Fitzpatrick v Marshall

(ii) The supplementary credit card

1. By 2000 Ms Marshall was living in Port Macquarie. The parties reconciled. Late in 2002 Ms Marshall requested some financial assistance in order to establish a labour hire business. Mrs Fitzpatrick agreed so long as Alistair Fitzpatrick, the son of Mr and Mrs Fitzpatrick, became an equal owner of the business. The business, All States Labour Service, was owned by Priduct Pty Ltd ("Priduct"), a company jointly owned equally by Ms Marshall and Alistair Fitzpatrick. Ms Marshall was responsible for the day to day operations of the business. Financial assistance was provided principally by Ms Marshall receiving a supplementary credit card on Mrs Fitzpatrick's Virgin credit card account. Mrs Fitzpatrick gave evidence of a conversation in the following terms: "A few days later, my daughter rang me and said: 'I can't get a credit card in my name or in the business name. Can I use a sub-account of your credit card until the company has a credit rating? If there are interest charges or other fees they will be business expenses.' I said: 'It has to be paid off quickly because I don't want to pay interest and I need a weekly financial report otherwise I will worry.'" Although this conversation was not admitted by Ms Marshall, it was not disputed that she obtained and used a supplementary credit card and was responsible for promptly repaying any charges she made to the card. Ms Marshall used the supplementary card to pay for expenses and made payments to the credit of the card balance.

(iii) Discharging the mortgage on Toowong

1. In August 2004 Ms Marshall received some funds as a result of a divorce settlement and used these funds, about $57,000, to repay the balance of the bank loan and discharge the mortgage on the Toowong property. Ms Marshall gave evidence that the Certificate of Title, in the name of Mr and Mrs Fitzpatrick, was provided to her, a matter apparently not disputed by Mr and Mrs Fitzpatrick.

(b) The conversations concerning the agreement

1. In August 2005 Ms Marshall wanted to buy a safer car. Mrs Fitzpatrick gave evidence that Ms Marshall said, "As my divorce settlement is in Toowong, I don't have any money to buy a car," that "the company can afford the repayments" and that: "The Accountant recommends ING…I will need to use Toowong as security for the loan…All State will pay the interest and fees and it will be a tax deduction for business costs and I will pay off the loan each week…as the title of the property is in your names then the Loan Account will need to be in your names…Rather than use a credit card…it is cheaper to get a larger loan now to cover all eventualities…You have my guarantee I won't take any risks…and the Loan will be accounted for in the business as a shareholder's loan in my name."
2. Mrs Fitzpatrick gave evidence that she said: "I agree to the Loan being secured on the property on the condition that it is of no expense to us…The interest and fees are paid for by your company and the Loan is to be accounted for in Priduct Pty Ltd records under a shareholder loan for Deborah Marshall," and Ms Marshall agreed.
3. Ms Marshall's recollection of this decade old conversation is different but the differences are not material to the present dispute. Ms Marshall recalled Mrs Fitzpatrick referring to the Toowong house as "your house" and "your place", and saying to her: "I have been in touch with ING and we can take out a line of credit with them…the business can use the line of credit. You will have to pay back the money it borrows plus the interest on it," to which Ms Marshall agreed.
4. It might be doubted whether either account is a reliable record of what was actually said. The parties are both seeking to reconstruct a conversation, or conversations, that occurred ten years earlier, and caution must be exercised in relying too heavily on the words now recalled: see, e.g. Watson v Foxman (1995) 49 NSWLR 315 at 318-319; Gestmin SGPS SA v Credit Suisse (UK) Ltd [2013] EWHC 3560 (Comm) at [22].

(c) The obligations

1. Nevertheless, the versions of the conversation or conversations about obtaining the line of credit have common features: funds were to be provided to Ms Marshall and she was to bear the interest costs and be responsible for repaying the principal.
2. The post-contractual conduct of the parties, whilst inadmissible to construe the words of an agreement, may give some guidance as to what was actually said: see Franklins Pty Ltd v Metcash Trading Ltd (2009) 76 NSWLR 603 at 615 [10], 616 [13]. That conduct included the withdrawal of money by cheques signed by Mr and Mrs Fitzpatrick, both for the Priduct business and for Mr and Mrs Fitzpatrick's personal expenses. Neither party suggested that Mr and Mrs Fitzpatrick had breached the agreement by using the facility on occasions for their own personal use: Mrs Fitzpatrick's affidavits do not record an agreed entitlement in Mrs Fitzpatrick to use the facility for personal expenses whereas Ms Marshall's recollection, that she (Ms Marshall) was entitled to "use the line of credit" and "pay back the money [Priduct] borrows" allows for the possibility of use of the facility also by Mr and Mrs Fitzpatrick. The facility was in the name of Mr and Mrs Fitzpatrick, and Ms Marshall made no complaint when she became aware about their personal use of it.
3. In these circumstances, I conclude that Mr and Mrs Fitzpatrick were entitled to use the facility for their own personal expenses.

