepper to Bendigo or that she did not have access to the accounts, Y said, 'I don't know'.[53]
3. Y said after receiving the letter from MDS Legal,[54] the Partnership entered into various written loan agreements with family members to raise funds to cover the requirements of the solicitors. Y said he followed the template of the written loan agreement with his uncle when creating all the written loan agreements at the time.
4. Y agreed all the amounts loaned pursuant to the written loan agreements amounted to around $850,000 and was paid directly to the lawyers on trust.
5. Y stated that when he initially filed a defence in these proceedings and did not admit the Partnership was liable pursuant to the Loan Agreement, he did so on advice from his then legal representatives. Y said he was told by doing that he was not denying the existence of the Loan Agreement and that at no time has he ever maintained that the Loan Agreement was not concluded. Y agreed his Statement of Defence says he 'does not admit the Partnership is liable' to pay the debt.[55]
6. Y said the reference in the First Heads of Agreement to 'further loan from Y's wife, capped at $500,000' is a reference to the Loan Agreement.
7. Y also referred to the email from Anthony Prime and said that the reference to a debt to Van in the sum of $500,000 is a reference to the Loan Agreement. Y stated the Partnership did not owe and has never owed Van any other monies.
8. Y agreed there are many issues between him and Lieu which they were trying to settle through the First and Second Heads of Agreement and mediation.
9. In relation to 181 Brisbane Street, Y stated that in 2020 he and Van were experiencing severe financial issues which placed tremendous strain and stress on their relationship. Y said they had three young children and were dealing with various court cases and family disputes which caused them to be both very stressed, overworked and fighting with each other.
10. Y said in late 2020, to try and improve things between he and Van, he agreed to and decided to transfer half of the ownership of 181 Brisbane Street to her. Y said he did this to show Van that he was committed to the marriage and in order to provide her with financial security, because Van told him she was feeling particularly vulnerable at that time.
11. Y said that, unfortunately, the gesture did not resolve the issues and they decided to separate. Y said they both retained lawyers and began to negotiate the division of their matrimonial assets.
12. Y said this resulted in he and Van entering into the BFA on 26 May 2021, under which Y agreed to transfer his remaining half interest in 181 Brisbane Street to Van.
13. Y denied that the transfer of 181 Brisbane Street was part of the repayment of the Loan Agreement to Van.
14. Y said, for various reasons, he eventually started having discussions with Van to re-establish their relationship and that he and Van now live together and have to a large extent resolved their differences.
15. Y stated the Loan Agreement was not referred to in the BFA because it was monies loaned by Van to the Partnership and was not a loan from Van to Y personally. Y said, while he understood that he and Van were dividing their assets with the BFA, he did not understand his interest in the Partnership to be an asset.[56]
16. Y then agreed his interest in the Partnership was listed as an asset in the BFA,[57] but it was given no listed value because he did not know how much it was worth and did not think to reference the bank statements of the Partnership accounts.[58]
17. Y said that he never thought about how the money pursuant to the Loan Agreement would be repaid in those circumstances.[59]
18. Y referred to the financial statements of the Partnership for the year ended 30 June 2016[60] and agreed the Loan Agreement is not mentioned at all.
19. Y stated he just signed them at the time and did not read them because he trusted Lieu and because he was stressed and busy.

