Dobrinski v Slade

District Court of NSW|2010-12-07|Before: Gleeson CJ, Mathews JJ

CITATION: Dobrinski v Slade [2010] NSWDC 297

(1) Judgment for the plaintiff for $514,941.60. DECISION: (2) Defendant pay plaintiff's costs. (3) Note that the pre-judgment interest is agreed between the parties at $342,838.87. (4) Exhibits retained for 28 days.

CATCHWORDS: CONTRACT - loans made in a family situation - whether the defendant is the borrower - impact of promises to repay outstanding loans on sums borrowed outside the limitation period - whether a defence of "forgiveness" of the loans is available

Abalos v Australian Postal Commission [1990] HCA 47; (1990) 171 CLR 167 Agricultural and Rural Finance Pty Ltd v Gardner [2008] HCA 57 Allen v Tobias (1958) 98 CLR 367 Bank of China Limited v CGS (Group) Pty Ltd [2009] NSWSC 379 Channel Seven Sydney Pty Ltd v Mahommed [2010] NSWCA 335 Cordon Investments Pty Ltd v Lesdor Properties Pty Ltd [2010] NSWSC 1073 Delany v Tenison (1758) 3 Bro PC 659 ; 1 ER 1559 Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 Giorginis v Kastrati (1989) Aust Torts Reports 80-233 CASES CITED: Graves v Legg (1854) 9 Exch 709 ; 156 ER 304 Gray v Haig (1854-1855) 20 Beav 219 ; 52 ER 587 NWR FM t/as North West Radio v Broadcasting Commission of Ireland [2004] IEHC 109 R v Logue (NSW Court of Criminal Appeal, 31 March 1994, Gleeson CJ, McInerney and Mathews JJ, unreported) Rosebanner Pty Ltd v Energy Australia [2009] NSWSC 43 Shepparton Projects Pty Ltd v Cave Investments Pty Ltd [2010] VSC 504 Société D'Avances Commerciales (Société Anonyme Egyptienne) v Merchants' Marine Insurance Co (The "Palitana") (1924) 20 Ll L Rep 140 State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (In Liq) [1999] HCA 3; (1999) 73 ALJR 306 The Nominal Defendant v Kostic [2007] NSWCA 14 The Ophelia [1916] 2 AC 206

PARTIES: Plaintiff: Irene Dobrinski Defendant: Roslyn Slade

COUNSEL: Plaintiff: Mr R Seton SC/Ms H Durham Defendant: Ms M Anastasi

SOLICITORS: Plaintiff: The Norton Law Group/ Lapaine Pomare Forster Defendant: Livingstone & Company

[1] The plaintiff, by Second Amended Statement of Claim (filed 31 August 2009), claims $514,941.60 plus interest from the defendant, her daughter. The plaintiff claims she made the defendant a series of loans, some of which were repaid, leaving the sum claimed as the balance outstanding. The moneys which the plaintiff seeks to recover were advanced to the defendant or, at the direction of the defendant, to a third party, in a series of 36 transactions occurring between May 2002 and December 2006.

[2] The plaintiff's claim is in contract. She claims that the defendant asked her for a series of loans for specified sums and purposes, some of which were interrelated (such as loans pending sale of real estate). The defendant either agreed to repay each of these amounts separately or to repay the individual sums in a lump sum after particular events, such as the sale and purchase of real estate.

[3] While each of these conversations created an enforceable loan agreement, the plaintiff further argues that each time the defendant promised to repay either the latest in the series of loans, or that loan together with other outstanding loans, a new loan agreement was entered into. This new agreement covered both the new loan being sought at the time of the conversation as well as some or all of the other sums previously owed by the defendant to the plaintiff. The defendant's new promises were supported by consideration, in that the plaintiff promised to loan these further amounts. Each new promise therefore gave the plaintiff the benefit of overlapping different contractual promises to pay the same debt.

[4] The defendant's explanation of the sums is very different. The defendant agrees that the sums identified by the plaintiff (the quantum of which is generally not in dispute) were advanced by way of a loan or loans, all of which are asserted to have been repaid or forgiven, and the balance of the moneys advanced is claimed to have been a loan or gift to the defendant's daughters, Michelle Slade and Amanda Slade. These can be summarised as follows: (a) Loans for the period May 2002 to December 2002, repaid on 17 February 2003

(b) $6,000 which the plaintiff sent to the defendant on or about 23 July 2002. It is claimed this amount was sent to the defendant by the plaintiff in error. The cheque was banked by the defendant but repaid in cash, it is asserted, in or about August 2002.

(c) Sums advanced to the defendant by the plaintiff between 7 February 2005 and 22 March 2006. It is asserted that these amounts were initially loans but were later "forgiven" and asserted to be gifts and/or to form part of the defendant's future inheritance upon the plaintiff's death.

(d) An amount of $5,000 paid on or about 22 November 2006 which, it is asserted, the defendant repaid to the defendant in cash.

(e) The balance of the moneys owed were cheques made out to a business known as "Trilogie Kids" or "Amanda Slade" or "Michelle Slade" or to both "Amanda and Michelle Slade".

(f) The defendant and her husband were two of the four equal shareholders in this business and the defendant and her husband worked in the business without pay. The defendant claims to have had no knowledge of any of the loans, and to have taken no part in the activities of her daughters in asking the plaintiff for advances, nor did she agree to repay them. These are the amounts set out in items d, e, l, n, q, r, s, t, u, v, w, x, y, z, aa, cc, gg in the schedule below.

(g) In addition, there are loans the plaintiff claims to have made but which are denied. Two of these amounts have been conceded by the plaintiff. The first is the cheque for $15,000 on 11 May 2002, where there is no information on the cheque butt to indicate to whom this amount was paid. The second is the amount of $15,000 paid on 6 June 2002 simply has "Westpac" on the plaintiff's cheque butt. The plaintiff has also conceded item hh in the list set out below. However a cheque of $3,891.60 payable on 11 September 2002 made pay able to "Fullerton Croft Pty Ltd" is claimed by the plaintiff although denied by the defendant.

(h) These loans commenced in 2002 and in relation to the loans up to item w, the defendant relies upon s 14 of the Limitation Act 1969 (NSW) in the event that a finding is made that these items were loans or otherwise amounts for which the defendant is liable (written submissions, paragraph 3).

[5] The lack of formal documentation is a significant problem in establishing the facts relating to each of these transactions.

[6] The issues for determination are: (a) Whether the plaintiff is entitled to recover the balance of $514,941.60, plus interest, being the balance remaining from the sum claimed less the transactions which are no longer pressed (transactions c, f and hh) as amounts owing by reason of a contract or contracts entered into by the plaintiff and defendant.

(b) Whether any loans and/or amounts for which the defendant is liable entered into prior to either 31 June 2003 or alternatively six years as from the filing of the Amended Statement of Claim, namely 24 February 2004 (s 14 Limitation Act 1969 ) or whether the loans in question were entered into, covering not only the amount sought at the time but all other sums then owed, there being asserted to be promises of repayment: Bank of China Limited v CGS (Group) Pty Ltd [2009] NSWSC 379.

(c) Whether the plaintiff "forgave" any loans to the defendant: Agricultural and Rural Finance Pty Ltd v Gardner [2008] HCA 57.

(d) Individual issues of fact in relation to each of these loans, many of which are dependent upon findings as to the credit of the plaintiff and defendant and of the witnesses called in these proceedings.

[7] It should be noted that the defendant has not pleaded, and does not rely upon, any claim of election (which would require inconsistent rights), variation (which requires consideration), detrimental reliance or the doctrine of advancement. This is a claim for debt, and the parties have proceeded as if the plaintiff and defendant are not in the position of mother and daughter, and are simply parties to an alleged series of loans. While paragraph 8(b)(i) and (ii) claim that the moneys were paid as a gift, and that the plaintiff expressly waived her entitlement for repayment, this is the extent to which any claim of forgiveness is put in the pleadings.