(d) Use of the ING account

1. During the period of about seven years when the ING facility was in use, 41 personal cheques and one bank cheque were drawn on the account, in amounts totalling $327,329.18.
2. This use of the ING credit facility can be broadly sorted into four categories: 1. Use for the benefit of Ms Marshall or Priduct. 2. Use by Mr and Mrs Fitzpatrick for their own personal expenses. 3. Interest. 4. Credit card payments.
3. The bank cheque and six personal cheques, together totalling $214,500, were paid to, or in relation to, the business as directed by Ms Marshall (the first category). This amount included an amount of $50,000 paid as a loan to Pat Broderick, a customer of the business, which was not repaid. By the end of the trial, Ms Marshall had accepted responsibility for that loan. Also, by the end of the trial, Ms Marshall had accepted responsibility for any debts owed by Priduct to Mr and Mrs Fitzpatrick.
4. The second category of payments was five cheques, totalling $12,457.05, which were conceded by Mr and Mrs Fitzpatrick to be in respect of their personal expenses and not to be the responsibility of Ms Marshall.
5. The third category of payments involved five cheques, totalling $7,469, in 2011 and 2012 which were written out in the final months of the facility to pay the interest on the facility. Ms Marshall and I think Mr and Mrs Fitzpatrick, accepted that responsibility for that amount should reflect the responsibility each party bore for the principal amount owing at the time the interest accrued.
6. The final and contentious category of cheques comprised 25 cheques totalling $92,909.13. These were cheques paid into the various credit card accounts of Mr and Mrs Fitzpatrick. Most of this amount ($50,707.18) was paid into Mr Fitzpatrick's Virgin credit card account. A substantial amount ($20,261.86) was paid into Mrs Fitzpatrick's Virgin credit card account, the account to which the supplementary card possessed by Ms Marshall was attached. In addition, $6,064 was paid to Mr Fitzpatrick's HMC card, $6,510.69 to Mrs Fitzpatrick's St George card, $4,876.79 to Mrs Fitzpatrick's Members Equity card and $4,488.61 was attributed by the plaintiffs to "Keith or Maree's Virgin credit card" but no such amount appeared on the relevant statements of either card.
7. In respect of these payments, Ms Marshall accepted responsibility for one expense in the amount of $906.82 on Mr Fitzpatrick's HMC credit card. For ease of reference, the phrase "the credit card payments" will be used to refer to the contentious drawdowns from the ING account remaining in dispute, totalling $92,002.31 ($92,909.13 - $906.82).
8. In respect of Mrs Fitzpatrick's Virgin credit card, Ms Marshall asserted that she had paid in full for all of her use of that credit card. In respect of the other payments to the other credit cards, Ms Marshall asserted that she had no use of those cards and none of those expenses (including the amount of $4,488.61 referred to in [17] above, which did not appear on any credit card statement) were her responsibility.
9. Mr and Mrs Fitzpatrick sought to meet this argument with three submissions advanced with varying degrees of vigour.
10. First, Mr and Mrs Fitzpatrick submitted that Ms Marshall had initially agreed to meet all the debits on the ING facility including the credit card payments (irrespective of the nature of those debits).
11. Secondly, they submitted that Ms Marshall had accepted responsibility for particular credit card payments at the time they were made by directing cheques to be paid to the credit card accounts as a means of discharging, in rough terms, the amounts she likely owed on the credit cards.
12. Thirdly, they submitted that the credit card payments were to reimburse them for expenses incurred by Ms Marshall on their credit cards.
13. None of these submissions have merit.

(i) The alleged agreement that Ms Marshall meet all debits on the ING facility

1. In County Securities Pty Limited v Challenger Group Holdings Pty Limited & Anor [2008] NSWCA 193, Spigelman CJ at [40] stated: "whilst the law must acknowledge the possibility of parties making commercially bad bargains, nothing in the nature of the transaction or the conversations or the documentation suggests that any such conclusion is open on the facts of this case. In my opinion, where the court is not constrained in any way by a verbal formulation, it should be very slow to find that a contract was as obviously uncommercial as this one would be on the respondent's case."
2. Absent any rewards, an agreement to pay another's expenses, unlimited by amount, type or date, is plainly uncommercial. Mr and Mrs Fitzpatrick accepted that the agreement alleged by them to exist between them and Ms Marshall was uncommercial, but submitted that with a family arrangement this is unsurprising.
3. The family arrangement submitted by Ms Marshall - which required the respective adult parties to be responsible for their own debits - was not uncommercial.
4. While family arrangements sometimes might include aspects of gratuitous assistance that might be regarded as uncommercial, the circumstance that Ms Marshall was the impecunious daughter receiving assistance militates against an agreement that she would be responsible for debits arising from her mother's and stepfather's personal expenditure. Mr and Mrs Fitzpatrick did not suggest that this was the price of Ms Marshall receiving their assistance.
5. That such an agreement would be uncommercial is not the strongest factor against its likelihood. Rather, it is the absence of any evidence to support it. The central features of the agreement - that Ms Marshall could use the supplementary Virgin credit card and funds from the ING facility and would be responsible for repaying all the debts arising from her use of that credit card and the ING facility - were the subject of express and clear oral evidence, acted upon by the parties and were not in contest. These features of the agreement provide no support for the term alleged by Mr and Mrs Fitzpatrick that Ms Marshall would be responsible for debits on the ING facility arising from their personal expenditure.
6. None of the affidavits of Mr and Mrs Fitzpatrick detail any conversation involving Ms Marshall also being responsible for their personal expenses. There is evidence that Ms Marshall would pay back "the loan", but in a context where the ING facility (on Mr and Mrs Fitzpatrick's evidence) was for Ms Marshall's business including her car, any assurance of repayment cannot be understood as extending to debits for personal expenditure by Mr and Mrs Fitzpatrick.
7. Further, Mr and Mrs Fitzpatrick made no reference to their personal expenses in either of their initial affidavits. And in the verified statement of claim at paragraph 7, they assert that the ING drawdowns, including the credit card payments, "were drawn down and paid to or for the benefit of the defendant".
8. In a third affidavit, Mrs Fitzpatrick repeated this assertion. She also referred to the credit cards and conceded that she "occasionally used these cards for the personal expenses of Keith and myself" but that "the vast majority of expenses itemised on our credit card statements were Deborah's personal expenses or her business expenses" and that "Deborah told me to write ING cheques in particular amounts and to make payments on our credit cards to cover her business and personal expenses" (emphasis added). In that affidavit, a schedule of ING payments records all the payments to the credit cards as being "for expenses of Deborah and Priduct".
9. None of this evidence supports an agreement between the parties that Ms Marshall would be responsible for the personal expenses of Mr and Mrs Fitzpatrick.
10. Finally, if Mr and Mrs Fitzpatrick were the beneficiaries of such an agreement, there is no reason for them to concede that the five cheques, totalling $12,457.05, for personal expenses referred to in [15] above remained their responsibility. At trial they submitted that this concession was to save time at the trial, but there was no evidence of that purpose. The concession was made, at least in part, in an affidavit of Mrs Fitzpatrick sworn on 2 September 2014, when time at trial could not have been a consideration. In any event, the concession did not save any time, since it served only to complicate the alleged agreement: it now became that Ms Marshall had agreed to be responsible for most of the personal expenses of Mr and Mrs Fitzpatrick debited to the ING facility.
11. Accordingly, in my view it was not part of the agreement that Ms Marshall would meet personal expenses of Mr and Mrs Fitzpatrick which were debited to the ING facility.

