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[2026] NSWSC 981
Supreme Court of NSW
2026-08-18
Richardson J
Original judgment source is linked above.
Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: Eliopoulos v Sher [2026] NSWSC 981
Hearing dates: 25 June 2026
Date of orders: 18 August 2026
Decision date: 18 August 2026
Jurisdiction: Common Law
Before: Richardson J
Decision: (1) Judgment for the plaintiff against the defendant in the sum of $1,022,148.92 inclusive of pre-judgment interest from 20 January 2023 to 18 August 2026 pursuant to s 100 of the Civil Procedure Act 2005 (NSW) in the amount of $227,148.92.
(2) The defendant is to pay the plaintiff’s costs of the proceedings as agreed or assessed. In the event that either party wishes to be heard further on the question of costs, grant leave to apply within 7 days in that respect.
Catchwords: CONTRACT — informal agreements — loan agreement — where agreed that there existed a contract that was partly-oral and partly referred to in text messages — dispute as to parties to the contract — whether borrower was corporation or director personally — where loan monies applied to purchase of property by corporation — no evidence that any corporate borrower mentioned during loan negotiations — use of post-contractual conduct to determine parties to the contract
Legislation Cited: Civil Procedure Act 2005 (NSW), s 100
Cases Cited: Air Tahiti Nui Pty Ltd v McKenzie (2009) 77 NSWLR 299; [2009] NSWCA 429
BH Australia Constructions Pty Ltd v Kapeller (2019) 100 NSWLR 367; [2019] NSWSC 1086
Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153; [2001] NSWCA 61
Cooper v Hobbs [2013] NSWCA 70
Damien v JKAM Investments Pty Ltd [2015] NSWCA 368
Davies v Apted [2013] SASCFC 92
Eliopoulos v Sher [2025] NSWSC 115
Filadelfia Projects Pty Ltd v Entirity Business Services Pty Ltd (No 2) [2011] NSWSC 116
Mills v Walsh [2022] NSWCA 255
Pethybridge v Stedikas Holdings Pty Ltd [2007] NSWCA 154; (2007) Aust Contract R 90-263
Category: Principal judgment
Parties: Chris Eliopoulos (Plaintiff)
Halina Gilla Sher (Defendant) (self-represented)
Representation: Counsel:
B Phillips (Plaintiff)
Solicitors:
GA Lawyers (Plaintiff)
File Number(s): 2023/108923
Publication restriction: Nil
HER HONOUR: By statement of claim dated 4 April 2023, the plaintiff (Mr Chris Eliopoulos) sues the defendant (Ms Gilla Sher) seeking repayment of two loans.
It is common ground that Mr Eliopoulos loaned the following monies:
the first loan – in tranches of $400,000 and then $250,000 (paid during the period 7 to 25 October 2021); and
the second loan – $150,000 (paid on 11 November 2021).
The first and second loans were partly oral and partly referred to in text messages. The single question in these proceedings is the identity of the borrower under the loans: was it Ms Sher personally or was it a company, or companies, associated with her?
For the reasons set out below, I have concluded that Ms Sher was the borrower under each loan contract, not a company that she was associated with.
Mr Eliopoulos commenced proceedings on 4 April 2023 and obtained default judgment on 3 August 2023. Ms Sher then filed a notice of motion seeking to set aside that judgment, asserting that the monies lent by Mr Eliopoulos were loans to companies associated with her, not to her personally. That notice of motion was heard on 22 November 2024 and orders to set it aside were made by McNaughton J on 27 February 2025: Eliopoulos v Sher [2025] NSWSC 115.
These reasons relate to the final disposition of these proceedings. Ms Sher was self-represented at the hearing.
Mr Eliopoulos and Ms Sher knew one another as he had acted as her solicitor in relation to various matters since about 2016.
Sometime in late September 2021, Mr Eliopoulos and Ms Sher met to discuss the terms of a loan in the food hall of Westfield, Bondi Junction (Food Hall Meeting). While Mr Eliopoulos and Ms Sher have slightly different recall of what was said at that meeting, Mr Eliopoulos’ version (given in his Affidavit sworn 13 September 2024) was as follows:
“9 I recall meeting with Ms Sher at a café in Bondi Junction in late September 2021 to discuss her ‘new matter’. When I met with Ms Sher, I recall her saying that she needed to borrow some money and she would give me a good return. Mr Sher asked me to lend her $400,000 on the basis that I would receive $430,000 back at the end of October 2021. I proposed I would lend her $400,000 on the basis that I would receive $450,000 back at the end of October 2021. Ms Sher agreed to my terms.
10 During our conversation, I specifically recall Ms Sher saying ‘I promise I will pay you back. Don’t worry I guarantee it.’ I said ‘Ok, please don’t let me down.’”
“35 I did meet with Mr Eliopoulos at the Food Hall at Westfield, Bondi Junction.
36 At the time I said ‘The property next to us at 79-81 on Old South Head Rd, is up for sale. It is going up for auction on 12.10.2021.’ I had negotiated 12 month delayed settlement on the contract. I explained that ‘it is a large site, and this purchase will increase the value of our entire property portfolio.’
37 Mr Eliopoulos asked, ‘How much do you need?’ I said ‘I need $400,00**0. Can you do it?I’ He said ‘Yes’.
38 Mr Eliopoulos asked ‘How long do you need it for?’ I replied, ‘Not long, 2 months, I have already applied to refinance my other properties.’ At a later stage I sent him a copy of the Term Sheet which I received from Merricks Capital listing the properties and the companies related to them.
39 I asked Mr Eliopoulos, ‘How much do you want for the loan?’ I do not recollect the actual words used in the conversation but I do recall he knew the properties. I did ask at the time ‘What security do you want?’.
40 Mr Eliopoulos said ‘I don’t need any security.’”
In cross-examination, Ms Sher accepted that there was also a discussion at the Food Hall Meeting about what interest would be payable on the loan and accepted that, if later text messages referred to $50,000 as being the interest payable, then that was the amount she agreed to pay at the Food Hall Meeting (see [26] below).
Mr Eliopoulos gave a further version of the conversation at the Food Hall Meeting in his Affidavit sworn 10 June 2026, in which he referred to Ms Sher’s version (at [9] above) and gave evidence that the conversation was not in those terms and was instead to the following effect:
“She said: ‘I need help. I need to borrow some money.’
I said: ‘How much do you need?’
She said: ‘I need a lot but it’s only for a short time, about one month. I’ll give you a good return.’
I said: ‘How much do you need?’
She said: ‘$400,000.’
I said: ‘What’s it for?’
She said: ‘An opportunity has come up where I can buy some property with a long settlement. I need the funds for a deposit. It’s a good opportunity.’
I said: ‘How much interest for one month?’
She said: ‘$30,000. I’ll pay you back $430,000 at the mid of October.’
I said: ‘Okay but I’ll need some security.’
She said: ‘Can we do it unsecured? It’s only one month and the return is good. I promise I will pay you back. I have lots of assets. Don’t worry, I guarantee it.’
I said: ‘I’ll lend you $400,000 but if it’s unsecured I want back $450,000 by the end of October.’
She said: ‘Yes, okay. Thank you.’”
In Ms Sher’s submissions, she points to the fact that, in the June 2026 Affidavit, Mr Eliopoulos gave detailed evidence of their conversation at the Food Hall Meeting (see [11] above) and submits that his recall in that June 2026 Affidavit is to be contrasted with his lack of recall about other matters at the hearing.