[8] Transactions c, f and hh are no longer pressed and the plaintiff's written submissions concede an amount of $30,000 which the plaintiff in cross-examination denied receiving was in fact received.

[9] I shall first set out a table for each of the transactions and review the evidence of the parties.

[10] The transactions have helpfully been summarised by the parties in a table as set out as an annexure to this judgment.

[11] While there is general agreement about the quantum of these loans, the question of to whom they were made is an important issue.

[12] Both parties' written submissions deal extensively with the credit of the parties and witnesses. The issue of credit, while forming part of the analysis of evidence in determining disputed issues of fact, needs to be considered very cautiously.

[13] Attacks on a witness's credit may be made on a number of bases: (a) Where independent evidence such as a business record or document of public record shows that a person has told a lie on an issue material to the case.

(c) Where witnesses are unable to produce documents which clearly should be in existence, such as financial records, or repeatedly assert they are unable to remember events ( R v Logue (NSW Court of Criminal Appeal, 31 March 1994, Gleeson CJ, McInerney and Mathews JJ, unreported) per Gleeson CJ).

(d) Where the "demeanour" of the witness in the witness box, such as the manner of answering questions, is challenged. This kind of evidence should be approached with great caution, for the reasons explained by the NSW Court of Appeal in The Nominal Defendant v Kostic [2007] NSWCA 14 at [44] ff.

[14] The interaction between demeanour credit findings and other evidence were recently emphasized by Spigelman CJ in Channel Seven Sydney Pty Ltd v Mahommed [2010] NSWCA 335 noted, at paragraphs [6]-[9]: "6 So far as questions of reputation are concerned, a demeanour-based credit finding, may be problematic. Although credit findings are an integral part of the fact finding function of a trial judge, a demeanour-based credit finding, which is often critical in the determination of a case, is far from scientific. It is a finding based upon the experience of the trial judge having seen and heard the individual in person: Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 at [65]; see also Abalos v Australian Postal Commission [1990] HCA 47; (1990) 171 CLR 167 at [178]. Ipp JA, in "Problems with Fact-Finding" (2006) 80 Australian Law Journal 667, said that a demeanour-based finding is " determined by a judge's subjective experience, intuition and common sense ".

7 It is unremarkable to observe, therefore, that a demeanour-based credit finding in respect of an individual may vary as between judges. This is undoubtedly why Atkin LJ observed in Société D'Avances Commerciales (Société Anonyme Egyptienne) v Merchants' Marine Insurance Co (The "Palitana") (1924) 20 Ll L Rep 140 at 152:

"… I think that one ounce of intrinsic merit or demerit in the evidence, that is to say, the value of the comparison of the evidence with known facts, is worth pounds of demeanour."

8 The problematic nature of a demeanour-based credit finding was examined by Kirby J in State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (In Liq) [1999] HCA 3; (1999) 73 ALJR 306. His Honour stated, at [88]:

"There is a growing understanding, both by trial judges and appellate courts, of the fallibility of judicial evaluation of credibility from the appearance and demeanour of witnesses in the somewhat artificial and sometimes stressful circumstances of the courtroom … Apart from all else, demeanour is, in part, driven by culture … Distaste or prejudice can cloud evaluation …"

9 A credit finding can be devastating, both personally upon the individual whose credit has been impugned, and in respect of that person's reputation. Hence the importance, where available, of confirmatory or corroborative evidence to assist or support a demeanour finding."

[15] Spigelman CJ was considering the importance, to the trial judge, of being able to make findings about a witness's demeanour which depend upon personal observation rather than upon the credit finding of another judge. However, these statements of the relevant principles are of wider utility, and I have been careful, when making findings as to credit, to take into account the importance of contemporaneous documents and to consider carefully the matrix of facts upon which such findings should be based.

[16] I now summarise the evidence of the parties concerning the history of the loans.

[17] The plaintiff was born on 30 March 1924 and is now 86 years old. She migrated to Australia in 1946 with her husband, Reginald Goldman. She had two children, Roslyn Slade (the defendant) and Barry in 1948 and 1950. Her husband died on 11 June 1968 and she subsequently married her second husband on 20 August 1971.

[18] Mrs Dobrinski gave her evidence in a clear and straightforward manner, despite her age, and showed a good recall of events. Although physically very frail, deaf and only able to walk very slowly with a stick, she remains mentally alert and was able to answer questions succinctly and in a straightforward manner.

[19] The evidence points to the plaintiff being an active, helpful and kind person who was continually helping neighbours, as the defendant herself said, when describing her mother's neighbourhood activities, as well as events in the family's own history. In particular, in December 2001 the defendant and her husband had a major falling out, which led to the defendant and her two daughters going to live with the plaintiff, in or about December 2001. While the defendant only remained there a short time before becoming reconciled with her husband, the two girls remained for a longer period of weeks or perhaps months.

[20] Michelle and Amanda both gave evidence that they were angry with their father and had no contact with their mother over this period. However, it is not in dispute that in early 2002 the plaintiff decided to sell her home unit at Woollahra and move to a retirement village known as "Tarragal Glen" in Erina. All of the witnesses agree that prior to entering into the purchase, the plaintiff, the defendant and the defendant's daughters Michelle and Amanda travelled to Erina to look at the retirement village unit that the plaintiff was intending to purchase.

[21] The plaintiff sold her Woollahra unit for approximately $1,050,000 and as she used only part of the sale proceeds to buy the retirement village unit at Tarragal Glen, the balance was deposited in her Cash Management account at the Westpac Bank. She moved to Tarragal Glen retirement village on or about 2 May 2002, and the defendant's first request for a loan was made on 11 May 2002.

[22] At the same time, the defendant and her husband had sold their home in Strathfield and bought another property in Sydney. The defendant, her husband and their two daughters had been involved for some years in a children's clothing business known as "Club 55". It had not gone well. The defendant did not seek bridging finance from a bank or other financial institution but instead spoke to the plaintiff and asked her to loan money to purchase a unit in Sydney on the basis that she would be repaid when the property that the defendant and her husband intended to purchase was sold.

[23] Between 11 May 2002 and 13 December 2002, the plaintiff advanced the following sums to the defendant in accordance with the summary of transactions set out above.

Date Amount Payable to a. 11 May 2002 $12,500.00 R. Slade b. 16 May 2002 $32,500.00 E.H. Hibble Real Estate g. 2 July 2002 $5,000.00 R & A.L. Slade h. 23 July 2002 $6,000.00 Suncorp Metway j. 10 May 2002 $5,000.00 Hegoda Pty Ltd (a company associated with the children's clothing business conducted by the defendant and her husband and their two daughters) m. 4 December 2002 $4,000.00 Hegoda Pty Ltd o. 13 December 2002 $300,000.00 Hegoda Pty Ltd Total $365,000.00

[24] The nature of this transaction, and the basis upon which the parties agreed that moneys would be loaned to help the defendant and her husband sell their own home and buy another, is indicative of a pattern I have seen in the other transactions, namely of a series of loans where each new loan agreement was entered into, covering not only the original amount sought, but other sums already owed by the defendant to the plaintiff. The facts concerning this series of loans are not in dispute, and this is relevant when considering whether or not this pattern continued. However, on the evidence of both parties in relation to these transactions, the total of $365,000 was advanced in a series of loans for the purchase of a new home by the defendant and her husband, which sum was repaid in February 2003.

[25] These loans then continued, and the flavour of the transactions between the plaintiff and the defendant can be gleaned from their respective affidavits. The first loan, in May 2002, is described by the defendant in her affidavit at paragraph 20 as follows. She telephoned the plaintiff to say: "Mum, I'm short of money at the moment. I need $12,500 to pay the mortgage, bills, and I need to pay a few other tradesmen to finish things off in a house. I promise to pay it back when we sell the house in November."

