Harvest Water Management Consultants Pty Ltd v Todd

Decision: [146]

Catchwords: CONTRACTS — Terms — Classification of terms — Where parties disagree on quantum and interest under loan agreement — Where written contract drafted seven months after first funds extended
ESTOPPEL — Proprietary estoppel — Detrimental reliance — Whether it was unconscionable for defendant to resile from promise to grant plaintiff security in her property
LAND LAW — Caveats — Caveatable interest —Where pleading sought a declaration that plaintiff has a caveatable interest in defendant’s property

Legislation Cited: Real Property Act 1900 (NSW), s 74O
Uniform Civil Procedure Rules 2005 (NSW), r 42.34(2)

Cases Cited: Douglas v Mikhael & Ors [2023] NSWSC 979
Fox v Percy (2003) 214 CLR 118; [2003] HCA 22
John Holland Pty Ltd v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451
Kramer v Stone [2024] HCA 48; (2024) 421 ALR 106
Stonebark Pty Ltd v Disage Pty Ltd [2022] NSWSC 1015

Texts Cited: Nil

Category: Principal judgment

Parties: Harvest Water Management Consultants Pty Ltd (Plaintiff)
Trudy Todd (Defendant)

Representation: Counsel:
F Clark (Plaintiff)
C Hart (Defendant)
Solicitors:
Finn Roache Lawyers (Plaintiff)
Carneys Lawyers (Defendant)

File Number(s): 2023/120530

Publication restriction: Nil

JUDGMENT

1. The plaintiff carries on business as a small environmental engineering consultancy in far northern New South Wales. Its principal is Mr Bradley Irwin. In early 2020, Mr Irwin met the defendant, Ms Trudy Todd, while they were both playing poker machines at the Seagulls leagues club in Tweed Heads. In the following months, they saw one another from time to time. For some of that period, Ms Todd and her son lived at Mr Irwin’s house.

2. Between May 2020 and September 2021, the plaintiff made numerous payments totalling $147,476.62 either to or for the benefit of Ms Todd. The plaintiff now seeks recovery of these amounts together with interest, principally on the basis that the funds were advanced pursuant to an oral loan agreement.

3. The defendant accepted that she must repay some of the payments made under that agreement up to a total of $84,484, being those payments that enabled her to (a) make repayments on a second-ranking and very expensive mortgage over her apartment (the so-called Humgoda loan), (b) bring her outstanding strata levies up to date, and (c) make payments in respect of the ‘Laneway Bar’. However, she disputes that she is liable to repay the balance, such as payments that enabled her to repay the first-ranking mortgage on her apartment, payments toward her internet and phone bills, payments she received as ‘wages’ from the plaintiff and numerous other payments. She also disputes that she ever agreed to pay interest. Implicit in all of this is that the defendant accepts there was a loan agreement of some kind.

4. The principal issues in dispute concern the scope of the parties’ agreement. In particular:

5. Was the agreement limited to payments having a particular character or payments in particular categories, as the defendant submits?

6. Did the defendant agree to pay interest?

7. Was the loan arrangement governed by the terms of the draft loan contract that the plaintiff drew up in December 2020?

8. How much is now owing?

9. Did the defendant grant security?

10. As to this last point, the plaintiff seeks a declaration that the plaintiff ‘has a caveatable interest in’ the apartment. By cross claim, the defendant seeks a declaration that the plaintiff does not have such an interest and seeks orders removing the caveat. This issue may have a significant bearing on the costs outcome of these proceedings. But for these pleaded claims, there is no reason at all why this proceeding could not have been resolved in the District Court. If I find that the commencement and maintenance of these proceedings in this Court was not warranted, I must not make an order for costs even if the plaintiff is otherwise entitled to judgment: r 42.34(2) of the Uniform Civil Procedure Rules 2005 (NSW).

Background

6. Virtually every aspect of every fact was in issue. The sheer number of facts in issue was out of all proportion to what was really in dispute. The oral evidence alone occupied almost three full days of hearing time.

7. Nonetheless, it is possible to make some general, uncontentious observations about the parties’ overall circumstances and as to how the present dispute arose.

8. Between 1985 and 2005, Ms Todd was a highly competitive and very successful professional surfer. She toured on the world circuit and was consistently rated among the top female surfers worldwide. Since retiring from professional surfing, she applied herself to various ventures, including the development of a property in Tweed Heads which she had purchased between 2000 and 2007, as well as some other commercial ventures. However, at the time she met Mr Irwin in early 2020, she was unemployed and was drawing unemployment benefits.

9. Ms Todd had been in a relationship with the father of her son which had ended by the time she met Mr Irwin. The relationship had ended acrimoniously and had involved physical abuse towards Ms Todd. At the time she met Mr Irwin in early 2020, Ms Todd was suffering from a degree of trauma as a result of that experience.

10. As mentioned, Mr Irwin and Ms Todd met in early 2020. In the following months, they saw one another from time to time and became friendly with one another.