However, Ms Sher did not cross-examine him about the version of the conversation in the June 2026 Affidavit. In any event, Mr Eliopoulos’ versions of the Food Hall Meeting in the September 2024 Affidavit (at [8] above) and in the June 2026 Affidavit (at [11] above) do not differ in material respects from Ms Sher’s version (see [9]-[10] above). Even on Ms Sher’s version of the Food Hall Meeting:
the terms of a loan were agreed as follows:
(a) Mr Eliopoulos would loan a principal amount of $400,000; (b) the time frame for the loan would be short term, about 1 or 2 months; (c) the interest payable would be $50,000; (d) the loan would be unsecured;
On 21 September 2021, Ms Sher and Mr Eliopoulos met on Ben Eden Street in Bondi Junction (Ben Eden St Meeting). There is a dispute about whether this meeting occurred shortly prior to, or after, the Food Hall Meeting. There is also a dispute as to what happened at the meeting.
First, in terms of the timing of the meeting, I accept Mr Eliopoulos’ evidence that it occurred prior to the Food Hall Meeting. During Ms Sher’s oral evidence, she repeatedly indicated her lack of recall about this period and specific details of conversations and events. In this respect, I also rely on the reasoning at [21] below.
Second, in terms of the content of the meeting, Ms Sher’s evidence is that they discussed the proposed loan and that she “did a site inspection with him of all my sites, the boundaries and showed him the subject of the loan. I wanted him to fully visualise and understand the sites relating to the loan”.
Mr Eliopoulos’ evidence is that at no point did he inspect any properties or have a “site inspection” with Ms Sher, either on 21 September 2021 or otherwise. Rather, Mr Eliopoulos’ evidence is that, at the Ben Eden St Meeting, they discussed issues relating to his legal representation of her in respect of Crime Commission matters (relating to her arrest in 2016 for possession of methamphetamines) and issues relating to her son, Uri, who was a co-accused living overseas and for whom there was a warrant for arrest.
I observe that under cross-examination, Ms Sher suggested for the first time the following about the Ben Eden St Meeting: “[n]o, what I am saying is the meeting about the Ben Eden Street was specifically to make Mr Eliopoulos aware of where the security for his money is lying. It’s to demonstrate that these are the assets backing up that loan” (Tr 45.15). Thus, Ms Sher had apparently recalled, in oral evidence, aspects of a conversation held nearly five years ago, which are not contained in her Affidavit of 8 October 2024. I do not accept this new evidence. As set out above, during her oral evidence, Ms Sher repeatedly indicated her lack of recall about this period and specific details of conversations and events.
In any event, even if I were to accept Ms Sher’s new evidence about the Ben Eden St Meeting, it would not affect the outcome. She does not suggest that at this meeting she made any reference to the matters set out in paragraph [22] below.
Ms Sher also points to her evidence that the next text message between them (after the Ben Eden St Meeting) was Mr Eliopoulos’ text of 7 October 2021 in which he wrote “[a]ccount?” and she replied by providing the bank account details of U & G Properties Pty Ltd (U & G Properties) (see [24] below). She submits on this basis that Mr Eliopoulos’ evidence that the Ben Eden St Meeting concerned unrelated matters is inconsistent with his own text messages and the fact that the loan funds were used towards the acquisition of property.
I accept, as Mr Eliopoulos submits, that the fact that there was such a gap between the Ben Eden St Meeting on 21 September 2021 and the next text message (of 7 October 2021) is more consistent with his version of events; being that the Ben Eden St Meeting concerned a different matter, and that the meeting regarding the loan (being the Food Hall Meeting) occurred later in September 2021.
In any event, the outcome in this matter is not affected by whose version of events as to what was discussed at the Ben Eden St Meeting is accepted (or whether it occurred before or after the Food Hall Meeting). Even on Ms Sher’s version, she does not suggest that at the Ben Eden St Meeting she made any reference to a corporate entity associated with her (let alone mention that a particular corporate entity would be the purchaser of the property she was showing Mr Eliopoulos, or ask him whether a corporate entity associated with her could be the borrower under any proposed loan).
On 7 October 2021, Mr Eliopoulos sent a text message to Ms Sher as follows: “[a]ccount?”. Ms Sher responded by text providing bank account details of U & G Properties Pty Ltd and saying “[t]hank you so much”. Ms Sher then sent text messages asking whether she could change the bank account into which the loan monies would be transferred but then confirmed she did not wish to change the account.
On 7, 9, 10 and 12 October 2021, Mr Eliopoulos transferred four lots of $100,000, totalling $400,000, to the U & G Properties bank account that Ms Sher had nominated in her text message of 7 October 2021. The narrations that Mr Eliopoulos included on the four bank transfers were (being narrations that appear in bank statements of the U & G Properties bank account):
“Loan on purchase of property.”;
“Loan on property purchase 2nd Transfer.”;
“Loan on property purchase”; and
“Loan on property purchase”.
During the period these transfers were being made, there were text messages back and forth between Mr Eliopoulos and Ms Sher where she asks about when the next amount will be transferred. Mr Eliopoulos explains about his banking transfer limits which mean he has to make transfers on different days. During these text exchanges, Mr Eliopoulos refers on multiple occasions to whether “you” have received the amounts. After the third bank transfer (i.e. when $300,000 had already been transferred), Mr Eliopoulos texted: “[d]o you need anymore? Or that’s it?” to which she responds: “[y]es, one more please”.
On 11 October 2021, Mr Eliopoulos sent a text message to Ms Sher confirming that he would transfer the final $100,000; that the total loan was $400,000 and $450,000 was to be repayable by the end of October 2021. That message read:
CE: “Gilla confirm one more transfer of 100k now? Total will be 400k. Return is 450k by end of October. Don’t complain! It’s unsecured and quick. It’s a small fee. Let me know.”
GS: “Sorry, I didn’t see the message. Yes please.”
GS: “I am going ahead with the purchase. What time can you do the transfer. Thank you”
On 19 October 2021, there was a further conversation between Mr Eliopoulos and Ms Sher regarding an increase in the principal of the first loan. It is not in dispute that Mr Eliopoulos agreed to lend a further amount of $250,000.
Mr Eliopoulos’ version of that conversation on 19 October 2021 is:
“On or about 19 October 2021, I received a telephone call from Ms Sher asking to borrow a further $250,000. Ms Sher and I agreed verbally that I would lend her the further $250,000 such that the total principal of the loan became $650,000. Ms Sher and I further agreed that she would repay the total principal plus $120,000 in interest by no later than 3 December 2021.”
In Ms Sher’s affidavit evidence, she did not deny the terms of this conversation as recounted by Mr Eliopoulos.
I note in this respect that, although Ms Sher was ultimately self-represented in this proceeding, at the time of swearing her affidavit, she was legally represented. Thus, the fact that she did not deny a conversation in the terms alleged by Mr Eliopoulos (at [31] above) – that he would loan her the additional $250,000 – may take on more significance. However, I need not rely on that circumstance, given I have formed the view based on a range of other matters, that she was personally the borrower under the loans (see [114] below).
The only affidavit evidence given by Ms Sher regarding the conversation on 19 October 2021 about the $250,000 increase in loan was at paragraph [45] of her Affidavit of 8 October 2024. That was in the following terms:
“I repeat that the purpose of the further loan [i.e. the increase of $250,000] was to pay for the deposit on property at 79-81 Old South Head Road. I also explained to Mr Eliopoulos that I had had a long standing agreement with my sister to purchase her property at 75 Old South Head Road Bondi Junction.”
“I refer to paragraph 45 of the defendant’s affidavit. I deny that Ms Sher told me that the additional funds were to be used in connection with a purchase from Ms Sher’s sister. The telephone conversation was to the effect:
She said: ‘I need to borrow some more money. The vendor wants a bigger deposit. Can you do it?’
I said: ‘How much now?’
She said: ‘$250,000.’
I said: ‘How much return?’
She said: ‘How much do you want?’
I said: ‘It’s unsecured so ten percent per month. But when do I get it back?’
She said: ‘By 3 December 2021.’
I said: ‘It’s about two months so I want $120,000 on top of the $650,000 by 3 December.’
She said: ‘Okay, thanks.’”