[26] She said she needed the money "immediately" and asked for the cheque to be made out to Hegoda Pty Ltd, the name of which she spelled for the plaintiff. (Hegoda Pty Ltd was a corporation the defendant, her husband and daughters used to run the Club 55 business and which the defendant also used as her personal cheque account)). The plaintiff agreed to mail the cheque from Erina to Sydney straight away.

[27] In May 2002 the defendant sought another loan in the series of loans for the purchase of the defendant's city apartment (which loan was repaid). The significance of this is that the loans to buy the apartment were interspersed with the requests for loans to the defendant personally. The next of these, which was the third loan request, was on 2 July 2002.

[28] The conversation on or about 2 July 2002 is described by the defendant in her affidavit (paragraph 24) as being as follows: Me: "Mum, I need $5,000 for bills and the like. Can you lend me $5,000?"

Me: "Thanks, you know I wouldn't ask if I didn't need it. I have about $450 in the bank. I will pay it back when we sell the house".

[29] The fourth loan in the transaction was the $6,000 cheque described in more detail below.

[30] I note that during this time the plaintiff was living in Erina and the defendant says in her affidavit that visits by her to Erina were infrequent. She contacted her mother by telephone. The abrupt nature of these telephone calls asking for money is reflected in the plaintiff's affidavit where she says she had a series of telephone conversations in which the defendant said words to the effect of "Can I borrow [a particular sum of money]" or "I need to borrow some more money" or "I know I still owe you but I need another loan. It won't be for long, I need it for the kids' business". There is a similar refrain to the conversations in the defendant's affidavit. What is clear is that the plaintiff immediately sent a cheque on each occasion without any argument. On each occasion, it is not in dispute that the moneys involved were a loan (although the recipient of some of these loans is in dispute) and that words such as "borrow", "lend" or "loan" were used. The plaintiff wrote the word "loan" on a number of her cheque butts.

[31] At paragraph 17 of her affidavit, the plaintiff says that on occasion she would say: "But I just lent you money a few weeks ago" but either straight away or in the end she would agree. She said "I didn't want to cause any argument with my daughter or run the risk of putting her offside" (paragraph 17).

[32] She goes on to explain in paragraph 19: "From the time I moved in to the Tarragal Glen, Roslyn really only telephoned me to ask for money. These telephone calls were not infrequent. I was not used to being asked to lend so much money so often. After the first few requests, I became concerned that my savings were being depleted and that I may be caught short of money pending repayment of the money I advanced to Roslyn. I felt somewhat intimidated and afraid of answering the phone through fear that it would be Roslyn calling me for more money, and that I would not be able to say "no" to her. I began to be overcome with a sense of panic each time the phone rang. Sometimes I would let the phone ring out but other times I would answer it."

[33] As these requests continued, the plaintiff began to say words like "When will I get it back?" (affidavit, paragraph 20). On these occasions, however, she was re-assured that all money that was owing to her would be repaid (affidavit of the plaintiff, paragraph 21).

[34] Two things emerge from these description of events. The first is that even on the defendant's version of the conversations, the plaintiff was entitled to use the words "intimidated" and "afraid of answering the phone". The second is that the loans were clearly to the defendant personally, whether for the purchase of a home in joint names for herself and her husband, or for the payment of family debts such as renovation costs or "bills and the like". No distinction was made between the ultimate use of the loans other than that the plaintiff filled out the cheque and cheque butt in accordance with the defendant's instructions. This is one of the common factors for these loans which has led to my acceptance of Mr Seton SC's submission that these were a series of interrelated loans, not a series of separate "stand alone" loans as submitted by Ms Anastasi.

[35] The next loan in the series was the second cheque for $6,000 received by the defendant on 25 July, which the defendant says in her affidavit she "cashed" and "put the money aside" and returned it in or about August 2002. The plaintiff denies this, and I have set out the evidence in more detail below.

[36] The next loan, which the defendant calls the fifth loan in her affidavit (paragraph 28), was a request for $5,000 to pay bills which the defendant said she would repay when the house was sold.

[37] On 11 September 2002 the plaintiff drew a cheque for $3,891.60 payable to "Fullerton Croft Pty Ltd". There is no such entity, but there is evidence that a company with a similar name carried on business retailing clothing in Queensland. This loan is discussed in more detail below.

[38] The loan which the defendant calls the "sixth loan" (paragraph 31) was made in December 2002. The defendant told the plaintiff she was "short at the moment".

[39] The seventh loan was the bridging finance of $300,000 which was paid on 16 December 2002. On settlement the conveyancer made out a cheque to the plaintiff for $365,000. The defendant claims (paragraph 35 of her affidavit) that she did not borrow any money from the plaintiff from 13 December 2002 until February 2005, nor did she owe her anything else. The documentary evidence tendered at trial, however, painted a different story.

[40] The plaintiff's evidence is that in 2003 the defendant continued to telephone her to ask for loans. The plaintiff said she was asked to draw cheques in favour of an account held by Trilogie Kids, a business in which the defendant, her husband and their two daughters were quarter shareholders. According to the plaintiff's affidavit, she made these deposits after being asked by Roslyn to deposit money to "Account 032-006 229427", but apart from this instruction, she could not remember any other details.

[41] It is not surprising that the plaintiff knew nothing about the financial setup of Trilogie Kids or of the shareholdings in the company. However, the defendant and her daughters both had the same lack of knowledge, and claimed they left their financial affairs up to others such as the accountant who prepared the annual returns.

[42] These loans continued throughout 2003 and 2004. The plaintiff became anxious about how she was going to live on her pension income, as the proceeds of sale from her apartment had been almost all used up. Then, on 20 January 2005 the plaintiff wrote a letter to Roslyn, Amanda and Michelle Slade c/o 66 Darling Point Road, Darling Point. That letter said: "Dear Amanda, Michelle and Ros,

It is very hard for me to write this letter because I don't want to upset anyone but it must be done.

The money that I lent to you last year was a loan and you promised to pay me back months ago. You haven't paid me back. I need to know when I am getting my $430,000 [crossed out and changed to $380,000] because it is all the money I have.

[43] There is a note that someone has witnessed this document. The defendant said it was her brother, Barry, who had done so.

[44] The defendant in oral submissions the fact that this loan amount has been altered, submitting that this is evidence of how unreliable the plaintiff is as a witness, as are the different sums in the solicitor's letter of demand and the statement of claim. It is certainly the case that the amount the subject of the claim has changed, but this is more a reflection of the plaintiff's lack of business skills, age and level of distress about these proceedings than proof of unreliability.

[45] It is submitted that the plaintiff sought to deny that her signature to this document was witnessed by her son Barry. To my observation, the plaintiff had trouble understanding this question. Although her responses to questions were generally clear and concise, on one or two occasions she became confused if the question involved legal terms (the other example being her responses concerning repayment of the $30,000). Part of the problem may also have been that she is almost completely deaf and, as she told me from the witness box, her hearing aid is only of limited assistance in understanding what strangers say to her.

[46] The response of the defendant to this letter was as follows. According to the defendant's affidavit, she received a telephone call from her daughter, Amanda, to say that she had received a letter from the plaintiff addressed to the three of them, wanting $380,000. The defendant expressed astonishment, saying she did not owe any money, to which Amanda replied "Well Mum, you don't know about this but Michelle and I have been asking Nanny for money to help us out". The defendant replied "Help you out with what?" Amanda replied: "With Trilogie Kids. But, some of the money was gifts". [47] According to the defendant's affidavit she then had a conversation with her mother, the plaintiff, who, according to the defendant, agreed that the defendant did not owe her any money and said to forget about the letter.