(ii) Alternative submission - an alleged agreement in respect of each payment

1. Mr and Mrs Fitzpatrick alternatively submitted that Ms Marshall had agreed to be responsible for these drawdowns to make the credit card payments at the time they occurred. Again, such an agreement is uncommercial and there is no evidence to support it. Nor is there evidence to support that the drawdowns were a result of instructions from Ms Marshall.
2. Mr and Mrs Fitzpatrick again relied upon the sentence in Mrs Fitzpatrick's affidavit, quoted above, which I admitted over objection: "I recall that Deborah told me to write ING cheques in particular amounts and to make payments on our credit cards to cover her business and personal expenses."
3. The form of this evidence renders it of little value. It does not specify when the conversation occurred, or if it occurred on multiple occasions. The first part of the sentence is uncontentious. The meaning of the second part (from "to make payments") is unclear: if it means that Ms Marshall asked Mrs Fitzpatrick to cover certain business and personal expenses of Ms Marshall, it is also largely uncontentious as both the supplementary credit card and the ING account were used for that purpose.
4. But "payments on our credit cards" could also refer to the deposit of funds into a credit card account. Even if I were to "erect a high tower of implication on the slight foundation of…brief expression" (see Goldmaster Homes P/L & Anor v Johnson & Ors [2004] NSWCA 144 at [22]) and construe this phrase as indicating repeated directions by Ms Marshall to Mr or Mrs Fitzpatrick to write ING cheques to make deposits into their various credit card accounts, still the deposits (on Mrs Fitzpatrick's evidence) were for Ms Marshall's "business and personal expenses" not the personal expenses of Mr and Mrs Fitzpatrick. Relevantly, at the same time, Ms Marshall was making payments to her mother's Virgin credit card account to cover her business and personal use of the supplementary card.
5. Nor do the credit card payments, by their timing and amounts, suggest express directions by Ms Marshall in particular amounts. Rather, the credit card payments fall into two categories: specific amounts drawn and deposited into various credit card accounts to pay off the outstanding balances of those credit cards, mostly soon after the ING facility was obtained; and regular, periodic (usually monthly) cheques drawn in round numbers (e.g. $1,000, $3,000) and deposited into credit card accounts.
6. There is no obvious consideration flowing from Mr and Mrs Fitzpatrick for these payments. Perhaps it was this that caused Mr and Mrs Fitzpatrick to assert an estoppel, or waiver, or acquiescence by Ms Marshall. Mr and Mrs Fitzpatrick referred to Rodger v De Gelder & Anor [2011] NSWCA 97 at [81]-[82]. That passage does not assist them. Here there was no unequivocal conduct by Ms Marshall, no rights which Ms Marshall refrained from exercising, and no relevant detriment was suffered by Mr and Mrs Fitzpatrick. Mr and Mrs Fitzpatrick argued that they suffered detriment in foregoing the timely opportunity to gather records to establish that the credit card payments were for Ms Marshall's expenses. The truth of that matter - whether the credit card payments were for Ms Marshall's expenses - is dealt with as part of the third submission. But a difficulty in marshalling evidence does not establish detriment or justify a submission that Ms Marshall was obliged to meet Mr and Mrs Fitzpatrick's expenses: an inability to prove detriment is not equivalent to establishing detriment. In any event, there was no evidence to support any action or inaction by Mr and Mrs Fitzpatrick in reliance on the conduct of Ms Marshall: there was no evidence attributing the absence of any bank statements or other documents to Ms Marshall's conduct.
7. Further, no estoppel, waiver or acquiescence was pleaded by Mr and Mrs Fitzpatrick, nor was leave sought to file a reply to plead such a case. And as Ms Marshall has lost the opportunity to establish that no detriment (even in the sense used by Mr and Mrs Fitzpatrick) was suffered, by Ms Marshall obtaining production of documents, leave to Mr and Mrs Fitzpatrick to file a reply during the hearing would not have been granted. In the absence of a case in estoppel or waiver being pleaded, this submission cannot be maintained.
8. Accordingly, even accepting Mrs Fitzpatrick's evidence, there is no basis to conclude that there was an agreement, whether generally or in respect of particular expenses, that Ms Marshall directed ING cheques to be paid to cover Mr and Mrs Fitzpatrick's personal expenses.
9. Mr and Mrs Fitzpatrick also relied upon the circumstance that Ms Marshall paid without complaint the interest on the ING account, even when she knew or suspected that the debit balance included expenses additional to her business and personal expenses.
10. In my view, Ms Marshall's conduct in paying the interest is not unequivocal conduct indicating an acceptance of the whole ING liability. She owed then, and concedes that she owes even now, some monies to Mr and Mrs Fitzpatrick. In that event, paying additional interest, the interest on her parents' expenses, operates to reduce her debt to them. As indicated earlier, she was not "refrain[ing] from exercising rights" (see Rodger v De Gelder & Anor [2011] NSWCA 97 at [82]). At all times the only relevant rights to sue were those possessed by Mr and Mrs Fitzpatrick because Ms Marshall was indebted to them.