Regarding Ms Sher’s version at paragraph [45] of her Affidavit, the first sentence is her subjective purpose of how the loan proceeds would be used. Even if she did tell Mr Eliopoulos this, there is no suggestion that she told him which corporate entity was purchasing that property. In relation to the second sentence of paragraph [45] of her Affidavit, this is evidence of what she says she told Mr Eliopoulos. However, this related to another property, being a purchase of 75 Old South Head Road (Number 75) from her sister, Helen Sher. Again, Ms Sher did not give evidence that she informed Mr Eliopoulos during the conversation on 19 October 2021 that a particular corporate entity would be the purchaser of any property she referred to or that she asked him whether a corporate entity associated with her could be the borrower in relation to the new tranche of the loan.
On 21 October 2021, Mr Eliopoulos sent Ms Sher a text message in relation to the terms of the amended loan. That text message read:
CE: “Hi Gilla. I’ll lend you 650,000 in total. 120,000 on top by 3 December. That’s 6 weeks from now. You would have 400,000 for 8 weeks by then. Agreed? Please let me know.”
Ms Sher responded: “[y]es”. In this respect, Ms Sher admitted in her Defence that it was agreed between the parties that the amount of interest to be paid under the first loan, after the increase in principal to $650,000, was $120,000 and that this amount, together with the total principal of $650,000 was repayable on 3 December 2021.
Thus, even on Ms Sher’s version of events:
she asked for an increase in the loan from Mr Eliopoulos to a principal amount of $650,000 to which he agreed;
the time frame for the loan would be short term, namely, the entire loan was repayable on 3 December 2021;
the amount of interest that would be payable on the loan was $120,000;
both the loan and interest were repayable on 3 December 2021; and
there was no mention of any corporate entity associated with her (let alone discussion that a corporate entity associated with her would be the borrower under the loan).
On 21 and 25 October 2021, Mr Eliopoulos transferred into U & G Properties’ account three further amounts which totalled $250,000. The narrations Mr Eliopoulos included on the three bank transfers were:
“Loan on property purchase.”;
“Loan on property purchase”; and
“Loan on property p”.
The text messages between Mr Eliopoulos and Ms Sher during this period (starting on 23 October 2021) were as follows:
CE: “I did another 100 last night. 50 today. 650 total.”
GS: “Thank you”
CE: “Last 50 done. Total 650000 loaned.”
GS: “Thank you”
CE: “You got 650 now?”
GS: “I think so.”
CE: “You don’t know?
GS: “Now I can escape. Lol. No where to run”
GS: “Yes I got it.”
GS: “All good.”
CE: “Very funny!”
GS: “Thank you.”
CE: “That’s ok. Just please don’t let me down. Otherwise I will be escaping with you.”
On 10 November 2021, there was a phone conversation between Mr Eliopoulos and Ms Sher about a second loan.
Mr Eliopoulos’ version of that phone conversation, as affirmed in his Affidavit of 13 September 2024, is:
“On or about 10 November 2021, I received a further telephone call from Ms Sher asking to borrow an additional $150,000. Ms Sher and I agreed that I would loan Ms Sher the additional $150,000 such that the total principal amount loaned to Ms Sher became $800,000 and that Ms Sher would pay interest on the principal amount of $135,000, with the total sum of $935,000 to be repaid by Ms Sher on or before 3 December 2021.”
Ms Sher did not deny Mr Eliopoulos’ version of that phone conversation in her Affidavit of 8 October 2024. Rather, her evidence was that she “asked Mr Eliopoulos to directly payment (sic) of the second loan to the vendor, Rasko Investments”.
The fact that Ms Sher did not deny a conversation in the terms alleged by Mr Eliopoulos (at [44] above) – that he would loan her a new loan of $150,000 – would ordinarily take on significance. However, as referred to at [33] above, I need not rely on that circumstance, given I have formed the view, based on a range of other matters, that she was personally the borrower under the loans (see [114] below).
Mr Eliopoulos gave a further version of the phone conversation on 10 November 2021 in his 10 June 2026 Affidavit:
“I refer to paragraph 54-55 of the defendant’s affidavit. On or about 10 November 2021, I received a further telephone call from Ms Sher asking to borrow an additional $150,000.
She said: ‘I need a bit more money. I want to put a deposit on another property. It’s a good opportunity. I can’t miss this. It’s just: come up.’
I said: ‘I can’t. I have building costs to pay for.’
She said: ‘If you can please help me this is an opportunity that will never come up again.’
I said: ‘How much do you need now?’
She said: ‘One hundred and fifty thousand ($150,000).’
I said: ‘Ok but it has to come back on 3 December with the rest.’
She said: ‘Yes.’
I said: ‘The interest is fifteen thousand ($15,000) on top.’
She said: ‘Ok that’s fair, Thank you.’”
Mr Eliopoulos was not cross-examined about his version of events as set out at either [44] or [47] above. In any event, it is apparent from Ms Sher’s evidence and the contemporaneous documents that the following matters are common ground in relation to the terms of the second loan that were agreed upon on 10 November 2021:
Ms Sher and Mr Eliopoulos agreed that:
(a) he would loan a further amount of $150,000; (b) the amount of interest payable on the $150,000 loan was $15,000; and (c) the $150,000 loan would be repayable on 3 December 2021 (together with the first loan of $650,000);
Ms Sher told Mr Eliopoulos that the money was for a deposit on a different property, being a property other than Number 79-81; and
there was no discussion that a particular corporate entity would be the purchaser of the other property Ms Sher mentioned; nor did Ms Sher request whether a corporate entity associated with her could be the borrower under the second loan.
On 11 November 2021 at 11:56am, Ms Sher forwarded by email to Mr Eliopoulos a Letter of Offer she had received from Merricks Capital. The Letter of Offer was dated 9 November 2021 and was addressed to “Gilla Sher, U & G Properties, Aharon Investments Pty Ltd”. I discuss the relevance of the Letter of Offer at [105]-[112] below.
On 11 November 2021 at 2:03pm, Ms Sher emailed to Mr Eliopoulos the details of the bank account of Rasko Investments Pty Ltd (Rasko), which email she concluded with the words “[t]hanks so much” and signed off with “Gilla”. Shortly thereafter, Ms Sher sent a text message to Mr Eliopoulos in which she said “I have emailed the details”.
On 11 November 2021 at 2:29pm Mr Eliopoulos transferred $150,000 to the bank account of Rasko. The narration Mr Eliopoulos included on the bank transfer was: “Gilla Sher dep”.
Shortly thereafter, at 3:05pm on 11 November 2021, Mr Eliopoulos texted back a screenshot evidencing that he had transferred $150,000 into the bank account of Rasko. There was no dispute at the hearing that Ms Sher had directed Mr Eliopoulos to pay the monies for the second loan directly to Rasko. Rasko was the vendor of the property at Number 79-81.
Later on 11 November 2021, at 10:28pm, Mr Eliopoulos sent a text message to Ms Sher stating “confirm 935 return in total on or before 3 December 2021”. This was a confirmation, as was common ground at the hearing, that $935,000 was repayable in relation to the total of the first and second loans, being:
$800,000 in principal (being $650,000 for the first loan plus $150,000 for the second loan); and
$135,000 in interest (being $120,000 in respect of the first loan plus $15,000 in respect of the second loan).
It appears Ms Sher did not respond to this text message. However, she accepts in her Defence that the loan monies of $150,000 were paid by Mr Eliopoulos to Rasko, that $15,000 was the interest payable on the loan and that both loans would be repayable (with the interest) on 3 December 2021.
Neither the first nor second loan was repaid by 3 December 2021.
On around 10 December 2021, Mr Eliopoulos asserts that he struck an agreement with Ms Sher granting an extension of time to 10 January 2022 to repay the $935,000 owing (that had been due for repayment on 3 December 2021) in return for Ms Sher paying an additional $80,000 in interest.
