Fisk v Joyner trading as Magnormos (Civil Claims) [2015] VCAT 1187

**1. The Tribunal orders that the respondent must now pay the applicants the sum of $10,000.00.

2. Under s115B(1) of the Victorian Civil and Administrative Tribunal Act 1998 the Tribunal orders the respondent to reimburse the following fee to the applicants: the application fee paid by the applicants of $525.60.

3. Oral reasons provided at conclusion of evidence.

4. Respondent's request to provide written reasons noted.**

1. This is a claim by Margaret and Terry Fisk ("the applicants") for repayment of an amount of $10,000.00 provided to Aaron James Joyner trading as Magnormos ("the respondent").
2. At the conclusion of the hearing, the respondent requested that I provide written reasons for the oral decision that I had given at the conclusion of the evidence.
3. It was not disputed that the applicants had provided to the respondent a total of $10,000.00 by two payments of $5,000.00 made in or about April and May 2011.
4. At and about the time of the payment, the applicant, Margaret Fisk, and the respondent were engaged in theatre productions.
5. On 24 January 2015, Margaret Fisk sent an email to the respondent stating as follows:

My Mum and Dad have gotten themselves into a little bit of trouble financially and all the kids (my sister and brother and myself) are all pitching in to help them out.

We have talked on and off (even some months ago) about you paying me back the $10,000 I loaned you for The Hatpin back in 2011 From your email in 2011, it was said that the money would be re-paid after the show was finished. I did expect to get back the money then given the show went into profit. However, as we were very busy with the other shows, I figured that you would get around to re-paying me, especially after receiving Flowerchildren royalties.

It now has been nearly 4 years and I would like the loan to be re-paid in full as soon as possible and have attached an invoice with payment details.

The email dated 24 February 2015 in reply from the respondent to Margaret Fisk included the following:

Once these immediate matters are settled, and I am able to appease the investors of your complicit response to these concerns, I will be happy to discuss other correspondence regarding your investment in The Hatpin.

1. The applicants asserted that the $10,000.00 was a loan and recoverable from the respondent under the Australia Consumer Law and Fair Trading Act 2012 (ACL&Fair Trading Act).
2. While acknowledging receipt of $10,000.00 from the applicants, the respondent asserted that the money was an investment in a production called "The Hatpin" and not a loan. "The Hatpin" was "technically a loss".
3. The ACL&Fair Trading Act permits the recovery of a loan whether or not that loan is made in trade or commerce:

COMPETITION AND CONSUMER ACT 2010 - SCHEDULE 2

(a) any rights (including rights in relation to, and interests in, real or personal property), benefits, privileges or facilities that are, or are to be, provided, granted or conferred in trade or commerce; and

(b) without limiting paragraph (a), the rights, benefits, privileges or facilities that are, or are to be, provided, granted or conferred under:

(vi) any contract for or in relation to the lending of money.

1. In support of their contention that the $10,000.00 was a loan, the applicants provided the following evidence:

1. Emails between the parties - * 27 March 2011 "I seek no return on my investment other than the initial $10,000". * 28 March 2011 "I will put this money into a separate account linked to the Magnormos account so that it can be reserved only for The Hatpin expenses, and also will have a track of exactly how it will be spent". * 6 May 2011 "Thank you for the $5k deposit, I am going to keep it in the savings account and only use if necessary". * 4 April 2013 "I also syphon portions across to the savings account, which I'm building up to pay back you and Peter before the end of this year (that's my goal)". 2. If the applicants had been investors in the production "The Hatpin", ASIC regulations required that the respondent should have issued an unsecured cover note. The money should have been placed in an identified account for "The Hatpin" and the money tracked. "The Hatpin" was in profit without recourse to the $10,000.00 and the money should have been retained.

1. Margaret Fisk gave evidence that her intention was that the $10,000.00 be an interest-free loan and it was given and accepted on that basis. She had not agreed to the loan being transferred to a subsequent production. The respondent had made money from the shows. She had been required to wait for repayment as they had been friends.

1. "The Hatpin" was supported by the City of Port Phillip and therefore an Acquittal Report was required. The budget report made no reference to an investment of $10,000.00.
2. In support of his contention that the $10,000.00 had been an investment, the respondent provided the following evidence:

1. Margaret Fisk had been involved with "The Hatpin" as stage manager. She and her husband invested in the show and she was elevated to "producer". 2. "The Hatpin" had made a profit of $64-$68 only. The investment of $10,000.00 went into the next production of "Hello Dolly" with the agreement of Margaret Fisk. Margaret Fisk as producer had been involved in executive meetings and was aware of the expenses. "Hello Dolly" went into serious loss.

1. In 2013 the parties had done a production of "Flower Children" together and had fallen into dispute. This was why the applicants now asserted that the money was a loan and demanded it back.

1. In 2011, the respondent was not aware of the ASIC requirements but had learned a lot since.
2. Where the evidence of the parties differed, I preferred that of the applicants. Their evidence was supported by the emails between the parties.
3. On all of the evidence, I was satisfied that the applicants had established that the payment of $10,000.00 to the respondent was made and accepted as a loan. The applicants were entitled to demand repayment of the loan. No part of the loan had been repaid by the respondent. The order was made for payment to the applicants of $10,000.00 and reimbursement of the VCAT application fee of $525.60.