[48] The letter is addressed to all three persons: the defendant and her two daughters. Counsel for the defendant submits that the only reason the letter was addressed to the girls as well as to the defendant was because the plaintiff knew they did not have any money, and that the plaintiff was trying "unilaterally" to bind the defendant to loans that she had nothing to do with (written submissions paragraph 24). It is pointed out that when the plaintiff was asked why she addressed the letter to all three persons, she said "I sent it to all of them as I didn't care who paid me back."

[49] Senior Counsel for the plaintiff submitted in reply that the plaintiff had no business knowledge and was writing this letter to all the persons she thought were involved; the person she loaned the money to, and the persons to whom some of that money had been given (and who might still have it), rather than any corporate entity, about which the plaintiff clearly knew nothing. This is what she meant by saying that she sent it to all of them because she did not care who paid her back.

[50] I consider it significant that the plaintiff addressed a request for repayment of the whole sum to the defendant as well as to her daughters. The plaintiff clearly regarded the defendant as liable for the whole sum, whatever the standing of the defendant's daughters (whom I find were joined only because she did not care which of them paid her back).

[51] According to the defendant's affidavit (paragraph 39) despite this conversation, in early February (and certainly before 7 February) the defendant nevertheless rang her mother to borrow more money, and, according to paragraph 39 of the defendant's affidavit, the conversation went as follows: Me: "Mum, I now need $20,000 because I've stuffed up again. This time, it's serious. I haven't paid some of our strata levies and some other bills. Les is furious. He has threatened to leave me if this matter isn't resolved. I don't know what to do. Please help me. We're going to have to sell the unit as the levies are too high. Can you lend me $20,000 until we sell this unit?"

[52] According to the defendant's affidavit, the plaintiff responded "Oh that's a shame. Yes, I will post you a cheque today".

[53] It is easy, even from the defendant's version of the conversation, to see the pressure the plaintiff was under to continue to loan the defendant money. In addition, the language the defendant says she uses ("now need"; "stuffed up again", and "This time it's serious") indicate that this is one of a series of loans. Since the terms of the request were to the effect that if the money was not advanced the defendant's husband would leave her and they would have to sell their home, it is not hard to see that the plaintiff felt obliged to lend more money, despite having told the defendant in her letter that she could not really afford to keep lending money which was not being returned.

[54] On 21 March 2005 the sum of $20,000 was paid by the defendant into the account of Trilogie Kids. As at March 2005, moneys advanced to Trilogie Kids totalled $381,850, a substantial sum of money. However, according to the affidavit of Amanda Slade (now Mrs Amanda Garlick) the plaintiff's anxiety was not about the return of this money but about the financial situation of her daughter, the defendant, and according to paragraphs 29 and 30, she asked Amanda to give $4,000 of the money loaned by the plaintiff to the defendant. Subsequent to this, the letter of 20 January 2005 was received. Any embarrassment or anger that Amanda felt about being asked to hand over the $380,000 (in fact the total was $381,850, according to her affidavit, paragraph 28) was short-lived, because prior to 21 March 2005 she asked the plaintiff, according to paragraph 35 of her affidavit, for money to cover import duties, disbursements and BAS. According to her affidavit, the plaintiff said: "I don't really have anything to give" to which Amanda replied that she knew that loans had been forgiven in the past, but she was asking for the money in terms which were clearly consistent with that being a further gift, to which the defendant replied that she could give some money "short term, if you promise to pay it back". According to Amanda's affidavit, she said she would need it for two to three weeks, and she promised to pay it back.

[55] On 4 April 2005 the plaintiff was repaid the sum of $30,000, according to paragraph 36 of Amanda's affidavit. This represented the $20,000 which was borrowed on 21 March 2005 and another $10,000 which was claimed to be a gift.

[56] The following month, May 2005, the defendant was on the phone to her mother, saying (according to paragraph 41 of her affidavit) : "Mum, I now need a further $6,000 as I have more bills to pay. Can you help me please? Can you lend me $6,000 urgently till we sell this unit?"

The plaintiff agreed and sent a cheque on 16 May 2005.

[57] On 10 July 2005 the defendant had another conversation with the plaintiff, saying: "Everything is getting too much for me to handle. Mum, can you lend me $8,000 urgently till we sell this unit?" The plaintiff agreed and the plaintiff's cheque was deposited into the Hegoda Pty Ltd account on 18 July 2005.

[58] The degree of honesty about the sale of the unit can be gleaned from the fact that on 12 March 2006, more than a year after the February 2005 conversation about having to sell the unit and needing an urgent loan, a fresh request was made which, according to paragraph 45 of the defendant's affidavit, amounted to her saying to the plaintiff: "Mum, can you lend me $12,000 urgently till we sell this unit?"

[59] As it happened, the defendant's financial situation had reached such dire straits that the Liquidator of Hegoda, Rodgers Reidy, seized this sum and on 22 March 2006 the defendant was on the telephone to her mother again, to say she needed another $12,000 and was "so stressed out" and "so upset". The plaintiff sent a cheque for $12,000 which was made payable to a Westpac Bank account in the defendant's own name. Prior to that, according to her evidence, she had used the Hegoda cheque account as her own account.

[60] Despite the similarity of these two loans, the defendant claimed, both in her affidavit (paragraph 48, read as a submission only) and in her evidence that each of these loans was individual and separate from each other, even though they were for the same purpose and, in the case of the 2 March 2006 loans, for the same amount, as well as for the identical purpose.

[61] By June 2006, in addition to the $381,000 paid into accounts for Trilogie Kids, and the subsequent loan of $20,000 to Trilogie Kids, the plaintiff had also paid the defendant a total of $58,000.

[62] The plaintiff is a woman of limited financial means. She has an English pension, and is the recipient of a small income from a trust fund set up by her late husband, but that is all she has, apart from the proceeds of the sale of her apartment (she sold her apartment in the retirement village to enter the Montefiore Nursing Home). She had another child, a son, who was paying her costs ($91,000 per annum) at Montefiore until he became unable to do so. Yet it is asserted she had happily given away (not loaned) nearly all her cash reserves, according to the evidence of the defendant and her daughters. For example, according to the defendant, one such conversation which took place in or about June 2006 consisted of the plaintiff saying, in response to yet another claim by the defendant that she was going to sell her home unit and pay her mother back, that the plaintiff said "Forget it. I don't need the money. It's your inheritance. Just stay here and enjoy your lives, you deserve it".

[63] The plaintiff was firm in her statements that her daughters never requested money directly from her (except for the $15,000 at the Milsons Point Westpac Branch, which is no longer claimed). She said that her granddaughters were not involved, had not telephoned her, and had "brought themselves into it" by saying otherwise. The plaintiff in written submissions points out that it was open to the plaintiff to join the defendants and did not. However, the defendant in written submissions points out that they indicated they would do so. In my view, whether or not Michelle and Amanda are parties is a reflection of the legal advice given to the parties rather than being factually persuasive either way.

[64] Evidence of who telephoned whom could have been established from the telephone records, which were obtained under subpoena. However, the defendant said in her evidence that she had swapped mobile telephone numbers with her daughters and it was unclear precisely who had been using the mobile phones (which were in the defendant's name) over much of this period. For periods of time during which this telephone-swapping occurred, it was the evidence of the defendant that she knew nothing about her daughters' business affairs despite being, for a period, a quarter shareholder and working without pay to send out orders; how she could have swapped mobile phones with someone running a business who presumably used it for that purpose was not explained.

[65] Michelle denied that her sister told her anything about the business or the finances, and denied knowing anything about loans to the business from the plaintiff. Thus, any calls to the plaintiff would have had to have been from Amanda, without consulting either Michelle or her mother although she was in partnership with Michelle and the defendant was also working in the business and a shareholder. That is an implausible scenario.