Ms Sher accepts the additional $80,000 interest was agreed to be payable. Consistently with her defence regarding the identity of the borrower under those loans, she contends that “the Property Companies” (being U & G Properties and Aharon Investments Pty Ltd (Aharon)) owed that additional interest, not her personally.
Thus, it is common ground that the amount owing to Mr Eliopoulos as at 10 January 2022 was $1,015,000 (being the $935,000 figure referred to at [53] above plus $80,000).
On 11 January 2022, a loan repayment of $50,000 was made to Mr Eliopoulos. The narration that appears on Mr Eliopooulos’ bank account statement is:
11 Jan SHER HALINA GILL, $50,000.00
Loan Eliopoulos
13 Jan SHER HALINA GILL $200,000.00
ELIOPOULOS LOAN
The statement of claim sets out various alleged negotiations in terms of repayment dates and new impositions of interest that are said to have occurred between March 2022 and December 2022. I do not need to determine these factual matters as Mr Eliopoulos has, by his written submissions, disavowed seeking such additional amounts of interest.
Mr Eliopoulos’ evidence is that on or around 6 January 2023, he offered by compromise to reduce the amount repayable to him to $795,000 if paid in January 2023, which he asserts was accepted by Ms Sher on 7 January 2023. Ms Sher accepts that this occurred, but consistently with her defence, asserts that she did not agree on her own behalf but did so on behalf “of the Companies”. This agreement as to a compromise is evidenced in a series of text messages on 6 and 7 January 2023, which read:
CE: “Gilla my offer of resolution is more than reasonable. It’s so fair. It’s 9k per month instead of 60k per month. Please talk to Michael Feehan and adjust the figures please to pay me out 795k and we are done.”
CE: “Please send me confirmation.
I desperately need this money back.”
GS: “I agree. I am waiting for the mortgage docs.”
CE: “Is it approved? Valuations done?”
CE: “You agree on $795? It’s fair Gilla. I’m not ripping you off.”
GS: “Michael says its approved. Valuation has been assigned at Michael’s request. I am waiting for mortgage docs. Yes I agree with $795. Yes it is fair. So let’s pray it all happens next week.”
GS: “Hi Chris, Please supply Michael at Carmicheal a letter with a pay out for $700,000. Add your bank account details. Settlement is schedule[d] for 20.1.2023. The other $95,000 I will pay you within 2 days of settlement. It was better not to rock the boat. The $95k is there and I will get it at settlement.”
CE: “Ok I will thanks. I’ll send an email”
GS: “I just spoke to Michael. They will pay you the full $795,000 directly to you. You can mention that it is repayment of a private loan and interest.”
CE: “Ok cool. Thanks.”
Thus, the parties agreed to change the date for repayment to 20 January 2023 (being the date of a proposed refinance that Ms Sher was organising) and agreed that $795,000 was owing (being $800,000 original principal minus repayment of $250,000 plus interest of $245,000). That is the amount Mr Eliopoulos seeks to recover in these proceedings. I note in this respect that the $795,000 figure reflects the fact that a repayment of $250,000 had already occurred.
On 9 March 2023, Mr Eliopoulos sent, through his solicitors, a Letter of Demand to Ms Sher which:
(a) set out the final demand for the repayment of $1,585,000 due and payable by Ms Sher to Mr Eliopoulos within seven days; and (b) offered to compromise the amount repayable to him by Ms Sher to $795,000 paid within seven days of the date of the Letter of Demand.
Mr Eliopoulos bears the legal onus of proving that Ms Sher was the other party to the contract: Pethybridge v Stedikas Holdings Pty Ltd [2007] NSWCA 154; (2007) Aust Contract R 90-263 at [54] (Campbell JA, Beazley and Basten JJA agreeing).
The role of the Court is, relevantly, to determine from the objective evidence what a reasonable observer of the communications that led to the entering of the contract, together with the background facts known to the parties, would conclude as to the identity of the borrower: Pethybridge at [54]. In Air Tahiti Nui Pty Ltd v McKenzie (2009) 77 NSWLR 299; [2009] NSWCA 429, Allsop P and Handley AJA (Hodgson JA agreeing) stated at [28]:
“The identity of the contracting party is to be determined looking at the matter objectively, examining and construing any relevant documents in the factual matrix in which they were created and ascertaining between whom the parties objectively intended to contract. This is, to a point, a process of construction similar to the task of identifying whether a clearly contractual document (such as a bill of lading) is made with one party or another (such as a shipowner or time charterer). Where the documents are silent or ambiguous, but there is undoubtedly a contract, the identity of the parties must be determined objectively from the surrounding circumstances.” (citations omitted)
Post-contractual conduct can be used to determine the parties to an unwritten or partly written contract, as a necessary step in considering formation: Damien v JKAM Investments Pty Ltd [2015] NSWCA 368 at [28] (Tobias AJA, Gleeson and Simpson JJA agreeing); BH Australia Constructions Pty Ltd v Kapeller (2019) 100 NSWLR 367; [2019] NSWSC 1086 at [69], [81] (Leeming JA); Cooper v Hobbs [2013] NSWCA 70 at [54] (McColl JA, Bergin CJ in Eq agreeing).
Ms Sher made a submission to the effect that, in order to meet his onus, Mr Eliopoulos must establish that there was some relationship – such as agency, trust, nominee, beneficial receipt or guarantee – under which the monies were advanced before it could be concluded that there was a loan to her personally. I reject this submission. The task of the Court is not to fix on whether such a relationship or state of affairs exists. Rather, in the present case, the statement of Brereton JA (with whom Bell CJ and White JA agreed) in Mills v Walsh [2022] NSWCA 255 at [73] is apposite:
“The parties to a contract are identified according to the objective theory of contract, which involves ascertaining the intention of the parties from their communications and the circumstances in their mutual knowledge, including their evident commercial aims and expectations; their subjective beliefs and intentions are irrelevant, save insofar as they are manifest and shared. However, the post-contractual conduct of the parties may more readily be resorted to for this purpose than for the purpose of construing contractual terms.”
Mr Eliopoulos submits that the authorities as to the types of cases where post-contractual conduct can properly be taken into account are somewhat unclear and some must be read with caution. He submits that the approach taken in the authorities does not appear to allow any scope for post-contractual conduct to be taken into account in a case like this where there is no dispute that a contract exists. Further, Mr Eliopoulos submits that, to the extent it could be relevant in such a case, its relevance appears limited to assisting the court to resolve a factual dispute as to what was communicated by the parties in forming an oral contract.
Ms Sher submits that I am entitled to have regard to the post-contractual conduct and refers to the decision of the Court of Appeal in Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153; [2001] NSWCA 61.
Mr Eliopoulos submits that Brambles Holdings is authority only for the proposition that post-contractual conduct can be taken into account when determining whether a contract was formed, not determining the parties to the contract. He submits that where there is no dispute that a contract exists (as is the case here), the correct approach is that prescribed by Air Tahiti.
However, in Filadelfia Projects Pty Ltd v Entirity Business Services Pty Ltd (No 2) [2011] NSWSC 116 at [38], Ball J observed as follows:
“… it is clear that post-contractual conduct can be taken into account in determining whether a contract was formed: see, for example, Geebung Investments Pty Ltd v Varga Group Investments (No 8) Pty Ltd (1995) 7 BPR 14,551 at 14,569–70 per Kirby P; Brambles Holdings Ltd v Bathurst City Council [2001] NSWCA 61; (2001) 53 NSWLR 153 at [25]. Necessarily, that extends to the question whether it was formed between particular parties, since contracts do not exist in the abstract. It is equally clear that the question whether there is a contract is to be determined objectively and not by reference to the subjective intention of the parties: see, for example, Ryledar Pty Ltd v Euphoric Pty Ltd [2007] NSWCA 65; (2007) 69 NSWLR 603 at [262]–[265] per Campbell JA.”