(iii) The third argument - were additional credit card expenses incurred by Ms Marshall?

1. This argument implicitly accepts the proposition that the parties are liable for the ING payments into the credit card accounts to the extent that they have incurred the expenses on those cards. Ms Marshall did not contest this proposition. This replicates the only outstanding component of the second primary issue: who incurred the expenses on the credit cards (or for whose benefit were those expenses incurred) which were met by the credit card payments from the ING facility.

(a) The credit cards - general considerations

1. There are a number of general considerations that point against Ms Marshall being indebted to Mr and Mrs Fitzpatrick for expenses on their credit cards.
2. First, on a number of occasions Mrs Fitzpatrick created documents purporting to state Ms Marshall's debt to her, but Mrs Fitzpatrick's list of expenses in those documents did not include the credit card payments. In November 2010 she provided Ms Marshall with a list of payments (some of which were said to have been reimbursed) which did not include the credit card payments. In 2012, in related proceedings in the District Court of Queensland, Mr and Mrs Fitzpatrick were ordered to serve: "a list of the documents in their possession or power evidencing any loan of monies alleged by them to have been made to (Ms Marshall) and to be still owing by her to them," and the same list of payments was provided, again omitting any reference to the credit card payments. And in a claim in the liquidation of Priduct in late 2012 or early 2013, Mrs Fitzpatrick sought an amount of "up to 214,500" for a "series of advances of funds to [Priduct] from an ING Direct bank account". The amount of $214,500 is the exact total of the first category of payments from the ING account directed by Ms Marshall (see [14] above), and does not include the credit card payments.
3. These written claims were made closer in time to the relevant events, and thus, are more likely to be accurate than Mrs Fitzpatrick's recent assertions in these proceedings. Mrs Fitzpatrick did not assert that these documented claims referred to the debt owed to her by Priduct, not Ms Marshall, nor could she. Contrary to her claim in the liquidation, she asserted in these proceedings that Ms Marshall, and not Priduct, was liable for all the monies owed to her.
4. Secondly, Mrs Fitzpatrick claimed in the District Court of Queensland in 2012 that she was owed $57,000 by Ms Marshall in 2004, and that the payment of $57,000 by Ms Marshall in August 2004 was a repayment of that debt. If this was actually believed by Mrs Fitzpatrick, she could not, acting honestly, have used the ING facility from 2005 to 2010 to pay off debts on the credit cards existing prior to August 2004, since she believed any such debts had been repaid. The fact that the District Court of Queensland rejected her assertion about a $57,000 debt offers no explanation for why, prior to that decision, Mrs Fitzpatrick sought to use the ING facility to repay debts which she believed already to have been repaid. Notwithstanding this difficulty, Mrs Fitzpatrick in submissions retreated to the position that the credit card payments were in respect of debts existing since 2002.
5. Thirdly, in respect of all but one of the credit card accounts, Ms Marshall did not possess a credit card accessing those accounts. Mrs Fitzpatrick asserted, (a matter denied by Ms Marshall) that "Deborah knew the card number, expiry dates and names on our credit cards" but Mrs Fitzpatrick gave no admissible evidence of how that knowledge was gained or used in respect of any particular transaction. That Ms Marshall incurred expenses on and made payments to Mrs Fitzpatrick's Virgin credit card account, by means of the supplementary card, does not establish any knowledge of the other credit card accounts. There was also no evidence that Ms Marshall knew the three or four digit card verification number in respect of any of the credit cards she did not possess. How the $906.82 expense of Ms Marshall or Priduct (referred to above at [18]) came to be on Mr Fitzpatrick's HMC credit card (and whether that involved conduct by Mr or Mrs Fitzpatrick) was not explored at the hearing.
6. Fourthly, Ms Marshall made payments to the credit of Mrs Fitzpatrick's Virgin credit card exceeding $129,000 during the relevant period. This indicates that she had a ready means of paying off her debts on the credit cards. She gave evidence that she was regularly asked to make payments to Mrs Fitzpatrick's Virgin credit card account attached to her supplementary card, and she did so. This evidence was not challenged and is supported by the documents showing her payments. I accept that these requests occurred. It seems unlikely that Ms Marshall would, at the same time as she is making credit card payments at the request of her mother, direct her mother to write out ING cheques in specific amounts and deposit them into the same account. It is even less likely that she would do so in respect of the other accounts for which she had no supplementary card.
7. Fifthly, the level of disputed charges on the credit cards is less than the credit card payments from the ING facility, so that even if all the disputed charges are the responsibility of Ms Marshall, not all of the credit card payments can be attributed to Ms Marshall's expenses.
8. Finally, on the issue of the credit card payments, I found Mrs Fitzpatrick's performance in the witness box unsatisfactory in a number of respects. She gave evidence by affidavit concerning personal expenses on Mr Fitzpatrick's Virgin credit card, but accepted in cross-examination that she had not reviewed his card.
9. Mrs Fitzpatrick gave evidence in respect of the first five of the credit card payments: "Once the ING facility was established, among the first payments made from the facility were cheques drawn in repayment of our credit card balances. We did this because we wished to take advantage of the lower interest rate offered by ING. As soon as we had access to the ING funds (on or about 28 November 2005) we drew ING cheques to pay off the amounts owing on each of the cards".
10. This evidence makes no reference to any direction by Ms Marshall to pay those amounts. There reference to "we" must be read as a reference to Mr and Mrs Fitzpatrick because of an earlier reference in the paragraph to "Keith and myself".
11. Mrs Fitzpatrick's explanations in respect of particular expenses were also unsatisfactory, as is considered below.
12. Ms Marshall gave her evidence in a straightforward manner, and made concessions about her responsibility for a loan to Pat Broderick and for Priduct's liability to Mr and Mrs Fitzpatrick. Her evidence was supported by documents and I am of the view that she was largely an honest and reliable witness and that her evidence should be accepted. An attack was made on her credit based upon a statement she had written to her accountant that all ING drawdowns were for the benefit of Priduct. That statement was not true as Mr and Mrs Fitzpatrick's conceded payments of their personal expenses establish. Ms Marshall's statement to the accountant may, if not honestly mistaken, reflect an attempt to secure some perceived financial or taxation advantage, perhaps improperly. It may have been reckless of her, or it may reflect her ignorance of the true position at that stage. I do not reach a final view on that matter, because her statement to her accountant some years ago is of limited assistance in assessing her evidence on oath before this Court. It does not cause me to reject her evidence about her version of the alleged agreement or her expenses.
13. The credit of Ms Marshall was also challenged on the basis that she stated a number of different figures as to the amount she owed Mr and Mrs Fitzpatrick. These figures ranged from about $6,000 to $50,000. As estimates, these figures are within a confined range, and the ultimate debt I have found to be within that range. I do not accept that her credit is adversely affected by those statements regarding her level of debt to Mr and Mrs Fitzpatrick.
14. These general considerations would cause me to conclude that payments from the ING facility made by Mr and Mrs Fitzpatrick to their own credit cards were unlikely to be payments made for the benefit of or at the direction of Ms Marshall. An examination of the particular disputed transactions on those cards only serves to confirm that unlikelihood.