[66] Another complication was that there were changes in the corporate structure for Trilogy Corporation. In or about April 2006 Michelle and Amanda had wound up Trilogie Corporation and in the same month, on 13 April 2006, they incorporated a new company called "Trilogie Group Pty Ltd". All of the debt was left in Trilogie Corporation Pty Ltd. I enquired of both counsel if this was a Phoenix scheme and this appears to be the case, but that is irrelevant for the purposes of this judgment. Two matters are of significance. The first is that all of the debt would be left with Trilogie Corporation and Trilogie Group took over the same business customers and line of business, and this led to Amanda saying she had a conversation with the plaintiff to the effect that she would have no claim for her loans. The second is that the defendant and her husband (who were involved in the liquidation of their own company at the time) were no longer shareholders, although they appear to have continued to work without pay to help send out orders.

[67] In April 2006, according to paragraph 43 of Amanda's affidavit, as a result of winding up Trilogie Corporation Pty Ltd she had a conversation with her accountant, who gave her some advice. Accordingly, she had the following conversation with the plaintiff: "Nanny, listen, I have spoken to our accountant and we need to end the company. So, we are going to have to close the company down and any outstanding moneys that the business still owes you which have not already been written off, are going to be written off. Do you understand what I am saying? That means that the money that the business still owes you will be written off."

[68] According to Amanda's affidavit, the plaintiff replied: "Do whatever you need to, I don't want the money back that I've recently loaned to your business. Just don't worry about it, and do whatever you need to do to move on and ensure that everything is okay".

[69] Whether the moneys owed to the plaintiff were in fact written off as claimed, as being loans to the company (as opposed to personal loans or gifts to her granddaughters) is not the issue here; no such claim was made by the defendant. The question is who the money was loaned to, not what was done with the money subsequently. It is, however, not to the credit of Amanda Slade that she would participate in such a scheme, and it is a matter affecting her credibility as a witness.

[70] In fact, the money was somewhere else, or so the defendant stated in Slade Family Trust returns. According to the financial statements of the Slade Family Trust accounts (Exhibit J) show debts to the plaintiff in the sum of $90,000 as at 30 June 2002 and $414,000 as at June 2003. These financial statements contradict the evidence of the defendant (paragraph 35 of her affidavit) that she did not owe the plaintiff any money between February 2003 and February 2005. The likely explanation is that the sums loaned by the plaintiff appeared as debts in more than one of the corporations in which the defendant and her daughters were shareholders. It was not possible to get to the bottom of the financial structure of these corporations, all of which appear to be in liquidation, as the defendant and her daughters simply denied any knowledge of financial affairs.

[71] Parties who represent their financial affairs in a particular way to the Deputy Commissioner of Taxation should not expect the court to accept statements to the contrary, particularly where these are unsupported by the relevant documentary proof: Giorginis v Kastrati (1989) Aust Torts Reports 80-233.

[72] As well as the two companies called "Trilogie" there was a third Trilogie entity, the Trilogie Unit Trust, which as at 30 June 2003 had a loan of $29,582 to the Slade Family Trust, according to the financial statement of the Slade Family Trust, which is Exhibit J. I heard nothing about this entity during the trial.

[73] In November 2006 the defendant asked the plaintiff for a further loan of $5,000, saying she would pay her back within a few weeks. She claims that she returned this money in cash to the plaintiff at her new home in the retirement village at the Moses Montefiore Home, where the plaintiff moved in December 2006.

[74] Although the explanation for a number of these loans had been the proposed urgent sale of the defendant's apartment in Pitt Street, this did not occur until 18 January 2008.

[75] In August 2007, Michelle was married, and in October 2007 Trilogie Corp Pty Ltd was formally deregistered. No more requests to borrow money were made in 2007 and 2008.

[76] On 3 July 2009 a firm of solicitors sent a letter of demand to Mrs Roslyn Slade for loans "totalling more than $500,000, including but not limited to the following amounts", followed by a list containing many of the items in the list which is set out in the schedule above.

[77] There is thus a clear factual conflict between the evidence of the plaintiff and the defendant. Part of this can be resolved by a comparison of contemporaneous documentation with the claims of the witnesses.

The documentary evidence corroborative of the plaintiff's claim

[78] All of the contemporaneous documentation is corroborative of the plaintiff. While there are gaps because of inadequate records, all those documents which are available consistently support the plaintiff's version. Some of the most important of these are as follows: (a) Exhibit J is the financial statement for the Slade Family Trust for the year ending 30 June 2003. Hegoda Pty Ltd, the company into which a number of these sums was paid, was the trustee. This discloses a sum of $414,000 as being owed to the plaintiff as at 30 June 2003. This is quite close, factually, to the amount that was loaned.

(b) A strongly disputed issue of fact were the circumstances in which a cheque was drawn payable to "Fullerton Croft Pty Ltd". There is no such company. However, Exhibits in K, when put together, identify that there was a Queensland Commission Agent, who sold clothing to retailers under the business name of Weatherhog Agencies in Queensland. The defendant's Club 55 business operated in a number of States and Territories in Australia, although the defendant was not able to remember the name of this agent. However, the coincidence of a company called Fultoncroft Pty Ltd, which sold clothing to retailers under the business name of Weatherhog Agencies, is, I find, on the balance of probabilities, more likely than not to be a company involved in selling retail clothing, whether in relation to Club 55 (this being a business which had left the defendant with a number of unsold clothing items to dispose of) or Trilogie Kids, and accordingly, the most likely explanation for the plaintiff drawing a cheque payable for this very precise sum of $3,891.60 on 11 September 2002 is that it was for payment for a bill for retailer's clothing for which the defendant was liable.

(c) Exhibit L shows that "Dobrinski - Repayments" were made by Trilogie Kids to Hegoda Pty Ltd, which is consistent with the submission made by the plaintiff that the defendant obtained the loans and directed payments be made to Trilogie Kids.

Lack of documentary evidence corroborating the defendant's version of events

[79] Although the defendant and her daughters were involved in a series of corporate structures, for which an accountant was employed, financial statements, management accounts or other corporation documents have not been produced on subpoena in evidence to support the evidence of the defendant or her daughters. Mr Seton SC asked me to draw an inference (Allen v Tobias (1958) 98 CLR 367 at 375) in relation to the absence of these documents.

[80] The extent of this doctrine goes beyond documents which have been destroyed to documents which have not been disclosed. In Rosebanner Pty Ltd v Energy Australia [2009] NSWSC 43 at [454] - 458 Ward J explained: " [454] Where particular evidence (or types of evidence) can be identified as having been deliberately or recklessly lost, or destroyed, or not disclosed, this gives rise to a presumption at least that the contents of that evidence would have been entirely against the defaulting party in accordance with the maxim omnia praesumuntur contra spoliatorem (which has been translated as "all things are presumed against the wrongdoer" per Mozley and Whitley's Law Dictionary as cited in NWR FM t/as North West Radio v Broadcasting Commission of Ireland [2004] IEHC 109). (It is difficult to find a use of spoliator as "wrongdoer" in any except the most recent authorities, many of which cite Mozley . A more precise translation of the Latin word might be "robber, pillager, plunderer or spoiler" which accords with the maxim's usage in the older authorities.)

[455] The High Court in Allen v Tobias (1958) 98 CLR 367 at 375, adopted the statement of this maxim given in The Ophelia [1916] 2 AC 206:

If any one by a deliberate act destroys a document which, according to what its contents may have been, would have told strongly either for him or against him, the strongest possible presumption arises that if it had been produced it would have told against him; and even if the document is destroyed by his own act, but under circumstances in which the intention to destroy evidence may fairly be considered rebutted, still he has to suffer. He is in the position that he is without the corroboration which might have been expected in his case.