Were it necessary to decide this point, I would reject Mr Eliopoulos’ submission that I may not take post-contractual conduct into account in this matter. In the circumstances of this case, where the contract is partly oral and partly evidenced in writing, the question as to whether the contract was formed between particular parties is fundamentally inseparable from the question of whether a contract was formed at all. It is therefore not correct in my view to submit that the Court need not consider formation in this case. As Ball J observed in Filadelfia Projects at [38], after referring to the decision in Brambles Holdings*,* it is permissible to take post-contractual conduct into account in determining whether a contract was formed; and that necessarily extends to the question whether it was formed between particular parties (being the only matter in issue in these proceedings).
However, I do not need to decide this point given that I have reached the conclusion that the borrower under each of the loans was Ms Sher whether the post-contractual conduct is taken into account or not.
First, during their discussions, the first person was used in all communications and text messages between Mr Eliopoulos and Ms Sher. That is, Mr Eliopoulos only ever referred to the borrower as “you” and Ms Sher only referred to the borrower as being “I”.
Second, and relatedly, there is no evidence, even from Ms Sher, that she ever mentioned a corporate entity in her discussions with Mr Eliopoulos where the loan terms were struck (the loan discussions), let alone referred to one as a proposed borrower. Nor is there any evidence that she ever said to him that she was speaking to him in her capacity as a director. I find, noting there is no conflict in the evidence, that at no time in the loan discussions did Ms Sher refer to a corporate entity, much less refer to the loans being to a corporate entity as opposed to herself personally.
The matters at [79]-[80] strongly point to the conclusion that Ms Sher personally was the borrower.
Third, the entity to which the loan funds were to be paid was not provided until after the conversation in which the terms of the loan had been agreed.
In relation to the first loan, the terms of that loan had been agreed in late September (see [8] and [13] above). The first mention of U & G Properties in this context was when, on 7 October 2021, Mr Eliopoulos asked Ms Sher to identify the account she wanted the loan monies to be paid into, and she nominated the bank account of U & G Properties (see [23] above). Further, after having nominated the U & G Properties bank account, Ms Sher then sent text messages asking whether she could change the bank account into which the loan monies would be transferred but then confirmed she did not wish to change the account. The further tranche of the first loan, $250,000 was then paid on 21 and 25 October 2021 into U & G Properties’ bank account.
In relation to the second loan, the terms of that loan had been agreed on about 10 November 2021 (see [48] above). It was on the following day that Ms Sher directed Mr Eliopoulos to pay the funds to Rasko (being the vendor of Number 79-81). In this respect, I observe that it is not correct, as Ms Sher submitted in writing, that the second loan was “paid to a Company account” associated with her.
In my view, the matters at [82]-[84] are consistent with the conclusion that the identity of the borrower was Ms Sher personally and she was directing where the funds would go. Mr Eliopoulos submits that the directions Ms Sher gave as to the bank account into which the loan monies should be advanced should be characterised as “post-contractual conduct” because they occurred after the terms of each loan had been struck. In my view, this is not “post-contractual conduct” in the relevant sense. Rather, the salience is that the conversations in which the terms of the loans were agreed did not include a reference to the entity to which the loan funds were to be paid.
Ms Sher places emphasis on the fact that the loan monies were not transferred by Mr Eliopoulos to her personal bank account; saying the monies never “came into [her] hands”. In this respect, Ms Sher submitted, without reference to authority, that a person cannot ordinarily be the borrower of funds she never received unless there is some pleaded basis. I reject this submission. The fact that the monies did not come into her “hands” in this sense does not resolve the question of the identity of the borrower. Plainly enough, the objective circumstances of a loan could give rise to the conclusion that the borrower is an individual person, being a person who has directed that the monies be paid to some other entity. An example of such circumstances is, as Mr Eliopoulos submits, the reasoning and outcome in Davies v Apted [2013] SASCFC 92. (See in particular the reasons of Vanstone J at [6], [28]-[31] and [35] (Kourakis CJ and Peek J agreeing)).
Ms Sher points to the fact that the loan monies were transferred to a bank account of one of her companies, U & G Properties (the first loan) and to the bank account of a third-party vendor (the second loan) and to the fact that she nominated the account into which the monies should be paid. She submits that to nominate where monies will go in this way is, objectively speaking, to describe a director instructing payment to a company account. In this respect, Ms Sher was the sole director and shareholder of both U & G Properties and Aharon.
I reject those submissions. As set out at [80] above, at no point in the conversations in which the terms of the loan were struck did Ms Sher refer to a corporate entity (or to herself acting as a director), much less refer to the loans being to a corporate entity as opposed to herself personally. In these circumstances, a direction given after the terms of the loan have been struck – that monies be paid to a nominated account of an entity – would not cause a reasonable bystander to consider that the borrower was that entity.
Ms Sher also points to the fact that her text conversations with Mr Eliopoulos used informal language and did not involve what she refers to as “a single fixed personal loan”, but rather, involved a rolling series of transfers. She submits that the informal language by which the loans were struck are “the language of informal short-term finance to complete a property acquisition, not of a considered personal loan of approximately $800,000 which an experienced solicitor would ordinarily document and secure”. She also refers to the fact that Mr Eliopoulos is a solicitor who did not require a formal loan agreement, guarantee or security. She also points to the fact that, initially in the Food Hall Meeting, Mr Eliopoulos asked for security (see [11] above), but ultimately did not take any security (or guarantee or written agreement). Ms Sher contends that all of these matters are objective circumstances favouring the conclusion that she was not personally the borrower.
I reject those submissions. While Mr Eliopoulos was a solicitor, in these loan interactions with Ms Sher he was acting as someone providing short-term finance. In these circumstances, the informality of the text communications, the absence of documentation and rolling nature of the advances, toll in favour of the conclusion that the negotiations were for a personal loan.
In particular, in relation to the fact that Mr Eliopoulos did not ultimately insist on security being given for the first loan, it is readily to be inferred that, had Ms Sher mentioned the prospect that a corporate entity associated with her would be the borrower, Mr Eliopoulos would have sought to better secure his position: see by analogy, Davies v Apted at [33] (Vanstone J (Kourakis CJ and Peek J agreeing)).
It is significant to the risk profile of a loan if it is to be made to a corporate entity rather than to an individual personally. In Davies v Apted at [3], Kourakis CJ observed as follows:
“… in my view, it is consistent with the objective theory of contract to have regard to the hesitation that a party would feel about adopting the fraught option of contracting with the corporate alter-ego alone and not with its principal, in determining whether an oral contract was made with the principal, the corporate alter-ego, or both. Equally, the reasonable bystander can take it that a person engaged in contractual negotiations appreciates the reluctance that the other party may feel about contracting with his or her alter-ego, or, at least, about contracting with the alter-ego alone.”
Ms Sher relies on a number of background facts said to be known to the parties.
First, Ms Sher points to the fact that Mr Eliopoulos knew that the loan monies were to be used towards property transactions.
I find that Ms Sher did tell Mr Eliopoulos that the monies for the first loan were to be used towards a purchase of property (likely Number 79-81) and that the monies for the second loan were to be used towards the purchase of another property (likely Number 75).
Ms Sher points to her evidence that the Ben Eden St Meeting on 21 September 2021 was a “site” visit to inspect Number 79-81, something Mr Eliopoulos denies (see [17] above). However, I do not need to determine whether there was such a “site” visit. That is because Ms Sher did not give evidence that, at that meeting, she made any reference to a corporate entity associated with her (see [22] above).
I also do not need to determine whether Mr Eliopoulos knew the exact property that monies under either loan would be used towards. That is because even if U & G Properties and/or Aharon had been identified as the relevant purchaser of the new property to be acquired (at the Ben Eden St Meeting, the Food Hall Meeting or otherwise), that would not be a factor that could cause a reasonable bystander to consider that the borrower was one of those entities. That is particularly the case given the matters set out at [79]-[80] above. In my view, the identity of the purchaser, and the fact that loan monies were to be used towards a property transaction, are neutral in terms of who the borrower was: see by analogy, Davies v Apted at [29], [31] (Vanstone J (Kourakis CJ and Peek J agreeing)).