(i) Maree Fitzpatrick's Virgin credit card

1. By means of her supplementary card Ms Marshall incurred expenses on this account. She conceded an amount of $80,935.76 on this card in the period 2004 to 2011 inclusive.
2. Almost all of the monthly statements for this card covering this period are in evidence. Those statements, and bank statements tendered by Ms Marshall, establish that Ms Marshall made payments of $129,693.07 towards Mrs Fitzpatrick's Virgin credit card account over that period. Accordingly, Ms Marshall has paid $48,757.31 more to the credit of this account than her conceded expenses.
3. Mrs Fitzpatrick has conceded her expenses on this account to be $31,512.80 and she has paid (excluding payments from the ING account) $15,577.52. Thus, on her own account Mrs Fitzpatrick has underpaid her expenses by at least $15,935.28.
4. The amount of disputed transactions total $51,383.04. Accordingly, if all the disputed transactions were attributable to Ms Marshall, she would have underpaid her expenses on this credit card by $2,625.73 ($51,383.04 - $48,757.31).
5. Mrs Fitzpatrick paid $20,261.86 toward this card from the ING facility, testifying in respect of each of the several payments totalling this amount: "Payment of money owing on Maree's card for expenses of Deborah and Priduct". As these payments exceed the maximum possible responsibility of Ms Marshall about eight times over, Mrs Fitzpatrick's evidence must be wrong, at least in respect of Ms Marshall's expenses on this card.
6. The position is worse for Mrs Fitzpatrick when particular transactions are examined.
7. In respect of this credit card account, the disputed charges include Optus expenses, airfares, petrol expenses, mechanical repairs and services and other charges at locations proximate to Mr and Mrs Fitzpatrick's Seaforth residence, at regular occasions throughout the year. No convincing explanation was offered as to how these charges were made by Ms Marshall, who lived at Port Macquarie and whose visits to Sydney were infrequent.
8. In a schedule sent by her solicitor to Ms Marshall's solicitor, Mrs Fitzpatrick asserted, for example, regarding disputed charges incurred at Caltex Toowong on 13 March 2005: "We did not have a car in Toowong but the defendant did so I believe this was for her purchase of petrol." This answer was called in aid by Mrs Fitzpatrick in respect of all disputed Caltex petrol station expenses, wherever incurred. In fact, Mrs Fitzpatrick had the use of a car and stayed at Toowong at the time, unlike Ms Marshall. In oral evidence, Mrs Fitzpatrick suggested that the disputed petrol expenses may have been for her use of a motor vehicle owned by Priduct but provided to her. There was evidence that the car was owned by Priduct and Priduct may have paid its annual registration fee but there was no evidence of any agreement by Ms Marshall to pay for Mrs Fitzpatrick's petrol expenses. Nor was there any reasonable basis to conclude that Mrs Fitzpatrick's use of that car was substantially related to work for Priduct.
9. In respect of the Optus charges, Mrs Fitzpatrick said in her affidavit, "So far as I am aware, Keith, only ever used pre-paid Optus mobile telephone services which we purchased for amounts in round numbers." The expenses disputed on Mr Fitzpatrick's credit card account included payments at Optus retail shops, consistent with the purchase of pre-paid services.
10. The disputed airfares include trips by Mr and Mrs Fitzpatrick to Port Macquarie to visit Ms Marshall and another trip with Qantas where the documentary evidence established Mr and Mrs Fitzpatrick to be the passengers, a matter Mrs Fitzpatrick "didn't remember". There was no evidence of any undertaking by Ms Marshall to meet those expenses.
11. Mrs Fitzpatrick attributed expenses at Myer, David Jones, Target, multiple shoe stores, health food stores, Gowings, Laura Ashley, Lincraft and multiple clothing stores and for kitchenware and souvenirs, to having been made by her, but said she posted these items to Ms Marshall at her request. There is no evidence to support any direction or agreement in respect of these purchases. I accept that some of these purchases may have resulted in goods that were provided to Ms Marshall when Mr and Mrs Fitzpatrick visited. But without evidence of the particular goods, or the particular agreement to buy them, this establishes no more than that on occasion Mrs Fitzpatrick may have purchased gifts for her daughter. I cannot find that they were expenses incurred at Ms Marshall's request or direction. Further, Mrs Fitzpatrick in oral evidence limited this practice to buying "clothes and shoes" at Myer and David Jones. There was no assertion that other types of goods were not purchased by her from these stores, and no evidence that the particular expenses on the credit cards were limited to clothing and shoes.
12. Mrs Fitzpatrick admitted buying goods from David Jones for herself during sale periods but disputed that purchases on 27 December 2004 were in that period. I think I am entitled to take judicial notice of the circumstance of Boxing Day being the commencement of the post-Christmas sales.
13. Mrs Fitzpatrick accepted that Mr Fitzpatrick had purchased paint in Manly and Stanmore but asserted that it was used on the Priduct premises in Port Macquarie, a matter which I find unlikely. The reimbursement of these purchases was also not supported by any evidence of agreement.
14. In the circumstances, I am satisfied that most of the residual disputed charges of $51,383.04 on Mrs Fitzpatrick's Virgin credit card related to her usage, at least more than the amount of $2,625.73, which would be the maximum amount Ms Marshall could still owe Mr and Mrs Fitzpatrick, given her payments to this account and Mrs Fitzpatrick's conceded expenses.