11. In the early hours of one morning in early May 2020, Ms Todd and her son were taken to Mr Irwin’s house by officers of the New South Wales or Queensland police. Ms Todd had been assaulted by her former partner and, it seems, she told the police that Mr Irwin’s house was somewhere safe in New South Wales where she could be taken. He was happy to take her in. She and her son stayed there for some time over the following months.

12. At around this time, Mr Irwin and Ms Todd reached an agreement about Ms Todd borrowing money. For a period of over 12 months, the plaintiff made the payments now in dispute, at least some of which were unquestionably pursuant to their agreement.

Principles

13. Much of the dispute revolves around the terms of an oral agreement between the parties and so it is relevant to recall some basic matters of principle. The plaintiff must establish on the balance of probabilities that the terms of the agreement for which he contends were actually agreed to by the parties. In John Holland Pty Ltd v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451, Hammerschlag J said at [93]-[95]:

“[93] A binding agreement is made when a reasonable person would believe that, based on their words and behaviour, the parties intended to contract. This is an objective test, which in most cases can be administered by determining whether there has been an offer by one party to be bound on certain terms accompanied by an unqualified acceptance of that offer communicated by the other party to the offeror. See generally: Paterson, Robertson, and Duke, Principles of Contract Law, (4th ed 2011, Thomson Reuters) at [1.15] and [12.10]; J W Carter, Contract Law in Australia, (6th ed 2013, LexisNexis Butterworths) at [3.06].

[94] Where a party seeks to rely upon spoken words as a foundation for a cause of action, including a cause of action based on a contract, the conversation must be proved to the reasonable satisfaction of the court which means that the court must feel an actual persuasion of its occurrence or its existence. Moreover, in the case of contract, the court must be persuaded that any consensus reached was capable of forming a binding contract and was intended by the parties to be legally binding. In the absence of some reliable contemporaneous record or other satisfactory corroboration, a party may face serious difficulties of proof. Such reasonable satisfaction is not a state of mind that is obtained or established independently of the nature and consequences of the fact or facts to be proved. The seriousness of an allegation made, inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question of whether the issue has been proved to the reasonable satisfaction of the court. Reasonable satisfaction should not be produced by inexact proofs, indefinite testimony, or indirect inferences: see Briginshaw v Briginshaw (1938) 60 CLR 336 at 362; Helton v Allen (1940) 63 CLR 691 at 712; Rejfek v McElroy (1965) 112 CLR 517 at 521; Watson v Foxman (1995) 49 NSWLR 315 at 319.

[95] The sensation of feeling an actual persuasion, after a contest, that an event has happened or that something exists is one which is well known and recognised by experienced trial judges for what it is.”

14. In Douglas v Mikhael & Ors [2023] NSWSC 979, Richmond J said at [19]-[21]:

“[19] Where the existence and terms of an oral contract is in issue, consideration of the surrounding circumstances including the history of the relationship between the parties and their conduct prior to and at the time the alleged contract was entered into is permissible, as well as post-contractual conduct: Colyer Fehr Tallow Pty Ltd v KNZ Australia Pty Ltd [2011] NSWSC 457 at [47]–[50]; Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153; [2001] NSWCA 61 at [25].

[20] When a plaintiff seeks to prove an oral contract relying on conversations occurring many years ago, it is necessary to bear in mind the well known observations of McLelland CJ in Eq regarding the fallibility of human memory in Watson v Foxman (1995) 49 NSWLR 315 at 319:

‘… human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions or self-interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience.’

[21] It is for this reason that where the events (including conversations) relied upon took place many years ago, it is recognised that ‘the only safe course is to place primary emphasis on the objective factual surrounding material and the inherent commercial probabilities together with the documentation tendered in evidence’: Effem Foods Pty Ltd v Lake Cumbeline Pty Ltd (1999) 161 ALR 599; [1999] HCA 15 at [15] - [16]; Et-China.com International Holdings Ltd v Cheung (2021) 388 ALR 128; [2021] NSWCA 24 at [25]–[29] (and cases there cited).”

15. I must therefore be satisfied that the key conversations on which the plaintiff’s case depends actually took place and that those conversations were capable of and intended to create legal binding relations between the parties. This state of satisfaction should be reached with reference to the surrounding circumstances.

The facts in more detail

16. There was almost no agreement whatsoever as to what the terms of the loan agreement were, save that it extended at least to the payments which Ms Todd now accepts to be owing. I set out my conclusions as to the issues in dispute regarding the terms of the agreement from [113] onwards. However, as already noted, it is first necessary to work out what happened and what was said between the parties. That, in turn, involves a consideration of the parties’ divergent accounts of the facts.

The witnesses generally

17. It is necessary to make some general observations about the oral evidence at the outset.

18. Ms Todd’s evidence was chaotic. She was a very difficult witness. She was highly argumentative. She saw conspiracies in almost every substantive proposition put to her. For example, she was unwilling to accept the provenance of any documents that were in the plaintiff’s interest, even emails and text messages obviously written by her. She claimed that inculpatory texts and emails apparently written and sent by her should be viewed with suspicion, on the theory that they may have come from accounts to which Mr Irwin may at some point have had access.