Second, Ms Sher submits that a background fact known to both parties is that Mr Eliopoulos had knowledge of the fact that she structured her affairs through companies and that, accordingly, an inference ought to be drawn that he knew that the loans were being made to companies associated with her.
It is common ground that Mr Eliopoulos and Ms Sher had previous connections as he had acted as her solicitor in relation to various matters since about 2016.
In her written submissions, Ms Sher pointed to the fact that in March 2021, Mr Eliopoulos had witnessed her signature on documents associated with financing provided to Aharon that was secured over various properties, including 77 Old South Head Road and seven properties in Victoria. She submits that this means that Mr Eliopoulos knew that the borrowing for these properties “was structured at the company level”. Even assuming Mr Eliopoulos knew in March 2021 that a company associated with Ms Sher (namely, Aharon) was borrowing monies, that says nothing about the identity of the borrower for a loan he made in October later that year.
Ms Sher also points to the fact that in February 2023, some 15 months after the loans had been advanced, Mr Eliopoulos had direct communications with financiers who were dealing with Ms Sher’s companies and submits that this is inconsistent with his contention that he knew little of the companies’ dealings. What Mr Eliopoulos knew about the companies’ dealings in February 2023 is not relevant to the question of what he knew some 15 months earlier when the loans were advanced. In any event, Mr Eliopoulos’ evidence, which I accept, was that he was unaware of the details and extent of Ms Sher’s land holdings. Under cross-examination, he gave evidence that while he knew the names of the companies U & G Properties and Aharon as being associated with Ms Sher, he did not know “anything about the companies or who the directors were or any of the dealings with that company”.
Ms Sher also submits that Mr Eliopoulos’ “knowledge of the company structure was detailed and current”. The evidence before the Court does not support that submission. Even assuming that Mr Eliopoulos knew as at September 2021 that Ms Sher structured her affairs through companies that owned properties (and that his knowledge of her company structure was detailed and current), it would not follow that he would expect that a new property to be acquired would also be acquired by one of those corporate entities, let alone by one as opposed to the other.
A telling difficulty in this respect is that, although Ms Sher accepts the monies were loaned, she does not identify which company associated with her was said to be the borrower. Instead, in her Defence and submissions, she uses the compendious term “the Companies” when seeking to describe the borrower.
T**hird, Ms Sher points to the fact that on 11 November 2021, she forwarded by email to Mr Eliopoulos a Letter of Offer she had received from Merricks Capital (see [49] above). In relation to the Letter of Offer, Ms Sher submits:
“18 The contemporaneous financing materials for this portfolio identified the companies as the borrowers. In particular, the term sheet provided to the Plaintiff named U & G Properties Pty Ltd and Aharon Investments Pty Ltd (as trustee) as the borrowers of the proposed facility. That the formal finance for these properties was structured at the company level is consistent with the Companies, and not the Defendant personally, being the borrower of the Plaintiff’s advances.”
The Letter of Offer was dated 9 November 2021 and was addressed to “Gilla Sher, U & G Properties, Aharon Investments Pty Ltd”. The Letter of Offer recited that it was “for a Land Facility for the project located at 2, 4 & 6 Bondi Rd, 71, 73, 75 & 77 Old South Head Rd, Bondi Junction (Project)” with a facility limit estimated to be $30,500,000. It further stated that it “does not constitute an offer of finance and remains subject to the satisfaction of the Conditions Precedent”. Thus, it is apparent that the Letter of Offer related to a refinancing proposal addressed to two companies, U & G Properties and Aharon, and was expressed to be in respect of several properties.
Ms Sher sent the Letter of Offer to Mr Eliopoulos the day after the phone conversation in which they had agreed on the terms of the second loan (see [43]-[48] above) and a few hours before she sent him the details of Rasko as the entity to which the second loan monies were to be transferred (see [50] above).
In the email by which Ms Sher forwarded the Letter of Offer to Mr Eliopoulos, she did not include any information as to its relevance to the second loan they had agreed on the day before. The extent of Ms Sher’s evidence about the context in which the Letter of Offer was sent is a statement in her Affidavit of 8 October 2024 that she sent it to Mr Eliopoulos “following discussions about the properties”.
Mr Eliopoulos denied in his evidence that the context in which Ms Sher had sent him the Letter of Offer on 11 November 2021 had anything to do with the commercial dealings between them. His evidence was that the context in which it was sent was his legal representation of her regarding an unexplained wealth order imposed by the Crime Commission, in relation to which he was assisting her with trying to obtain a letter from the Commission confirming the matter was finalised.
I do not need to resolve the differing versions of events as to the context behind the sending of the Letter of Offer on 11 November 2021. That is because, even accepting Ms Sher’s version – that it was sent “following discussions about the properties” and that it showed her finance for various properties “was structured at the company level” – I observe as follows. The sending of the Letter of Offer could only be relevant to the second loan, given the date. The Letter referred to several properties, but did not identify which entity owned which property. Ms Sher directed that Mr Eliopoulos pay the proceeds of the second loan directly to Rasko, being the vendor of the property at Number 79-81, but Number 79-81 was not among the properties referred to in the Letter of Offer. Thus, it is simply not apparent how the Letter of Offer is of any relevance other than to establish that Mr Eliopoulos knew that two companies associated with her were negotiating a refinance in relation to a range of properties.
Further, even assuming that Mr Eliopoulos knew as at November 2021 that two companies associated with her were negotiating a refinance in relation to a range of properties, it would not follow that he would expect that a new property to be acquired would also be acquired by one of those corporate entities, let alone by one as opposed to the other: see by analogy Davies v Apted at [31].
In my view, the fact that Ms Sher sent the Letter of Offer to Mr Eliopoulos – and the fact that two companies associated with her were negotiating a refinance – is entirely consistent with Mr Eliopoulos’ case. The fact that Ms Sher was in the process of organising refinancing, and providing evidence of that fact to Mr Eliopoulos, is an obvious reason why she was seeking short term loans from Mr Eliopoulos at high interest rates.
Finally, I observe that each of Ms Sher’s submissions as to Mr Eliopoulos’ knowledge set out at [103] to [112] above run headlong into the basic difficulty that there was no mention of any corporate entity associated with her during her loan discussions with Mr Eliopoulos (or discussion that a particular corporate entity was the purchaser/owner of any particular properties).
In my opinion, for the reasons set out above, looking at the position objectively, a reasonable observer of the communications that led to the entering of the two loan agreements, together with the background facts known to the parties, would conclude that the borrower under each of the loans was Ms Sher. I accept Mr Eliopoulos’ submission that none of the objective facts point to either U & G Properties or Aharon being the borrower (let alone both of them, as Ms Sher appears to submit).
As Mr Eliopoulos put it in his evidence: “I lent [Ms Sher] the money because [she] told me it was for an acquisition of property and that’s it. How [she] spent it, I don’t know” (Tr 34.35).
As set out above, I have reached the conclusion that, looking at the position objectively, the borrower under each of the loans was Ms Sher. However, were regard to be had to the post-contractual conduct, it leads to the same outcome.
Ms Sher submitted that various post-contractual matters lead to the conclusion that “the Companies” were the borrowers under each loan, not her personally. (Again, Ms Sher’s use of the compendious term “the Companies” as the borrower in respect of each of these post-contractual matters raises the threshold difficulty as set out at [104] above). The matters raised by Ms Sher are:
(1) the funds were applied for the companies’ purposes;
(2) the advances were repaid by the companies;
(3) the repayment was always to come from a company refinance; and
(4) Mr Eliopoulos repeatedly sought to recover by winding up the companies.
Ms Sher submits that none of the loan monies were used by her for “any personal purpose”. Instead, she places some emphasis on the path that the proceeds of the first and second loan took after they were received, including that the monies were advanced “to complete a contiguous holding” of land by a company associated with her.