1. Lieu said she and her brother, Y, were the proprietors of the Partnership business although Lieu has not worked there since 2008. Lieu said the Partnership business was then solely managed by Y until it closed in 2019.
2. Lieu said after 2008, she only went to the Partnership business to deliver items from her own business. Lieu said she would stay to help by cleaning, serving customers but that she did not prepare any financial documents or go to the accountant after 2008.
3. Lieu said that since 2008 she has received no money or benefits from the Partnership. In cross-examination, Lieu agreed she had received benefits in the form of payment of her legal fees for the Supreme Court proceedings and her Partnership share of profits. Lieu stated that she meant she had not received any benefit in the form of payment of her personal expenses since 2008. Lieu said she chose not to access the proprietor's fund in order for the Partnership business to grow.
4. Lieu said she had no knowledge of and did not consent to any loans of money being made between Van and Y and the Partnership and/or Lieu. Lieu said there never was any Loan Agreement.
5. Lieu said, in relation to any such Loan Agreement, Y had no authority to act for Lieu.
6. Lieu stated she had never asked Van for a loan and had never discussed with her Van's private bank accounts or financial position. Lieu said she does not know why money was going into the Partnership overdraft accounts from Van; that Lieu did not ask for it and Van has nothing to do with the Partnership.
7. Lieu said in 2015 she did not know the Supreme Court proceedings were causing a financial drain on the Partnership because when she left Y in charge, only $100,000 was owing on the overdraft account. Lieu said she did not go to the Partnership business in 2015 and that she only went there in late 2017 or early 2018.
8. Lieu said she did not have anything to do with the Partnership's finances or accounts after 2008; that was Y's sole responsibility. Lieu said Y was responsible to sign the cheques and pay the bills, including the legal fees. Lieu said Y did not tell her there was any issue with the overdraft account, in particular whether it was overdrawn.
9. Lieu said all Y told her was that the profit the Partnership received through rent was to pay the legal bills.
10. Lieu said she did not receive any bank statements for the Partnership accounts and did not have access to information to access the accounts, including the account numbers. Lieu said she did not ask Y for them, and Y did not give them to her.
11. Lieu said she had signed the Partnership's Financial Statement relating to the financial year ending 30 June 2016,[61] but that Y had prepared it.
12. Lieu said there were constant payments passing between the accounts of Y and the Partnership and Van. For example, Lieu stated Y would remove funds from the Partnership account to pay for personal loans and credit card debt. Lieu also said Van was paid a wage of $822 per week from the Partnership account but, to Lieu's knowledge, was not employed by the Partnership during those relevant years.
13. Lieu said there is an ongoing dispute between her and Y concerning their affairs and, in particular, concerning the ownership and disposal of Partnership assets.
14. Lieu said they participated in mediation in relation to the Supreme Court proceedings in 2018 and that, prior to the mediation, she and Y signed the First Heads of Agreement.
15. Lieu said it was around this time Y first raised that Van was owed $500,000. Lieu referred to the email from Anthony Prime and said this was the first time she had seen a reference to it. Lieu said Y and the lawyer had discussed it prior to the email being sent and not in her presence.
16. Lieu denied that in signing the First Heads of Agreement she conceded there was a Loan Agreement with the Partnership and Van. Lieu said she only signed the First Heads of Agreement in order to try and settle the disputes and to move on. Lieu said she thought the mediation would resolve everything and that, pursuant to the First Heads of Agreement, if there was no money left in the Partnership, Y would pay the debt.
17. Lieu agreed she signed the Second Heads of Agreement during further mediation attempts. Lieu said she had been misled during the mediation because she was not told that 181 Brisbane Street had been transferred in its entirety to Van.
18. Lieu says, consequently, the property at 181 Brisbane Street, which Lieu says is valued at well over $1,000,000,[62] has been transferred in full to Van, the plaintiff in these proceedings from Y, a defendant in these proceedings.

1. There were issues with the credibility and reliability of all three witnesses.
2. In respect of Van's evidence, a number of issues arose which cause me to doubt her reliability or credibility.
3. First, Van was vague about whether she had an independent recollection[63] of the date and circumstances of the making of the Loan Agreement.
4. Second, Van's evidence at trial about with whom she made the Loan Agreement was inconsistent with the content of Van's earlier affidavit dated 29 March 2021[64] in which she said the Loan Agreement was with Y only.
5. Third, Van gave no evidence at trial about a bank cheque for $20,000 deposited into Bendigo 8884 on 28 February 2018 which was purportedly part of the total sum loaned pursuant to the Loan Agreement.[65]
6. In respect of Y's evidence, a number of issues arose which cause me to doubt his reliability or credibility.
7. First, Y had no independent memory of the date and circumstances of the making of the Loan Agreement.[66]
8. Second, Y's evidence at trial as to the liability of the Partnership to pay the debt to Van was inconsistent with the defence Y lodged in April 2023.
9. Third, Y's evidence about the financial needs of the Partnership in October 2015, which he said gave rise to the need for the Loan Agreement commencing on 12 October 2015, was not consistent with the corresponding evidence of the Pepper overdraft account, which was, at that time, not overdrawn. Further, there was no evidence in the Pepper overdraft account statement that there was a need for the Partnership to cover a significant debit or debits to that account, such that the Loan Agreement was needed to commence at that specific time.
10. Fourth, Y's evidence about when payments would be made pursuant to the Loan Agreement was inconsistent with the bank records. There was no pattern evident in the Partnership overdraft accounts that corresponded with payments pursuant to the Loan Agreement coming in, and consecutive expenditure pursuant to large legal bills or interest going out.
11. Fifth, there were other aspects of Y's evidence which were evasive, implausible or unreliable, for example;

(i) Y's evidence that he had, on more than one occasion, not properly read or understood documents, or that they did not accurately reflect the true position; for example the 2016 Financial Statement, the BFA and his Statement of Defence, and

(ii) Y's evidence that he never calculated the total amount of money borrowed by the Partnership pursuant to the Loan Agreement, or that he never turned his mind to how it might be repaid by the Partnership, in circumstances where transfers of $1,000 to $5,000 were sometimes made daily, over a period of years and Y must have apprehended the total amount would be significant.