(ii) Keith Fitzpatrick's Virgin credit card

1. In respect of Mr Fitzpatrick's Virgin credit card account, there is no evidence to attribute expenses incurred on this credit card to Ms Marshall. Mrs Fitzpatrick did not review this credit card, and neither did Mr Fitzpatrick.
2. Mr Fitzpatrick is an elderly gentleman, and while he sought to give his evidence carefully, his memory appeared to be affected by his age. He accepted that he used his own car regularly until 2011, and purchased petrol locally, including possibly at Cammeray and Cremorne where petrol expenses on the credit card were apparently incurred. He could not say if any of the expenses on his credit cards were incurred by Ms Marshall. He also accepted that his son had, and used, a credit card attached to his Virgin credit card account.
3. Thus, none of the disputed expenses on Mr Fitzpatrick's Virgin credit card account can be attributed to Ms Marshall.

(iii) Maree Fitzpatrick's St George credit card

1. In respect of Mrs Fitzpatrick's St George credit card account, there is no evidence of any itemised transactions and thus, no evidence that any expenses related to Ms Marshall were ever incurred on this card.

(iv) Keith Fitzpatrick's HMC credit card

1. In respect of Mr Fitzpatrick's HMC credit card, the disputed transactions total $4,000, less than the amount of the payment from the ING credit facility to this account. Other than that one amount of $906.82 conceded by Ms Marshall, none of the transactions have the appearance of being (or are evidenced to be) connected to Ms Marshall. And there is no evidence concerning an agreement between Ms Marshall and Mr and Mrs Fitzpatrick in respect of any of the transactions. Accordingly, I do not accept that the ING payment of $6,064 to this account related to, or reimbursed, expenses incurred by Ms Marshall other than in respect of $906.82.

(v) Maree Fitzpatrick's Members Equity credit card

1. In respect of the payments allegedly made to Mrs Fitzpatrick's Members Equity card, there is no evidence of any expenses or even a debit balance at the time of the ING cheque. There is, accordingly, nothing to connect Ms Marshall to any expense on that account.

(vi) Keith or Maree's Virgin credit card

1. Finally, in respect of the final payment noted to "Keith or Maree's Virgin credit card", the documentary evidence indicates that this amount was not deposited into either account. In any event, no money was owed on either account by Ms Marshall, for the reasons given earlier.