In my view, this is not relevant to the analysis. Ms Sher did not tell Mr Eliopoulos (nor was he otherwise aware) which company was the purchaser of a particular property in relation to which she was proposing to deploy loan monies (see [80] above). As such, the path the loan monies took is, in the circumstances, of no importance at all: see by analogy, Davies v Apted at [30] (Vanstone J (Kourakis CJ and Peek J agreeing)).
Even if this evidence could have relevance, in my view it supports a conclusion that Ms Sher was the borrower.
First, payments totalling $300,000 were made from the U & G Properties bank account to Rasko on 11-12 October 2021 towards paying the deposit on the purchase of Number 79-81. However, as Aharon was the purchaser of that property, it owed the deposit to Rasko (and so those monies were being paid for its benefit). On Ms Sher’s case, that would presumably point towards Aharon as the borrower under the first loan. But the loan monies were not paid to Aharon. There was no evidence that Mr Eliopoulos knew that Aharon would be the purchaser of Number 79-81 (let alone knew of an arrangement between U & G Properties and Aharon regarding flows of monies between them). In my view, these matters are consistent with the conclusion that the identity of the borrower was Ms Sher personally and she was directing where the funds would go.
Second, Ms Sher also gave evidence that $250,000 from the first loan was deployed on 20 and 25 October 2021 towards paying the deposit on purchasing Number 75. Ms Sher gave evidence that Number 75 was owned by her sister and that U & G Properties had exchanged a contract on 23 August 2021 to buy that property with a completion date of 29 October 2021:
“47 In early August 2021 My sister advised me that she is ready to sell her property at 75 Old South Head Rd, Bondi Junction. She asked if I still want to buy the property from her. She said if I don’t buy it now from her, she will put in on the market to sell. I agreed and we negotiated a sale price. On 23.8.2021 I exchanged a contract with my sister, with completion date to be on 29 October 2021. Annexed at page 183-193 is a copy of the contract of sale.”
However, also in evidence was a Deed of Rescission in relation to Number 75 between Ms Sher’s sister and U & G Properties which recounted that those parties had entered a Contract for the Sale of Land on 23 August 2021.
Under the Deed, the parties agreed to rescind the Contract for Sale and simultaneously Ms Sher’s sister would enter a new Contract for Sale of the property with Aharon atf Aharon Investments Family Trust as the purchaser, which also had the completion date of 29 October 2021. While the evidence is unclear as to exactly when the Deed of Rescission was entered into, I infer it was entered before 29 October 2021 (as that was the completion date under the new Contract for Sale selling the property to Aharon). The Deed of Rescission also provided that the deposit that had been paid under the Contract for Sale to U & G Properties would be applied in part payment of the deposit payable by Aharon under the new Contract for Sale.
It is not clear on the evidence whether, at the point at which Ms Sher was negotiating the terms of the first loan with Mr Eliopoulos, the identity of the purchaser of Ms Sher’s sister’s property at Number 75 was U & G Properties (the original position) or Aharon (after the Deed of Rescission). However, I need not resolve this timing issue as it does not matter either way. That is because there was no evidence that Mr Eliopoulos had knowledge that any particular entity was the purchaser of Number 75 (let alone knowledge of the detail that U & G Properties was originally the purchaser of Number 75 or that Aharon was later interposed as the purchaser).
In relation to the second loan, Mr Eliopoulos paid those monies directly to Rasko at the direction of Ms Sher. There is no evidence that Mr Eliopoulos knew anything about the fact that a particular corporate entity associated with Ms Sher was purchasing the property from Rasko. The actual purchaser of Number 79-81 from Rasko was Aharon. The only corporate entity that had been mentioned at the relevant time was U & G Properties (and that was in the circumstances set out at [23] above). Again, these facts are consistent with the conclusion that the identity of the borrower was Ms Sher personally and she was directing where the funds would go. (In this respect, I observe that it is not correct, as Ms Sher submitted in writing, that the second loan was “paid to a Company account” associated with her.)
In sum, to the extent the path that the loan monies took has any relevance at all, the matters set out at [122]-[127] above, support a conclusion that Ms Sher was the borrower.
“The repayments made to the Plaintiff in January 2022 — $50,000 on 11 January and $200,000 on 12 January — were made from the Aharon Investments account, and were generated by the refinancing of the Company property at 77 Old South Head Road. A lender repaid from company funds, by a company refinance, was lending to the company.”
Ms Sher submits in a similar vein that the fact that the funds for repayment came from a company account is conduct objectively consistent with a company repaying its own borrowing and is a further indicator that the borrower was “the Companies”. Again, a telling difficulty in this respect is that Ms Sher does not identify which company associated with her was said to be the borrower and instead resorts to the compendious term “the Companies” when seeking to describe the borrower.
In any event, I address the submission.
As set out at [59]-[60] above, on 11-13 January 2022 repayments totalling $250,000 were made to Mr Eliopoulos. The evidence is not clear as to the bank account from which those repayments were paid. There were no bank records for Aharon in evidence, however Ms Sher had identified this bank account as the source of the repayments in her affidavit evidence and counsel for Mr Eliopoulos did not put a contrary position to her in cross-examination.
Thus, while I accept that the repayments came from an Aharon bank account, in my view that would, at most, be a neutral factor in terms of identifying the borrower under the loans. Ms Sher did not tell Mr Eliopoulos (nor was he otherwise aware) which company was proposed to purchase a particular property in relation to which she was proposing to deploy loan monies (see [80] above). Aharon was not mentioned during any loan discussions with Mr Eliopoulos. Nor did Mr Eliopoulos pay any of the loan monies to Aharon.
Moreover, Ms Sher does not address the fact that the monies for the first loan were advanced to U & G Properties but a different entity, Aharon, was the purchaser of Number 79-81 and it was Aharon that repaid loan monies. Further, there was no evidence of an arrangement between U & G Properties and Aharon regarding flows of monies between them.
I also note the narrations for the repayments that appeared on Mr Eliopoulos’ bank account statement (set out at [59]-[60] above). In short, they contained words to the effect of “SHER HALINA GILL, Loan Eliopoulos”. Given Ms Sher was the sole director and shareholder of Aharon, I draw the inference that she was the author of that narration. Ms Sher submits that these narrations are equivocal. I do not agree.
The fact that Ms Sher ultimately chose the bank account of a particular entity, Aharon, to repay part of the loan monies (being monies that had been paid to other entities) – and then appears to have nominated herself as the borrower in the accompanying narrations – are facts consistent with the conclusion that the loans were made to Ms Sher personally.
“Before repayment, the Defendant provided the Plaintiff with a letter of offer from Merricks Capital to refinance the Companies for $30,500,000, and advised that a PEXA workspace had been established for the refinance of 77 Old South Head Road in order to repay the advances. The source of repayment was, to the Plaintiffs knowledge, the Companies’ refinancing.”
In my view, this matter is not relevant to the analysis because Ms Sher did not tell Mr Eliopoulos (nor was he otherwise aware) which company was proposed to purchase a particular property in relation to which she was proposing to deploy loan monies or that a particular company would pay it back (see [80] above).
The gist of Ms Sher’s submission is that Mr Eliopoulos knew that she was in the process of organising a refinancing of her companies – presumably as evidenced, inter alia, by the Letter of Offer addressed to two of her companies – and that when this came through, it would provide funds to allow the repayment of the loans to Mr Eliopoulos. As set out at [109] above, Mr Eliopoulos denies that this was the context in which she sent him the Letter of Offer.
Even if Mr Eliopoulos knew that Ms Sher intended to eventually repay the loans from “the Companies’ refinancing” that would make no difference for the reasons set out at [110]-[111] above. Thus, to the extent this evidence could have any relevance at all, in my view it supports a conclusion that Ms Sher was the borrower (or is, at most, neutral to the question of the identity of the borrower).