19. For example, she was asked in cross-examination about an email which she sent to Mr Irwin on 11 July 2021. The email clearly acknowledged the existence of a loan arrangement of some kind. When presented with this document in cross-examination, she ducked and weaved to a remarkable degree, insisting that the document was unreliable and refusing to accept its authenticity. She said that the email had been sent from her son’s account to which Mr Irwin had access. She refused to accept that she had sent it, despite having earlier accepted that this was an account ‘used by both of [herself] and [her son]’. Yet in her own affidavit sworn 21 March 2024, she had referred to this very email in support of an aspect of her own case. She eventually accepted that she had sent the email, but only after the extraordinary inconsistency in her own position was pointed out to her. Her approach to this issue suggested that her instinct in giving evidence was to try to tailor her evidence to her interests and that she was willing to do so regardless of the true position.

20. Ms Todd also took a large number of opportunities in the witness box to make fantastic accusations against the plaintiff’s solicitor, who had previously acted for her in an unrelated matter. Despite there being no question of a conflict of interest, and despite Ms Todd never having made any complaint about him or any mention of this issue in her pleading or affidavit, she took every opportunity in the witness box to make outlandish accusations about him. I have disregarded those accusations altogether, but Ms Todd’s insistence on making so many serious accusations in the witness box causes me to further doubt her reliability as a witness. She treated the occasion of giving evidence as an opportunity to wreak havoc.

21. The overall manner in which Ms Todd gave evidence causes me to approach her evidence with a high degree of caution. I do not reject it altogether, and there are respects in which I have preferred her evidence to that of Mr Irwin. Nonetheless, I am generally unwilling to treat her evidence as reliable except where it is corroborated by other, demonstrably reliable, evidence.

22. I do not have quite the same reservations about Mr Irwin’s evidence, although he, too, was a very argumentative and difficult witness. In his case, however, I have found that his evidence is broadly corroborated by a number of contemporaneous documents, at least in important respects.

23. The general misgivings which I have expressed above about the reliability of Ms Todd’s evidence mean that wherever possible I have tried to determine the facts by reference to the available contemporary documents and the inherent logic of events: Fox v Percy (2003) 214 CLR 118; [2003] HCA 22 at [31]. In the following parts of my reasons, I will state the conclusions I have reached about the relevant facts without, in most cases, setting out the parties’ competing evidence. As will be apparent, I have generally favoured Mr Irwin’s account, although I have by no means accepted all of it.

Ms Todd’s financial circumstances

24. Ms Todd was and remains the registered proprietor of a three-level unit in Tweed Heads. The unit occupies levels 4, 5 and 6 of the building. It is the penthouse apartment in the property developed by her, as already mentioned. At various points including in early 2020 she had rented out at least part of this apartment. She explained that it is possible to access and occupy levels 5 and 6 separately from level 4, even though the property is technically just a single occupancy dwelling. In early 2020, she and her former partner had a lease on a separate property.

25. Ms Todd had taken out a first-ranking mortgage on her apartment with Bendigo and Adelaide Bank Limited (Bendigo Bank). An unsigned offer of home loan from Bendigo Bank indicates that the original total principal amount owing from Ms Todd was $1,400,000. Partially signed documentation for Ms Todd’s Humgoda loan dated 20 March 2020 indicates that the outstanding amount on her Bendigo Bank loan was about $980,000 at that point.

26. Ms Todd had previously leased a retail space in the Strand Shopping Centre in Coolangatta, Queensland where she and a colleague ran a clothing store. The landlord, Surfrider Investments Pty Ltd, had secured judgment against her in the District Court of Queensland for unpaid rent and had filed a writ for the levy of property against the title to her apartment in the District Court of New South Wales. The writ was issued on 5 December 2019 and identified the unpaid amount of the judgment as $243,264.59. This was the so-called ‘Surfrider’ debt.

27. In early 2020, Ms Todd wanted to either refinance her debts or sell the apartment. It was very difficult to determine from her evidence precisely what Ms Todd’s intentions were, because at times she said she only wanted to sell if she could not refinance. On the other hand, she said that the property had been for sale for as long as she had owned it. But it is at least possible to say that in early 2020 she had the property listed for sale with a local agent and that she was entertaining offers.

March to May 2020: discussions regarding Ms Todd’s financial matters and possible loan

28. In early 2020, Ms Todd was attempting to obtain finance in order to repay the Surfrider debt and to remove the writ from her property. She eventually obtained a loan from an entity called Humgoda in March 2020. The total amount of the Humgoda loan was $370,000 (although she claims she was tricked into borrowing that amount by her former solicitor) and the rate of interest was 16% per annum, reducing to 12.5% per annum if paid quarterly in advance. The loan was secured by a second-ranking mortgage over her Tweed Heads apartment.