(vii) Other matters

1. Mr and Mrs Fitzpatrick raised other matters.
2. First, it was alleged that Ms Marshall bore the onus of proving that the credit card payments were not for her benefit. Given that the ING facility was in the names of Mr and Mrs Fitzpatrick, and they were the means by which drawings were made, I do not accept that the existence of a drawing is evidence of an advance to Ms Marshall, without further evidence. But even if Ms Marshall did bear that onus, it has been wholly discharged by establishing that the relevant payments were credited to the personal credit card accounts of Mr or Mrs Fitzpatrick. There was no satisfactory evidence to connect Ms Marshall to these payments, or to any expenses on the credit cards that were met by these payments. On the contrary, I am satisfied that in no respect did the credit card payments from the ING facility discharge liabilities owed by Ms Marshall, but were wholly in respect of the personal expenses of Mr and Mrs Fitzpatrick. Ms Marshall, apart from any payment from the ING facility, made payments which more than covered any of her expenses charged to Mr and Mrs Fitzpatrick's credit cards (which in all but one item were charged to Mrs Fitzpatrick's Virgin credit card).
3. Another matter raised concerned the Toowong property. The proceedings in the District Court of Queensland, referred to earlier, concerned the ownership of that property.
4. After the Priduct business ceased in 2011, and the parties were again in dispute, Ms Marshall commenced proceedings in the District Court of Queensland claiming that the Toowong property was held by Mr and Mrs Fitzpatrick on trust for her. During those proceedings the house was sold for $523,750. Consequently, the question in issue in those proceedings was whether there was a constructive trust in favour of Ms Marshall over the proceeds of sale. Unlike the jurisdiction of this Court (see s 44 of the District Court Act 1973 and Abbott v Klein [2015] NSWDC 45), the District Court of Queensland had jurisdiction to determine that question, since the unimproved value of the property was less than $750,000 (see s 68 of the District Court of Queensland Act 1967 (Qld)). The claim was resisted by Mr and Mrs Fitzpatrick, who maintained that the Toowong home wholly belonged to them.
5. Based principally on a payment of $57,000 from Ms Marshall to discharge the mortgage on the house, the District Court of Queensland found that Ms Marshall was entitled to a 34.3% share of the equity in the house and ordered Mr and Mrs Fitzpatrick to pay to Ms Marshall the sum of $172,100.25 plus interest and costs.
6. The judgment of 26 July 2012 was admitted into evidence without objection. Any dissatisfaction of Mr and Mrs Fitzpatrick with the decision awarding Ms Marshall a share of approximately one-third of that property can have no impact on the result of these proceedings. Ms Marshall received no credit in those proceedings for payments made to the credit of Mrs Fitzpatrick's credit card accounts.
7. A third matter raised was a payment by the liquidator of Priduct. In May 2013 the liquidator of Priduct declared a dividend in favour of Mr and Mrs Fitzpatrick in the sum of $20,552.50. The means of calculation of this amount is not especially clear, but arises from the claim for "up to 214,500" made by Mrs Fitzpatrick, referred to earlier at [48]. $214,500 is the amount which I accept was drawn from the ING account for the benefit of Ms Marshall or her company (see [14] above). Assuming in Mrs Fitzpatrick's favour that any debt was owed jointly and severally by Priduct and Ms Marshall (Mrs Fitzpatrick having submitted to the liquidator that the debt was owed by Priduct, but submitted in this Court that the debt was owed by Ms Marshall), any payment by Priduct would reduce the debt owed by Ms Marshall. As it turned out, the liquidator was compelled by a garnishee order to pay the dividend sum to Ms Marshall in partial discharge of Mr and Mrs Fitzpatrick's liability arising out of the judgment of the District Court of Queensland. As a result, the garnishee order on the liquidator benefitted Mr and Mrs Fitzpatrick as it operated to reduce the debt owed by Mr and Mrs Fitzpatrick to Ms Marshall for her interest in the Toowong property. Thus, the $20,552.50 dividend must also be a credit against the ING debt owed by Ms Marshall (and Priduct) to Mr and Mrs Fitzpatrick.
8. Finally, one particular payment of $20,000 to the ING facility was claimed to have been made by Mr and Mrs Fitzpatrick rather than Priduct. The documents clearly evidenced that the amount was paid by Priduct. Mr and Mrs Fitzpatrick submitted that Priduct paid this amount to their son, Alistair, in repayment of a loan by him to the company. He then paid it to Mr and Mrs Fitzpatrick to discharge a loan granted to him by them, and that they then paid it into the ING account. This repayment of a loan by Alistair Fitzpatrick is not supported by the Priduct financial statements, and was not the subject of any evidence from Alistair Fitzpatrick. The documents must be preferred to the evidence of Mrs Fitzpatrick.
9. The disputed credit card payments totalling $92,002.31 ($92,909.13 (from [17]) - $906.82 HMC credit card charge conceded by Ms Marshall to be her expense) and the $12,457.05 conceded by Mr and Mrs Fitzpatrick to be their personal expenses (i.e. the second category of use of the ING account) together constitute the ING drawdowns for the benefit of Mr and Mrs Fitzpatrick totalling $104,459.36.
10. The amount of $215,406.82 ($214,500 (see [14]) + $906.82 (see [18]) was paid from the ING facility for the benefit of Ms Marshall. This amount, together with the amount of $104,459.36 paid from the ING facility for Mr and Mrs Fitzpatrick's benefit and the drawdowns in respect of interest at the conclusion of the facility totalling $7,469 (see [16]), constitute the total of the drawdowns on the ING account, amounting to $327,335.18. Leaving aside the interest drawdowns, the total is $319,866.18 ($215,406.82 + $104,459.36).