“Over an extended period the Plaintiff threatened, and took steps, to wind up the Companies to recover the monies. For example, messages in late 2022 and early 2023 stating he had ‘started the process to wind up the company,’ that a ‘winding up application’ would be lodged, and that he had paid a barrister to wind the Company up. A creditor who seeks to recover a debt by winding up the borrower company treats the company as the debtor. This conduct is consistent only with the Companies being the borrower.”
Mr Eliopoulos made a number of statements in text messages sent to Ms Sher in late November 2022 through to 17 January 2023, as part of trying to obtain repayment of the loans, that he would “wind up your company” or words to that effect, including that he had draft documents “ready to go”. Ms Sher relies on this to assert that Mr Eliopoulos understood that a company associated with her, not her personally, was the borrower under the loans. She asserts that Mr Eliopoulos continued with these “winding up” threats until he realised that the companies were in administration, whereupon there was no point in pursuing them, and so then switched to asserting that Ms Sher was personally the borrower.
I reject these submissions.
First, Mr Eliopoulos did not commence such winding up proceedings or any other type of enforcement action against any corporate entity. The only enforcement action he took was to bring these proceedings naming Ms Sher as the borrower. I reject Ms Sher’s submission that the reason why Mr Eliopoulos commenced proceedings against her, rather than one of her companies, was that he was made aware that they had gone into administration. The evidence before the Court is contrary to such a finding.
In any event, the “winding up” texts were sent as part of the broader context in late 2022 and early 2023 whereby Mr Eliopoulos and Ms Sher were negotiating an extension of time to repay the loans and Mr Eliopoulos was very concerned about being repaid, given the delays. In my view, the text messages are consistent with Mr Eliopoulos seeking to apply pressure in order to achieve repayment of the loans (and are not an expression of an understanding on his part that a corporate entity was the borrower). This conclusion is supported by the matters at [146]-[149] below.
Second, Mr Eliopoulos emailed a Deed of Acknowledgement of Loan (Deed) to Ms Sher on 11 January 2023 (being the period during which he was also sending the “winding up” messages) in which he named her personally as the borrower. Plainly enough, the form of the Deed of Acknowledgement of Loan reflected Mr Eliopoulos’ position that Ms Sher was the borrower. Ms Sher submits that the drafting of the Deed merely reflects Mr Eliopoulos’ own drafting rather than representing any type of contemporaneous document in which she acknowledged that she personally was the borrower under the loans.
I reject that submission. The Deed was created in the following context. Mr Eliopoulos and Ms Sher were discussing repayment of the two loans in January 2023. Ms Sher indicated that she was negotiating a new loan with a financier Carmichael Partners (which loan would be used to pay out the loans to Mr Eliopoulos) and that Carmichael Partners’ lawyers had requested a “formal loan agreement” documenting the loan from Mr Eliopoulos.
In response, Mr Eliopoulos drafted the Deed in which Ms Sher was named personally as the borrower. At the time, Ms Sher stated in a text message to Mr Eliopoulos that Carmichael Partners needed a document that “justifies why they paid you”. It is correct, as Ms Sher submits, that there is no evidence that either party executed the Deed. However, after Mr Eliopoulos sent the Deed to Ms Sher, she “forwarded it” to Carmichael Partners’ lawyers. Mr Eliopoulos then texted Ms Sher saying “[a]ny response?” to which she responded “[a]ll good. It was accepted”.
In my view, the terms of the Deed cannot be downplayed by merely characterising them, as Ms Sher does, as reflecting Mr Eliopoulos’ drafting and not a type of acknowledgement by her as to the true borrower. Ms Sher responded to receipt of that Deed by forwarding it to external lawyers knowing it would be relied upon. As such, I conclude that this is post-contractual conduct consistent with Ms Sher being the borrower. On any view, this conduct would outweigh Mr Eliopoulos’ conduct in the same period where he was making the “winding up” threats in relation to corporate entities associated with her.
Mr Eliopoulos points to other aspects of post-contractual conduct as supporting his case.
First, over the 12 or so months after the loans were made, he and Ms Sher exchanged numerous text messages about the amounts that had been loaned and in none of those text messages was either Aharon or U & G Properties referred to (nor was there any suggestion from Ms Sher that a corporate entity was the borrower under the loans). I accept that this evidence is consistent with a conclusion that Ms Sher was the borrower.
Second, Mr Eliopoulos points to the fact that Ms Sher gave a signed witness statement to police on 17 August 2023 (in relation to her allegations to police that Mr Eliopoulos had been sending her harassing text messages). At the beginning of the witness statement Ms Sher stated as follows:
“This statement made by me accurately sets out the evidence that I would be prepared, if necessary, to give in court as a witness. The statement is true to the best of my knowledge and belief and I make it knowing that, if it is tendered in evidence, I will be liable to prosecution if I have wilfully stated in it anything that I know to be false, or do not believe to be true.”
In the police witness statement, Ms Sher stated that the context for the harassment was that “[Mr Eliopoulos] lent me a large amount of money” which she had not fully repaid. She also asserted that “… I am unable to pay the funds back” but “… I fully intend to repay him once my affairs are in order”.
Ms Sher submits that the police witness statement involved her making a “distressed complaint” about Mr Eliopoulos’ harassing conduct (to which he later pleaded guilty) and was not a “considered account of liability”. She submits that it reflects her habit of speaking personally about the companies’ affairs as sole director.
I do not accept that the import of the witness statement can be downplayed in this way. The witness statement was a solemn evidentiary statement to police that is consistent with the conclusion that she personally was the borrower under the loans.
Third*,* Mr Eliopoulos refers to the fact that it is apparent from court documents that Ms Sher had given instructions to receivers (that had been appointed to Aharon or U & G Properties) in respect of reports issued in March 2023 and March 2024, but in doing so had not referred to any debts that one or more of those companies owed Mr Eliopoulos. I would place limited weight on this evidence given the lack of clarity in the evidence as to when instructions were given and to whom. However, on any view, this matter is not inconsistent with the conclusion that the loans were to Ms Sher personally.
As set out at [114] above, I reached the conclusion that, looking at the position objectively, the borrower under each of the loans was Ms Sher without having regard to the post-contractual conduct. However, for the reasons set out above, when regard is had to the post-contractual conduct, it leads to the same outcome.
Mr Eliopoulos has, by his written submissions, disavowed seeking additional amounts of interest that he had alleged he was owed and only seeks the lesser amount of $795,000 plus pre-judgment interest running from the date of 20 January 2023 (see [65] above).
Based on my findings above, I accept that Mr Eliopoulos is owed the amount he seeks, being $795,000 (see in particular, [13], [24]-[29], [39]-[40], [48], [51]-[54], [65] above). Contrary to Ms Sher’s submission, credit does not “fall to be given for the sums already repaid” in respect of the $795,000 figure. As identified at [63] above, the $795,000 figure reflects the fact that a repayment of $250,000 has already occurred.
In my view, Mr Eliopoulos is also entitled pursuant to s 100 of the Civil Procedure Act 2005 (NSW) to pre-judgment interest commencing on the date he has nominated, being 20 January 2023 to the date of this judgment, which is an amount of $227,148.92.
There is no reason why an order in accordance with the ordinary rule that costs follow the event ought not be made in this matter.
Thus, I make the following orders:
Judgment for the plaintiff against the defendant in the sum of $1,022,148.92 inclusive of pre-judgment interest from 20 January 2023 to 18 August 2026 pursuant to s 100 of the Civil Procedure Act 2005 (NSW) in the amount of $227,148.92.
The defendant is to pay the plaintiff’s costs of the proceedings as agreed or assessed. In the event that either party wishes to be heard further on the question of costs, grant leave to apply within 7 days in that respect.
Eliopoulos
Sher
(2009) 77 NSWLR 299
(2019) 100 NSWLR 367
(2001) 53 NSWLR 153
(2007) 69 NSWLR 603