[456] There is some divergent judicial opinion on the nature of the inference to be drawn, whether it is limited to matters which could likely have been established by the evidence which has been destroyed or withheld or whether presumptions will be raised against the spoliator on all issues which are not otherwise positively proved. Of course, even if the more limited application of the maxim is accepted, adverse inferences as to credit may be drawn from deliberate spoliation of evidence.

[457] There is also some historic divergence as to the amount (if any) of "wrongdoing" or fault required to enliven the maxim; ie whether the blameworthiness requires malus animus or mala fides, ( Delany v Tenison (1758) 3 Bro PC 659 ; 1 ER 1559) or whether it is sufficient for the presumption to be available that it cannot be shown that the destruction of evidence was proper or justifiable ( Gray v Haig (1854-1855) 20 Beav 219 ; 52 ER 587).

[458] The passage of The Ophelia approved by the High Court would seem to suggest that even bona fide destruction can nevertheless have negative consequences, by stating that even where "the intention to destroy evidence may fairly be considered rebutted, still [the destroyer of evidence] has to suffer. He is in the position that he is without the corroboration which might have been expected in his case."

[81] The explanations that the defendant and her daughters gave were that documents were with the liquidators, or with the accountant, but it was not explained why these documents, which would still have been available when this litigation commenced in 2009, could not be produced to the court. Where documents were produced, their contents were inconsistent with the evidence of the defendant and her daughters. In particular, in circumstances where the defendant and her daughters had been actively involved in a clothing company called Club 55 and she and her husband were each one-quarter shareholders in the first Trilogie corporate arrangement, as well as both working from the premises, I find it implausible that she had no idea that she was a shareholder and knew nothing about the company structure, activities, or the agents they employed interstate, which is particularly hard to comprehend, given that the defendant's (unpaid) job was to arrange for the shipping of goods which had been purchased.

Oral evidence contradictory of the affidavit evidence

[82] The defendant and her two daughters gave evidence which was at times in contradiction to what was set out in her affidavit. (a) One example concerns the loan of 22 November 2006, which is Exhibit MM. Her affidavit describes this as a loan. Her oral evidence, however, was that the plaintiff was unable to get to the bank and sent her a cheque so that she could obtain $5,000 in cash. When this inconsistency was put to her in cross-examination, and she was asked which of these versions was correct, she preferred her oral version of events, but this version is implausible. It amounts to the plaintiff saying she needed cash and sending the defendant a $5,000 cash cheque, which the defendant then banked, as opposed to having it cashed. It is claimed that she took $5,000 out of the bank in cash and then gave it to her mother, but there is no entry to this effect in the banking records. As there was no transcript, it was not possible to check what was put on behalf of the defendant in submissions, namely that she obtained the $5,000 cash from her takings from clothing sales at markets, but this evidence, again, would be implausible, because it would require the defendant to have $5,000 in cash immediately available to give to the plaintiff. The more likely explanation is that the $5,000 cheque was banked, and the money was not reimbursed.

(b) A second example is item i, a $6,000 cash cheque sent by the plaintiff to the defendant, allegedly in error, in that the plaintiff drew two cheques on the same day, both of which were for $6,000. However, one cheque was payable to Suncorp Metway and the other to cash. The similarity lies in the fact that they were each for the same amount. Both cheques were sent to the defendant, and both were presented on the same day, 23 July 2002.

The defendant says that the plaintiff sent the $6,000 cash cheque in error. The likely explanation is, however, that the defendant asked for both cheques, with different payees. This is because when the first of these $6,000 cheques was deposited into the account of Hegoda Pty Ltd (which it must be recalled was operated by the defendant for herself as well as for her company) the account balance was $944.86, and by the time the second cheque was deposited, the account balance had gone down to $448.40, and then the subject cheque was deposited, by reason of other cheques being drawn, the balance was $1,504.97.

While the defendant admitted to requesting that a cheque be made payable to Suncorp, her affidavit does not explain, nor did her oral evidence, what conversation she had with the plaintiff about whether this second cheque was a gift, or a request to cash moneys. If the defendant had torn up the second cheque, or returned it to the plaintiff, that might have been plausible. However, if the defendant, believing the cheque to be a mistake, and not knowing when she was next likely to visit her mother, who was living in the country and who she did not often visit, cashed it with the understanding that at some time in the future she would send her mother the cash for which she was presumably in need, is, as the plaintiff's helpful submissions say, at paragraph 21, "too far fetched".

The plaintiff denies receiving $6,000 in cash and the defendant cannot point to any proof of repayment beyond her own word.

(c) The analysis of these two explanations by the defendant is instructive. It shows a pattern of inconsistencies, not only with contemporaneous documents but with her own affidavit.

[83] A significant part of the defendant's evidence was spent distancing herself from any involvement in her daughters' business. I summarise this as follows: (a) Although she denied knowing anything about the financial arrangements for her daughters' business, she admitted being involved in discussions with her daughters about the $55,000 loan from the plaintiff for the first shipment of children's wear from China in "mid-2003". Amanda denied that her mother was involved at all. It must be recalled that the defendant and her daughters had previously been involved in a clothing business which had also shipped clothing from china. At the very least, the defendant was someone with prior business experience in this field, and it is implausible for there to have been no discussion, not least because the defendant and her husband were making their warehouse facilities available as well as helping with the packing and sending out of the shipments.

(b) The defendant and her husband were shareholders and directors of companies through which they conducted their business and family affairs, as well as their personal affairs, since 1977. She had been involved in a substantial clothing business, which had involved shipping clothes from China. Her claims of not understanding accounting, financial and company-related matters were disingenuous. The explanation offered for not knowing what was in the company accounting records was that she "did not prepare any accounting records and was not able to say what the Dobrinski loan amounts were all about" (defendant's written submissions, page 9). This is an implausible excuse coming from a woman who had been a company director and in business for several decades.

(c) Nor do I accept the explanation that the defendant's "psychiatric" problems or physical health prevent her from having this knowledge (written submissions pages 9 - 10), or that these make her a "vulnerable" person as claimed. There was no medical evidence tendered as to the defendant's condition being such that she was unable to understand business records or remember past events accurately.

(d) The defendant and her husband were shareholders in Trilogie Corporation Ltd, which was incorporated on 26 May 2003 (Exhibit G). The defendant claimed not to know this. Since she was helping her daughter with the business by attending to the warehousing, this is implausible.

(e) The defendant continued to sell clothing stock at the markets. She said that this was old Hegoda stock and other stock she had purchased from Max's Bazaar in cash. This, together with her activities helping her daughter, demonstrates a continued involvement in the clothing industry, which would require a degree of knowledge, not only of business but of children's clothing and clothing generally. The payment to Fultoncroft Pty Ltd of September 2002, which I have found is more likely than not to have been paid on behalf of Hegoda Pty Ltd, is evidence that Hegoda Pty Ltd was still trading in clothes, despite her evidence that Hegoda Pty Ltd ceased trading in 2001.

(f) As I have already indicated, the financial statements of the Slade Family Trust show loans to the plaintiff of $90,000 as at 30 June 2002 and $414,000 as at June 2003. This is contradictory to the defendant's evidence in her affidavit that she owed nothing to the plaintiff.

[84] The one issue about which the evidence of the defendant is more likely to be correct than the evidence of the plaintiff, was her denial that she received a $30,000 repayment. This was put to the plaintiff in the context of a conversation with Amanda Garlick, in which it was said that the $10,000 represented a gift, which the plaintiff denied. She then said that she denied receipt of the $30,000. I note the submissions of counsel for the plaintiff, at paragraph 9, and I note that this point is relied upon with some force in the submissions of the defendant.