(c) Payments credited to the ING account

1. Payments into the ING account were made by Ms Marshall by two means. First, regular payments were made to a related Macquarie Bank account in the name of Mr and Mrs Fitzpatrick. Regular automatic drawings were then made from that account to pay the interest on the ING facility. The amounts deposited into the Macquarie Bank account totalled $60,400. Secondly, Ms Marshall made payments directly into the ING account, in the sum total of $113,482.42.
2. The value of these two types of payments is complicated by other features. The payments to the Macquarie Bank account were not automatically credited to the ING account but remained in the account to cover the monthly interest bill on the ING account. The Macquarie account had a credit balance that averaged about $6,000, on which interest accrued.
3. The interest rate paid on this credit balance by Macquarie Bank unsurprisingly appears to be less than the debit interest rate charged on the ING facility. Mr and Mrs Fitzpatrick expressly disclaimed any additional entitlement in these proceedings from the circumstance that an amount remained in the Macquarie Bank account rather than the ING account and so I propose to ignore it. No distinction is drawn between payments made to the Macquarie account and payments made to the ING account.
4. Also, at the time the Macquarie Bank account was closed in March 2011 a balance of $3,245.50 remained in the account. This was not paid into the ING account. The parties disputed as to who had received it, but the account was in the name of Mr and Mrs Fitzpatrick. Therefore, in the absence of some other evidence, I conclude that they received it. The receipt by Mr and Mrs Fitzpatrick of $3,245.50 thus does not diminish the total payments made by Ms Marshall, but neither does it add to them. It is treated as part of the payments by Ms Marshall to the ING account, since it came from her, and was received by Mr and Mrs Fitzpatrick in partial discharge of any liability Ms Marshall bore for the ING facility.
5. In addition, Ms Marshall paid an amount of $26,389.23 to Mr and Mrs Fitzpatrick in (partial) repayment of a drawdown on the ING account of $27,500 for a deposit on a commercial property purchased by Priduct. Mrs Fitzpatrick initially accepted that she had received this payment, although subsequently she disputed it. In any event, the bank statements indicate that a cheque payable to Mrs Fitzpatrick was drawn on the Priduct account and I find that Mrs Fitzpatrick did receive this amount. Subsequently, a few weeks later, Mrs Fitzpatrick paid into the ING account the amount of $17,000. In my view, the payment of $26,389.23 should be treated as a payment by Ms Marshall to the ING facility.
6. The result is that Ms Marshall has paid the amount of $200,271.65 ($60,400 (see [92]) + $113,482.42 (see [92]) + $26,389.23 (see [96])) towards the ING account, and Mr and Mrs Fitzpatrick have paid $0. Mr and Mrs Fitzpatrick have received, in addition to the $104,459.36 referred to in [90], the sum of $9,389.23 retained from the payment of $26,389.23 ($26,389.23 - $17,000), a total of $113,848.59. Ms Marshall has received the benefit of $215,406.82 (see [91]).

(d) Interest

1. It is plain enough that the final debit balance on the ING account is equal to drawdowns plus interest, less payments: Final balance on ING account = drawdowns + interest - payments in This calculation of interest includes interest incurred during the period of the facility, including the payments of $7,469 made in respect of interest (see [16]). Rearranging the equation means that the interest equals the final balance plus payments less drawdowns: Interest = final balance on ING account + payments in - drawdowns The final balance was $235,849.48, the payments in were $200,271.65 (see [97]) and the drawdowns were, as indicated above in [12], [16] and [97], $329,249.41 ($327,329.18 plus amount retained by Mrs Fitzpatrick of $9,389.23 less interest payments of $7,469). Thus, interest equals $106,871.72 ($235,849.48 + $200,271.65 - $329,249.41).
2. The responsibility for interest should reflect each party's respective responsibility for the principal debt. There may be other ways to do this calculation, but it seems fair to compare the net contribution to the total of the drawdowns after payments. Payments ($) Drawdowns ($) Balance ($) Ms Marshall 200,271.65* 215,406.82* -15,135.17 Mr and Mrs Fitzpatrick 0* 113,848.59* -113,848.59

*See [97]. The net deficit of Ms Marshall's payments against drawdowns is $15,135.17 whereas Mr and Mrs Fitzpatrick paid nothing but drew down a total of $113,848.59. On this basis, interest should be borne in the ratio 15,135.17:113,848.59. Thus, Ms Marshall should bear 15,135.17/128,983.76 (15,135.17 + 113,848.59) of the interest, or 11.734%. This proportion of the interest of $106,871.72 equals $12,540.51. Together with the deficit on her payments compared to drawdowns ($15,135.17) means that Ms Marshall is responsible for the ING debt to the extent of $27,675.68.

1. Ms Marshall was liable to pay this amount of $27,675.68 towards the closing balance of $235,849.48 on 29 May 2012. Interest should accrue on this amount of $27,675.68 at court rates from 29 May 2012 until 18 December 2015. Interest for this period amounts to $6,620.73. ($) 27,675.68 Plus: 6,620.73 Interest from 29 May 2012 to 18 December 2015 Total 34,296.41

1. Against this amount must be credited the dividend payment by the liquidator to Mr and Mrs Fitzpatrick of $20,552.50 (see [88]), plus interest at court rates from 1 September 2013 to 18 December 2015. Interest for this period amounts to $3,039.80. ($) Dividend payment by liquidator to Mr and Mrs Fitzpatrick 20,552.50 Plus: 3,039.80 Interest from 1 September 2013 to 18 December 2015 Total 23,592.30

1. This produces a net amount payable by Ms Marshall of: ($) 34,296.41 Less 23,592.30 Total 10,704.11

1. However, the defendant's submissions say that Mr and Mrs Fitzpatrick should have judgment for the sum of $33,129.78, a greater amount than I have calculated. Given the uncertainties of interest and other matters, I propose to award the sum conceded by Ms Marshall in favour of Mr and Mrs Fitzpatrick.

E. Orders

1. Accordingly, I propose to make the following orders: 1. Judgment for the plaintiffs in the sum of $33,129.78. 2. Stand the matter over to a convenient date for any argument about costs or the making of formal orders.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 18 January 2016