29. At about this time, Ms Todd informed Mr Irwin that she was trying to sell her apartment. She was under a degree of financial pressure at this point, no doubt made worse by her personal circumstances. Mr Irwin recalls that the two of them had discussions in about April 2020 in which Ms Todd said she was seeking finance to pay out Surfrider, but this seems unlikely because, by then, she had already taken out the Humgoda loan. I do not think much turns on this. They saw one another reasonably often during this period and Ms Todd’s financial circumstances were a fairly regular topic of discussion. Mr Irwin gave evidence that in about the middle of April 2020, he and Ms Todd had various discussions about her financial situation. Ms Todd denies speaking with Mr Irwin about her financial affairs in detail at all, but this is impossible to accept in view of what occurred between them.

30. In April 2020, Ms Todd corresponded with an agent about selling her apartment. The front page of a draft contract of sale at the price of $2,564,062.50 was in evidence. The date for completion in the draft contract was 9 June 2020, however there is no evidence that the contract was executed and in any event the sale did not proceed.

31. At some point, Ms Todd decided to schedule an auction.

32. In about May 2020, at a time when Ms Todd was staying at Mr Irwin’s house, the two had a further discussion about Ms Todd’s finances. Ms Todd informed him that she was experiencing difficulty with her mortgage repayments and strata fees. She said that she needed Mr Irwin’s help. She asked him whether he could provide a loan until the apartment was sold. Mr Irwin said that he would be able to provide a short-term loan, but that the funds would have to come from the plaintiff and that he would need to charge her interest. Mr Irwin said that bank rates were fairly low and that he could lend her the money for six months. Ms Todd said that she could not wait to get her place sold, pay off all her debts and buy something smaller and be debt free.

33. Mr Irwin does not say that they spoke about any form of security for the loan during this discussion. Although Mr Irwin says that interest was raised in this conversation, he did not say that he mentioned a particular interest rate or that she said she would pay a particular interest rate.

34. The two had several further discussions about a possible loan arrangement at this time. In this context, Ms Todd gave Mr Irwin a copy of a valuation that she had recently obtained of her Tweed Heads apartment. The valuation gave a value of $2,375,000. At the same time, she told Mr Irwin that she owed a total of about $1,400,000, which I take to be approximately the cost of the Bendigo Bank loan and the Humgoda loan.

35. Mr Irwin and Ms Todd had a discussion in late May about how a loan from the plaintiff to Ms Todd might be structured. Mr Irwin asked her how much she needed to borrow. She said that she was unsure and asked if he could pay her bills until she could pay him back in six months’ time. In Mr Irwin’s memory, she referred to a ‘line of credit’, which would be an appropriate description of such an arrangement. Mr Irwin says that Ms Todd promised to give him security over her property in this conversation.

36. Also in late May 2020, Ms Todd informed Mr Irwin that the proposed auction of the property had been called off because of the COVID-19 pandemic. The property would instead be listed for sale with offers to purchase.

37. Ms Todd denied that any of the foregoing discussions occurred. In view of what happened next, I cannot accept her denials. I find that she and Mr Irwin did have discussions concerning a loan agreement in May 2020 as described in Mr Irwin’s evidence.

May 2020: the plaintiff begins to make strata payments

38. Starting on 28 May 2020, Mr Irwin began to cause the plaintiff to make fairly significant payments to Ms Todd or on her behalf. On 28 May, Mr Irwin withdrew $10,000 from the plaintiff’s account to pay towards Ms Todd’s outstanding strata levies. The total levies outstanding at that point were $11,922.80. Mr Irwin said that he paid the balance out of his own money, however only the amount of $10,000 is the subject of the present claim.

39. From July 2020 to May 2021, Mr Irwin caused the plaintiff to make five further strata levy payments to or on behalf of Ms Todd.

40. The plaintiff advanced $43,934.15 in total to assist Ms Todd with her strata levies.

June 2020: further discussions

41. In June (or possibly July) 2020, Ms Todd moved back to her apartment.

42. On 1 June 2020, there was a text exchange between Ms Todd and Mr Irwin in which they discussed the prospect of Ms Todd obtaining a loan through a provider suggested by her real estate agent instead of from Mr Irwin. The exchange was as follows:

Ms Todd: “Babe u sure we want too not take the money from there option ?? As we still have my mortgage ect too sort. On the 5th and then the big interest too.”

Mr Irwin: “I don’t mind either way. I can easy loan u 50 k”

Mr Irwin: “Bit more if need be”

Mr Irwin: “I want u to do what’s cheapest over all”

Ms Todd: “Ok best we get it done cheapest ! That’s why I have u too make me be like I use too be. Just waiting for my washing not much stuff. If u find time check out the listing”.

43. Mr Irwin says that, following this exchange, they discussed how a loan between them should be structured. Mr Irwin says that Ms Todd again promised to give him security over the property. Ms Todd explicitly denies this.

44. On 5 June, Ms Todd sent a message as follows:

“… We have too talk loan. I want too give u 4 percent or even 6 percent rather u get money then u take out the loan on my house till sell or we keep it. U take a covernet on place like they have now. It will take me 6 months too clear my credit file we talk but seems dumb to give them 11500 This time”.