[85] I consider the explanation for the plaintiff's evidence on this topic is that she became confused, and in her desire to insist upon the $10,000 not being a gift to her, she became confused and said she did not receive this sum, meaning a sum of which $10,000 was a gift. It is not uncommon for witnesses to answer questions erroneously if they are tired or confused; and in the present case, I should take into account that the plaintiff was 86 years of age and clearly unused to Courtrooms. It was also obvious to me from her demeanour in the witness box that she was very distressed by these proceedings. I proposed to regard her evidence on this issue not as being evidence of dishonesty, but evidence that was erroneously given by an 86 year old woman in a fragile state of health.

[86] Michelle Joffee, one of the defendant's daughters, and her husband, both gave evidence.

[87] According to her affidavit, Michelle Joffee knew absolutely nothing about any of the financial transactions relating to the funding of the Trilogie Kids business. Not only did she know nothing of how the business was set up or funded, but she knew nothing of any loans from the plaintiff. She says she left the financial and administrative side of the business to her sister, Amanda, and she did not know "anything" about any moneys that were advance by the plaintiff (paragraph 8).

[88] At paragraph 9 she sets out her astonishment when her husband told her that the plaintiff had telephoned to say she had seen a barrister about the money that was owed.

[89] It must be recalled that on 20 January 2005 the plaintiff had sent a letter, not only addressed to the defendant but also to both of her daughters.

[90] Analysis of the summary of transactions shows several of the cheques as being payable to "A Slade", including transaction e, l, n and q. The only payment made direct to Michelle is the $4,000 cheque dated 20 May 2002. More than $300,000 had been paid into the company account and company annual returns and profit and loss statements (not produced to the court) must have showed some reference to the plaintiff for the accountant to tell Michelle's sister Amanda to advise the plaintiff of the company restructuring.

[91] Despite this, according to paragraph 9, Michelle's reply to her husband, as set out in her affidavit, is "What is she talking about, we don't owe her any money?" To which her husband made the revealing reply: "I know, I heard her say that you and Amanda don't owe her anything many times". [92] His statement is consistent with Michelle knowing that money was being advanced, at least. However, Michelle denied all knowledge, including the 2002 $4,000 payment against her credit card account. She claimed to have no recollection of this, and then said it must have been a gift.

[93] Michelle and her husband both gave evidence of having a meeting with the plaintiff, as well as with Amanda and her husband. The four of them had, on one occasion, put together $100 each, and on another occasion, put together a total of $300 each, "as a helping hand to her". (affidavit, paragraph 10). No explanation was given as to the whereabouts of the very substantial sums that had been advanced by the plaintiff and had presumably vanished, on both girls' account, into what was clearly a very unsuccessful clothing business.

[94] Mr Joffee gave evidence of his telephone conversation with the plaintiff and of giving the plaintiff, first $400 and then $300 more. This evidence does not take matters any further.

[95] Given Michelle's total denial of any knowledge of the financing of the business, and evidence from her or from her husband is of no weight in determining the nature of the transaction.

[96] Amanda Garlick, whose role in the business was financial administration, asserts that she was the person who borrowed the money. Her evidence, however, was as inconsistent and confused as the defendant's.

[97] Amanda was responsible for the business activities of Trilogie Kids and said she had prior business experience. The first inconsistency in her evidence is that while she claimed neither to need nor want her parents' business advice because of her prior experience running Club 55 with them, she also claimed not to know that they were equal shareholders in the first Trilogie Kids company.

[98] The Club 55 and Trilogie Kids businesses had a lot in common. Both involved importing clothes from China and selling them interstate as well as in New South Wales. Amanda was, however, unable to name the Queensland agent used either by Club 55 or Trilogie. Although she could not remember the name, she was sure that it was not "Fultoncroft". In addition, whether they were Club 55 clients or not, Amanda and Michelle's business had large corporations such as Target interested in buying their children's clothing. It seems unlikely such corporations would offer contracts to persons they had not had business dealings of some kind with, and the likelihood is that the Trilogie Kids business was built upon some goodwill and contacts left over from Club 55. This included using the defendant's premises to store goods, where Club 55 goods were still being stored. There were still considerable quantities of Club 55 goods at the time that Hegoda went into liquidation in 2006, because Amanda and Michelle bought these items (several thousand in number) from the Hegoda liquidator for about $5,000. I accept the plaintiff's submission (written submissions, paragraph 36) that the two companies must have been more interwoven than the Court has been told.

[99] Amanda's affidavit is silent as to how she proposed to set up and run Trilogie Kids without any source of business finance. She was unable to explain how it was that she set up a business without finance and then approached her grandmother to borrow (or be given) money. Although not the subject of evidence in her affidavit, she stated in her oral evidence that before the business was set up, she had approached the plaintiff to discuss whether she would be prepared to finance the business. She volunteered this answer when asked if she had sought advice or assistance from her father before setting up the business. No such conversation was put to the plaintiff in her cross-examination.

[100] The role of Mr Slade in these businesses was the subject of inconsistent evidence, not only in relation to whether he gave advice and assistance when the business was set up, but his role generally. Amanda, like her sister and mother, was unable to recall what jobs, if any, her father had between 2001 - 2006. She was sure, however, that he had not offered her any financial advice (beyond the suggestion that she ask her grandmother for money) or played any role in the business, even though he had worked without pay helping the defendant to send out consignments of purchased goods (according to the defendant; Amanda's evidence on this consisted largely of denials).

[101] Part of one of the loans, the sum of $4,000, was paid by Amanda to the defendant. As is set out above, this was allegedly paid because the plaintiff asked Amanda to help her mother out by giving her this sum. However, the defendant was in need of money on a regular basis, as these loans show, so this explanation for one small loan is implausible. In addition, Exhibit L shows numerous payments were made to Hegoda Pty Ltd (which was the defendant's bank account as well as the company's bank account) from these funds. No explanation is put forward as being some special "need" requirement each time. The plaintiff submits that these were repayments of the loans arranged by the defendant with the plaintiff. Whatever the explanation, the moneys were going into a company in which the defendant had a shareholding, and some of these funds were then transferred to the defendant's own account. If the plaintiff was being told that the purpose of the loan was to help the Trilogie Kids business, then this was not what was happening with the money; Exhibit J confirms it was ending up as a debt in the family trust. However, that is not relevant to the issues in this case. It is simply evidence that does not reflect favourably upon the defendant and her witness, as is the attempt by Amanda and Michelle to "write off" moneys that the plaintiff loaned by "closing down" Trilogie Corp Pty Ltd and recommencing the same business as Trilogie Group Pty Ltd.

[102] Amanda did make a payment of $30,000 to the plaintiff. She said it was payment of a $20,000 loan and a gift of $10,000. However, the $20,000 loan repayment would have been for business purposes, and should have been recorded as such. There are no business records available to determine if the extra $10,000 (which presumably came from company funds) was recorded as a loan repayment, interest or as a gift. There was only one cheque drawn for the whole sum.

[103] Amanda, Michelle and the defendant gave inconsistent evidence about when they were (or were not) talking to their mother. Counsel for the defendant submits that the plaintiff acknowledged she knew there was no contact between the plaintiff and her daughters between February and November 2002 (written submissions, paragraph 14). The plaintiff did say she knew there was no contact for a time, but that the girls and their mother had all gone with her in about April 2002 to see the retirement village unit at Terrigal that the plaintiff planned to buy, and this was conceded by these witnesses. This explanation of being on "not speaking" terms appears to be an explanation for not being able to answer questions about knowledge of the loan. The plaintiff, who was living in Erina and rarely saw the defendant during 2002 (or her daughters) would be unlikely to know the nature and extent of any arguments between them.

[104] This is, however, all irrelevant history. From early 2003, when Trilogie Kids was set up, the defendant was a quarter shareholder in their business when it was set up, worked without payment to help with consignments and allowed the business to store its goods along with Club 55 goods.