1. In respect of both Van's and Y's evidence, other common issues arose which cause me to further doubt their reliability or credibility.
2. First, there was inherent implausibility of their evidence about the terms of the Loan Agreement, in particular that it was expressed to be without any limits as to amount, duration, and what the money was to be used for, and the terms were vague as to when and how it would be repaid.
3. This implausibility was highlighted by the absence of any records, other than bank statements, to record the significant sums of money loaned or how that money had been spent. It was also inherently implausible when other lesser amounts loaned by Van were in written agreements.
4. Second, there were common aspects of Van's and Y's evidence which were generally evasive, implausible or unreliable, for example;

(i) The circumstances in which property at 181 Brisbane Street was transferred to Van,

(ii) The Loan Agreement was not referred to in the BFA, even though Y had apparently assumed personal responsibility to pay any outstanding debt to Van in the First Heads of Agreement some years earlier,

(iii) The financial arrangements by which Van continued to receive an income from the Partnership business and continued to have the family's personal expenses paid by Y, through Partnership accounts, even though the Partnership was struggling financially such that it needed to enter into significant loan agreements.

1. There were also issues in respect of Lieu's evidence and its reliability.
2. First, there were inconsistencies in Lieu's evidence about whether she received a financial benefit from the Partnership after 2008.
3. Second, Lieu signed the First Heads of Agreement which referred to a debt owing to Van capped at $500,000.
4. However, Lieu's evidence about the circumstances in which she came to sign the First Heads of Agreement was more consistent with the content and wording of it when it referred to a debt owed to Van. The relevant portions of the First Heads of Agreement make clear any such amount owing to Van is to be paid last in the line of creditors and that Y is to bear the ultimate personal responsibility for such payment, over and above the Partnership.
5. This wording and its clear intent is more consistent with Lieu's evidence that she was not conceding the existence of such a debt and that, in signing the First Heads of Agreement, she was attempting to resolve many outstanding issues between her and Y.

1. Based on the undisputed evidence, which has been set out in Part 3, I can make the following principal findings of fact:
   1. Payments described as 'Loan to VAN HOA' were made from the joint accounts of Van and Y, to which both Van and Y had access,
   2. Corresponding payments described as 'Payment Direct Credit Y BANH Loan to TAN HOA' were made to the Partnership overdraft accounts,
   3. These payments were made from 12 October 2015 to 30 June 2018 in the total amount of $577,000,
   4. A loan of $500,000 from Van to the Partnership was later referred to in the email from Anthony Prime and in the First Heads of Agreement signed by Y and Lieu, and
   5. A loan of any amount from Van to the Partnership was not referred to in the 2016 Financial Statement of the Partnership or in the BFA between Van and Y.
2. These findings do not point unequivocally to the existence of a Loan Agreement.
3. There are significant issues with the credibility and reliability of the evidence of Van and Y, outlined above at [206] - [219], which mean that I cannot accept their evidence about the Loan Agreement as truthful or reliable.
4. While there were some issues with the evidence of Lieu also, these issues carried less weight than those in respect of Van and Y's evidence and overall, Lieu's evidence was more persuasive. Lieu's evidence was also generally more consistent with the uncontested evidence, as discussed above.
5. The findings of fact I am able to make give rise to number of competing inferences, aside from the existence of a Loan Agreement as claimed by Van.
6. One inference arises that there was an agreement between Van and Y, to which Lieu was not a party.
7. A further inference is that there was never an agreement between any of the parties.
8. Based on the evidence, and my findings in respect of the evidence, I am unable to conclude that an inference there was a Loan Agreement has any more than an equal or lesser degree of probability than any of the other inferences.
9. For these reasons, I cannot find on the balance of probabilities there was a Loan Agreement.
10. The claim by Van is therefore dismissed.

I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.

[28] Upper Hunter County District Council v Australian Chilling & Freezing Co Ltd [1968] HCA 8; (1968) 118 CLR 429.

[29] Second Named Defendant's Defence dated 26 April 2023.

[31] AIG Insurance Australia Ltd v McMurray [2023] WASCA 148 [226], Lithgow City Council v Jackson [2011] HCA 36; (2011) 244 CLR 352 [94].

[32] Chitty on Contracts (31st ed, 2012), pars 38 - 253.

[33] Great Western Insurance Co v Cunliffe 1874 Law Reports 9, ch 525.

[34] Supreme Court Rules 1971 (WA) O 61 div 5 r 23(2).

[41] Originally the Defendant in these proceedings was the Partnership entity.

[55] Second Named Defendant's Defence dated 26 April 2023.

[62] Note in Exhibit 18, page 306 in the BFA, 181 Brisbane Street valued at $800,000.

[65] Plaintiff's Substituted Statement of Claim dated 6 April 2023.