June and July 2020: the plaintiff begins to pay for Ms Todd’s painters, Humgoda loan and creditors

45. On 7 June, Mr Irwin and Ms Todd had a text exchange about Mr Irwin paying $6,000 for a painter whom Ms Irwin had arranged to paint her apartment, no doubt to improve the prospects of securing a sale. Their exchange was as follows:

Ms Todd: “Just heard back from Leigh he can’t see me till tomorrow. Going too stay here tonight as Steve got tomorrow off and he going too give a lesson too Jesse. He didn’t have time today as Julie and kids were all here and friends for barbie. I am going too meet him at 1030am and drop Jesse off late too school then we can hang in between your work. I got too pay the painter tomorrow he finished. I like being here got a big week and trying too have a clear goal. Been speaking too Julie and as I said getting good response re air b Ahd b. Is that ok with u ??”

Mr Irwin: “Yeah that’s cool babe it’s public holiday tomoz in nsw so night have to go to qld to get cash for painter”

Ms Todd: “I have too give them $6000 but I be back by lunch time. We have a barbie with your friends at mine on sat night.”

46. On 9 June, Mr Irwin then caused the plaintiff to advance $6,000 for the purpose of securing painters for Ms Todd’s benefit.

47. On 22 June 2020, Ms Todd gave Mr Irwin the loan payment details for the Humgoda loan. She told him that her loan repayment was due shortly, that she could not pay it, and asked him to do so as part of ‘her loan’. On the same day, Mr Irwin caused the plaintiff to transfer the loan repayment sum of $3,854.16 to Humgoda. Ms Todd asked Mr Irwin to make similar repayments on this loan on a further six occasions. The final such payment was on 21 April 2021. On some of these occasions the request was made by text message. These payments totalled $26,979.12.

48. On 6 July 2020, Ms Todd texted Mr Irwin asking him for a further $1,500 so that she could discharge various debts. He suggested that he make it $2,000. She said ‘only if u can’. He then caused the plaintiff to transfer $2,000 to her Bendigo Bank account.

49. Mr Irwin then contributed to paying off Ms Todd’s debts to various creditors in the first half of 2021, including a payment to the firm at which her former lawyer (being the object of her gratuitous remarks in the witness box) had worked. All but one of these payments to Ms Todd’s creditors were labelled the ‘Laneway Bar’ payments in the defence. A strata levy payment was also incorrectly included in this category. In removing the strata payment and adding back the missed 22 March 2021 payment from the plaintiff to discharge a judgment debt against Ms Todd in the Tweed Heads Local Court, these payments totalled $11,711.16 instead of $13,571.45 as the defendant contended.

July and August 2020: discussion about interest

50. Mr Irwin said that he and Ms Todd had a discussion in July or August 2020 about interest. According to Mr Irwin, Ms Todd asked him if he would be happy with an interest rate of 4%, which is what she said she could get on a low documentation loan from Peppers Finance. Mr Irwin claims that Ms Todd eventually agreed to a rate of 12.5%, reducing to 7.5% provided that she repaid the loan in the agreed timeframe of six months.

51. Ms Todd flatly denies that any such discussion took place. Despite my general hesitation in accepting Ms Todd’s flat denials of what occurred, it seems unlikely that Mr Todd and Ms Irwin agreed on interest rates of 7.5% and 12.5% on this occasion. In part, this conclusion rests on some later correspondence which I will describe in due course. It also partly rests on the fact that it is clear from contemporaneous messages that the parties were at this point talking about the possibility that the plaintiff would pay out the Humgoda loan. Ms Todd does accept that any such loan from Mr Irwin would have involved both interest and security and that they spoke about this. However, she points out that no agreement was ever reached about Mr Irwin paying out the Humgoda loan and that this never occurred. Her point, in short, is that they did speak about interest but it was for a loan that never eventuated. .

52. It is probable that the discussion which Mr Irwin recalls was in this context and, as such, it probably did involve a discussion of interest rates. I am not satisfied that Ms Todd ‘agreed’ to an interest rate for other monies lent by the plaintiff at this point. For reasons I will explain below, I do not accept that Mr Irwin and Ms Todd ever finally reached an agreement about an interest rate.

September and October 2020: the plaintiff begins to pay for Ms Todd’s bills, miscellaneous expenses and the Bendigo Bank loan

53. The general pattern of messaging and payments continued into late 2020, including for Ms Todd’s strata levies and the Humgoda loan.

54. On 16 September 2020, Mr Irwin and Ms Todd exchanged the following messages:

Mr Irwin: “U gotta get ur rooms rented that’s for sure!”

Ms Todd: “That I do”

Mr Irwin: “If u need that 1250 for bills u can add it to ur loan if u want”

Mr Irwin: “I can give u more for lee later”

Mr Irwin: “Just saying I n case ur stressin about rent”

Ms Todd: “Thanks babe xx”.