[105] The inconsistencies in the evidence of the plaintiff and her daughters, the lack of documentary corroboration and their claims of inability to remember information about their business affairs have led me to regard them as witnesses whose evidence should not be accepted without independent and reliable corroboration. I now consider issues relevant to credit in accordance with the principles I set out in paragraphs [13] - [15] above

[106] All of the contemporaneous business records support the plaintiff's contentions, and the circumstances in which other business records have not been provided in answer to subpoenae is unfortunate, although I would not go as far as to draw an Allen v Tobias inference.

[107] The repeated claims by the defendant and her daughter of being unable to remember financial arrangements, the names of suppliers or other details about their business affairs is such as to fall within the parameters of the warning of Gleeson CJ in R v Logue, supra. Nor do I accept, in the absence of psychiatric evidence, the defendant's claim of psychological and/or physical problems preventing her from remembering events or giving evidence in a coherent fashion. By contrast the plaintiff, whose age and health was a significant factor, did not complain of these matters, beyond apologizing for her deafness.

[108] Although it is a very small matter, the demeanour of the defendant in the witness box, and the matters she raised in the opening paragraphs of her affidavit, are indicative of a hostility towards the plaintiff that makes her evidence unreliable.

[109] The first issue for determination is whether claims prior to 31 August 2003 or 24 February 2004 are caught by s 14 Limitation Act 1969.

[110] The transactions in question are a series of 36 transactions between May 2002 and December 2006, where the plaintiff lived in Erina and the defendant lived in Sydney.

[111] The plaintiff's claim is that in respect of each sum advanced by the plaintiff, there was a request to borrow money, often for a specific purpose, and the plaintiff agreed to advance that money after the defendant agreed either to repay the amount in question or to repay that amount plus other sums borrowed at a future date, such as after the sale of a property.

[112] The plaintiff submits that each time the defendant promised to repay the amount, the amount being sought, plus all other sums, became due and payable. This is clearly the case with the moneys that were advanced for the purchase of the defendant's new home, where the sum of $365,000 was borrowed in a series of loans which were in fact repaid.

[113] The first issue is whether or not I accept that it was the defendant who made these requests. I am satisfied that the defendant did so, and that what she did in each case, as is clear from the transactions for loans where she was about to sell a property, was that she would give a specific reason for wanting to borrow the money. Some of these moneys were paid direct to her, while others were paid to other persons at her direction. However, the sole connecting factor in all of these loans was the defendant. That is confirmed by the contemporaneous financial records showing the listing of the moneys borrowed from the plaintiff as being debts for the Slade Unit Trust (Exhibit J).

[114] Where a person has made representations to the Deputy Commissioner of Taxation and seeks to go behind them in other proceedings, Courts will exercise great caution as to whether or not to accept this evidence, for the reasons explained by the Full Court of the Supreme Court of South Australia, in Giorginis v Kastrati(1989) Aust Torts Rep 80-233.

[115] Accordingly, as I am satisfied that it was the defendant who asked for each of these loans, and that these loans were essentially supported by consideration that in return for lending further moneys, existing loans would be repaid, each new promise gives the plaintiff the benefit of several different contractual promises to pay the same debt, in the manner described by Bryson AJ in Bank of China Limited v CGS (Group) Pty Ltd [2009] NSWSC 397 at [34]: "[34] Counsel for the defendants contended (t 76) that the Bank could not make good an argument that a single debt which came into being by a contract of debt, a complete contract with consideration and expressions of promises and all aspects of a functioning contract, was or could be the subject of other documents which would give rise to an independent cause of action. Defendant's counsel submitted that it was not possible for a later contractual promise to pay a debt for which there was an earlier contractual promise to pay to have effect; counsel argued to the effect that if the debt and a promise to pay it already existed, a further promise to pay it could not have effect. Counsel suggested that there could only be a fresh or further cause of action if the parties agreed to rescind whatever earlier agreement for payment existed, and to start afresh. The parties did not make any such rescission agreement. However in my opinion it is not relevant whether there were or were not rescission agreements of the kind to which counsel referred. There is no conceptual difficulty about the existence of multiple enforceable contractual promises to pay the same debt. Counsel developed this at some length, but I think it is sufficient to dispose of it to say that in my opinion there is no reason why there cannot be more than one contractually enforceable promise to pay the same obligation. If a plaintiff has the benefit of several different contractual promises to pay the same debt, failure to pay is breach of each of them, and gives rise to separate causes of action for each breach. There is no reason in principle why the first breach and the first accrual date should be the only ones. It is of course necessary that each contractual promise should be a term of a contract supported by consideration, or of a deed. A simple contract promise to pay an existing debt would not be supported by consideration, but the promises put forward by the Bank are not bare promises and in each case the contract shows a sufficient consideration."

[116] It is only necessary for me to find that the defendant made this promise on one such occasion, in order to overcome the limitation period. However, it is apparent from the defendant's own evidence that this promise was made not only on one occasion, but on almost every occasion.

[117] The defendant claims that the plaintiff "forgave" the balance of outstanding loans and they are therefore extinguished.

[118] There is no defence of forgiveness of this kind known to the law and the debts have not been extinguished. Representations of this kind were explained by Gummow, Hayne and Kiefel JJ in Agricultural and Rural Finance Pty Ltd v Gardner [2008] HCA 57 at [95]-[96], as follows: "[95] … But if, as is the case here, there was no election between inconsistent rights, there was no variation of the contract, and there was no detrimental reliance upon the representation, no reason is given for holding the party concerned to its earlier expressed attitude beyond the fact that the representation was made. To hold that the making of the representation, without more, suffices to alter the rights and obligations for which the parties stipulated by their contract is a step that should not be taken.

[96] It should not be taken for two reasons. First, to hold that the making of a representation, without more, alters the rights and obligations of parties to a contract would be to supplant accepted principles governing whether an estoppel is established and whether a contract has been varied. It would supplant those principles by dispensing with the need to show detrimental reliance to establish an estoppel and by discarding as irrelevant the need to show consideration for an agreement to vary an existing contract. The second reason, which in a sense is no more than the obverse of the first, is that no reason is proffered to hold the person making the representation to it. The person to whom the representation is made has not relied on it; it is not demonstrated that departure from the representation would be unjust; there was no consideration to support a bargain."

[119] These principles were referred to in Shepparton Projects Pty Ltd v Cave Investments Pty Ltd [2010] VSC 504 at [46] - [49]. The complexities of this area of contract law were noted by McDougall J in Cordon Investments Pty Ltd v Lesdor Properties Pty Ltd [2010] NSWSC 1073 where his Honour made the following comments before noting the discussion of these issues by the High Court in : "[166] … It is very difficult to reconcile [the cases], which may reflect that most of them turn on their particular facts, or that the concept of "entire contract" had different meanings to different judges, or was used by different judges in different ways. The confusion in the case law is well analysed in Beck, "The Doctrine of Substantial Performance: Conditions and Conditions Precedent" (1975) 38 MLR 413.

[167] An alternative, and perhaps related, explanation of the basis upon which the tender of less than complete performance of an entire contractual obligation may, nonetheless, earn the contractual reward is waiver. See, for example, Pollock CB in Graves v Legg (1854) 9 Exch 709 ; 156 ER 304. Indeed, this was the alternative ground on which Denning LJ based his conclusion in Hoenig ."

[120] Once again, I note that there is no pleading of and no reliance upon any doctrine of election, variation, detrimental reliance or presumption of advancement.

[121] Even if the representation relied upon by the defendant had been made, it would not affect the plaintiff's right to repayment.

[122] Accordingly, I give judgment for the plaintiff in the sum of $514,941.60 and grant liberty to apply for the calculation of pre-judgment interest.

Orders (1) Judgment for the plaintiff for $514,941.60. (2) Defendant pay plaintiff's costs. (3) Note that the pre-judgment interest is agreed between the parties at $342,838.87. (4) Exhibits retained for 28 days.

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