55. Mr Irwin caused the plaintiff to pay $1,250 to Ms Todd’s Bendigo Bank account the following day. Mr Irwin said he believed this money was for Ms Todd’s ‘personal bills’ but did not otherwise elaborate. Ms Todd made a request for two further amounts of $1,250 on 21 October 2020, which Mr Irwin also caused to be paid to her Bendigo Bank account. What Ms Todd spent this money on was unexplained, although she said she had given at least some of the cash to ‘Leigh’. Mr Irwin says that these two further $1,250 payments were initially requested by Ms Todd for the purpose of repaying her Bendigo Bank loan, despite that one of them may have been used for ‘something else’. On balance, I find that one of the payments of $1,250 into Ms Todd’s Bendigo Bank account was for the purpose of repaying her Bendigo Bank loan. I am unable to reach a conclusion as to the other two payments of $1,250.

56. On 20 November 2020, Mr Irwin made a further payment of $4,000 to Ms Todd’s Bendigo Bank loan. They had a text exchange on that day that included the following:

Ms Todd: “Best pay me then I will meet u at pub and pay through my bank today”

Mr Irwin: “It probs won’t get thru that quick”

Mr Irwin: “But I u want il loan u 4 more”

Mr Irwin: “Into bendigo”.

October and November 2020: the plaintiff offers to employ Ms Todd; the plaintiff makes first wage payment

57. In October 2020, Mr Irwin and Ms Todd discussed the possibility of Ms Todd working at the business carried on by the plaintiff. Mr Irwin accepts that he offered her work but says that he did so only as a way of assisting her financially. This is something he had done for friends previously. According to Mr Irwin, he asked Ms Todd to start on 2 November 2020 as an employee. However, she did not show for work on that day or any other day until 30 November, when she arrived in a distressed state. On that occasion, she asked if she could be paid in advance because she needed the money. Mr Irwin sat her down and explained how to set herself up as an employee on his accounting software. However, even with Mr Irwin’s assistance they were unable to complete the task because Ms Todd needed to finish the employee profile and provide a completed tax file number declaration and superannuation forms, which she did not do on that or any other occasion.

58. The plaintiff did pay Ms Todd for one month of work in advance during November 2020. However, Mr Irwin said that Ms Todd never performed any work for the plaintiff, either in November or subsequently.

59. Ms Todd again flatly denied Mr Irwin’s account. She said she did attend the plaintiff’s office for work from time to time, albeit irregularly, and claims that she was brought on for ‘business development’ purposes. She did not explain how exactly she assisted with business development, or when she did it.

60. I find that Mr Irwin did intend to employ Ms Todd as a favour to her and that he paid her for her services in advance in November 2020, with the expectation that she would complete her employee profile and perform services. At least at the outset, he intended that the plaintiff would pay her a wage for work of some kind. The first such payment was a payment of wages in advance of $4,631.

61. However, the situation is different in relation to the subsequent payments that the plaintiff made to Ms Todd on account of ‘wages’. I will deal with these later in my reasons.

October 2020: the plaintiff begins to pay for Ms Todd’s car expenses

62. On 12 October 2020, Mr Irwin caused the plaintiff to pay $130.90 for the renewal of Ms Todd’s driver licence.

63. In May 2021, Mr Irwin caused the plaintiff to pay $445.81 for the renewal of Ms Todd’s car registration.

November and December 2020: the plaintiff begins to pay for Ms Todd’s phone and internet expenses

64. In November 2020, Mr Irwin caused the plaintiff to purchase a new mobile phone for Ms Todd to the cost of $938.85. Ms Todd said this was a birthday present. She also said Mr Irwin referred to it as being a work phone.

65. In that same month, Mr Irwin caused further payments to be made by the plaintiff in respect of the installation of a better wifi connection in Ms Todd’s apartment so that she could operate security cameras. In November and December, Mr Irwin also caused the plaintiff to make payments toward Ms Todd’s phone and internet bills. The fact that he did these things is corroborated by some text messages but none of them make any reference to the ‘loan’.

66. Mr Irwin caused the plaintiff to make payments toward Ms Todd’s internet and phone bills until September 2021.

67. The cost of the phone, wifi equipment, internet bills and Telstra phone bills totalled $2,835.07.

December 2020: the proposed written loan agreement; the plaintiff makes associated payments

68. On 7 December 2020, Mr Irwin prepared a written loan agreement from an online template. He and Ms Todd then had a lengthy exchange, as follows:

Mr Irwin: “I did up our contract today”

Mr Irwin: “And the proper loan register”

Mr Irwin: “Next time u come over we should read and sign”

Mr Irwin: “Took all day lucky I’m a good bush lawyer lol”

Ms Todd: “Send too my lawyer”

Mr Irwin: “Il send to u u can send to him”

Ms Todd: “No I don’t want in my inbox”

Ms Todd: “Not at this. Point send me break down as well please.”

Mr Irwin: “Break down?”

Ms Todd: “Just print it and I look at it I coms get it. What u paid”

Mr Irwin: “U should just come over and I go thru it with u”

Mr Irwin: “In paper”

Ms Todd: “What was gifts aren’t on the loan xx”

Mr Irwin: “U can take hard copy to ur lawyer”

Ms Todd: “Just driving now”

Mr Irwin: “Yeah just loan”

Ms Todd: “Ok cool [emoji]”

Mr Irwin: “But u can’t start saying stuff was a gift if it wasn’t”

Mr Irwin: “I have it all itemised in detail in a register”

Ms Todd: “I know what was so I check”

Mr Irwin: “We can go thru it”

Ms Todd: “Ok”

Ms Todd: “Don’t be unfair”.

69. The plaintiff’s claim includes costs of $49.99 and $29 for ‘WonderLegal Loan Documentation’ and ‘Net Lawman Norwich’. These payments were made on 8 and 9 December 2020. I infer that these costs were associated with obtaining the December 2020 draft loan agreement.

70. In mid-December, Mr Irwin and Ms Todd met to discuss the draft loan agreement. The document attached a draft ‘register’ recording all of the payments which, according to the draft loan agreement, comprised the loan advances. According to Mr Irwin, Ms Todd said the register looked correct and ‘agreed’ with the loan agreement, but said she wanted to get her lawyer to review it. She said she would ‘get back to’ Mr Irwin after her lawyer had looked at it. Ms Todd accepts that they did meet and that he handed her the draft contract, but denies his account of what was said. However, I find it likely that they did have a discussion about these documents at the time in the terms recalled by Mr Irwin.

71. It is relevant to note clause 4(a) of the draft loan agreement, which was as follows:

“4. Borrower Undertakings

The Borrower provides the following undertakings to the Lender:

(a) that the Loan Amount shall be applied solely to the following purpose, referred to hereinafter as the ‘Approved Purposes’ defined in the Loan Register and below:

Payment of mortgages, strata fees and general expenses relating to the Borrower’s Property at:

[XX] Boundary Lane, Tweed Heads, NSW 2485

Registered Plan: Lot 4 Plan SP 86350

Folio Identifier 4/SP86350”.

72. However, it is also relevant to note the preamble to the draft loan agreement, which was as follows:

“The Lender has been providing loans to the Borrower since May 2020 for the purpose of payment of mortgage, strata and other household expenses relating to the Borrower’s Property at, [XX] Boundary Lane Tweed Heads NSW 2485, while it is being sold…” (emphasis added).

January 2021: Mr Irwin’s cancer diagnosis; further discussions about loan agreement and register

73. On 4 January 2021, Mr Irwin was diagnosed with aggressive melanoma. He was unable to work and the plaintiff therefore did not trade for two years until January 2023. During this period, Mr Irwin received income protection insurance payments while he underwent significant cancer treatment.

74. Also at around this time, Mr Irwin and Ms Todd discussed her ongoing employment with the plaintiff. Ms Todd was still receiving Centrelink benefits and had not made any serious attempt to attend for work. Mr Irwin told her that he did not want to her to be an employee if she was still receiving Centrelink benefits because he did not want to be in trouble with the ATO.

75. Mr Irwin says that Ms Todd, on this occasion, agreed that what had already been advanced on account of wages should be added to her loan. Mr Irwin also said that they agreed during this conversation that Ms Todd was not an employee of the plaintiff. Ms Todd denies this. However, I again find it likely that the discussion did occur largely as Mr Irwin recalls. My only hesitation here is as to whether Ms Todd agreed that the one wage payment she had already received in November 2020 was to be treated as a loan advance. Ms Todd specifically denies that this was agreed. I am not persuaded that Ms Todd agreed to add this amount, which by this point had already been spent and which was a genuine payment of wages when made, to her loan account with the plaintiff.

76. On 28 January 2021, Mr Irwin and Ms Todd had the following message exchange:

Mr Irwin: “If u wanna go to shops come over”

Mr Irwin: “II but jesses school stuff”

Mr Irwin: “For him”

Mr Irwin: “Not for u”

Mr Irwin: “Il put it on ur loan”

Mr Irwin: “It’s probs like 80 grand now”

Ms Todd: “What u put everything u buy me on it lol !! Books for Jesse don’t bother !! Far out”

Ms Todd: “I ask Dan”

Mr Irwin: “lol”

Ms Todd: “Yes I know I owe u”.

77. It is this exchange that, in part, leads me to reject Ms Todd’s assertion that she did not discuss the loan agreement and register with Mr Irwin in mid-December 2020, discussed above at [70]. I also reject Ms Todd’s assertion that she did not remember receiving the loan register in July 2021. Her message demonstrates that, at least by 28 January 2021, she had an understanding of the loan register.

78. In the following months, Mr Irwin continued to cause the plaintiff to make further payments for Ms Todd’s benefit, including for strata levies, the Humgoda loan, a car registration renewal fee, phone bills, internet bills and payments to various of Ms Todd’s other creditors. He did not however press her to finalise the loan agreement. He explained that he was undergoing extensive cancer treatment during this period which had a significant effect on his physical health.

January 2021: the plaintiff begins to make further ‘wage’ payments

79. It is relevant to mention one further exchange that occurred during early January 2021. Mr Irwin says that Ms Todd arrived at his house in an emotional state and asking for more ‘pay’. Ms Todd wanted him to continue to ‘pay’ her for work so that she was able to demonstrate to a bank that she was in employment. Mr Irwin said that he would continue to lend her money and call it ‘pay’ but that he was not prepared to lie for her and treat her as an employee when she was not.

80. Mr Irwin then caused the plaintiff to transfer $4,631 into her Bendigo Bank account on 8 January 2021, which he did again in each of the five following months. However, he says he did not complete pay slips (other than the first November 2020 pay slip which, I have found, did relate to a wage payment), nor did the plaintiff withhold tax (she had not provided a tax file number declaration) and nor did the plaintiff claim the ‘pay’ as a deduction against its assessable income. According to Mr Irwin, the arrangement was just a further way of lending Ms Todd money under what he believed to be their existing arrangement. The rationale for this was fairly straightforward. According to Mr Irwin, Ms Todd wanted to be able to tell potential lenders that she had employment.

81. Ms Todd denies all of this. She points to the existence of payslips for each of these payments. Mr Irwin disputes that he ever prepared them. He believes they were inexpertly prepared by Ms Todd during the period in which he was incapacitated. He also claims that she sneakily emailed them from his account to a potential loan broker. This would be consistent with his evidence that she said she needed the payslips to demonstrate ongoing employment.

82. I am unable to reach any particular conclusion about the provenance of the payslips and the email by which they were sent to the broker. Mr Irwin’s claim that Ms Todd falsified them and then falsely passed them off as having come from him involves a high degree of dishonesty on her part. Although I am generally willing to prefer Mr Irwin’s evidence, I am not so persuaded by his account that I accept that this incident occurred as he claims.

83. On the other hand, I do not find the existence of the payslips to bear significantly on the issue. The payslips do not on any view reflect a genuine employment relationship because there was no such relationship. Save for the one occasion in November 2020 which I have already mentioned, Ms Todd did not attend work or perform services. The later ‘wage’ payments all occurred during the period in which Mr Irwin was undergoing treatment and in which the plaintiff was not trading. Given that I do not find the existence of the wage slips to be terribly probative of the real issue in dispute – which, here, is simply whether they agreed that the amounts paid as ‘wages’ under their self-evidently phony employment arrangement formed part of the loan arrangement – I do not find it necessary to reach a conclusion about who prepared them. I find that all of the ‘wage’ payments, save for the very first one, were advances made under the parties’ ongoing loan arrangement.

April 2021: the April credit card charges

84. In April 2021, there were a number of charges to a credit card which Mr Irwin claims to be loan advances by the plaintiff. The credit card looks to have been a work credit card on the plaintiff’s account.

85. The parties, as with everything else, are completely divided on how these charges came about. Mr Irwin says he lent his card to Ms Todd because her card had been suspended. She says they went shopping and he bought things for her. The amounts were small. There was one ATM cash withdrawal of $1,000 (plus $12.50 in fees) which was not included in the plaintiff’s claim. The remaining credit card payments in respect of this April shopping trip, being the amounts included in the plaintiff’s claim, totalled $477.59.

April to July 2021: further discussions

86. In April 2021, Mr Irwin says that he asked Ms Todd when she would be signing the loan agreement. On his account, Ms Todd said that she was ‘happy to sign it’ but wanted to review it. Mr Irwin claims that Ms Todd also said that she would give him security in this conversation. Ms Todd once again denies the whole of this conversation. I find that it occurred as Mr Irwin says it did, although I have not found this conversation to be terribly relevant in reaching my conclusions. Even on Mr Irwin’s account it, she did not commit to the document (least of all the interest rates). In any event, by this stage most of the payments had already been made.

87. In May 2021, Mr Irwin advised Ms Todd that the line of credit was going to end shortly. In that same month, Ms Todd was physically injured in a car accident.

88. In June 2021, Mr Irwin again warned Ms Todd that the line of credit was coming to an end.

89. On 11 July 2021, Mr Irwin sent an email to Ms Todd attaching a copy of an updated loan register. His email included the following:

“…Also I have put the rate at 7.5% as that is a fair for this type of loan. I remember when we discussed this previously, I said 7.5% and you said you could only afford 6%. I am always happy to negotiate if you can show me where you obtain a better interest rate for a similar product elsewhere I will match that rate for you.

If you make a good case I might agree to 6%.

Please send this to your lawyer for the contract you mentioned. All legal costs, including mine, are on you if you wish to go down that road.”

90. The fact that Mr Irwin included this language in his 11 July email strongly suggests that he did not at that point believe that he and Ms Todd had already agreed an interest rate. In oral evidence, Mr Irwin explained that he had expressed himself poorly in this email and that he was only trying to be conciliatory. He says that he nonetheless believed that they had previously reached an agreement about interest, despite what he wrote in his 11 July email.

91. I find the far more likely explanation for this email to be that the parties had not, in fact, reached a final agreement as to interest by that point. It is largely for this reason that I am unable to accept his evidence (referred to at [49] above) that they agreed on interest rate of 7.5% and a ‘default’ rate of 12.5% during their July or August 2020 discussion.

92. Ms Todd’s immediate response to the email was as follows:

“See u in court as u sexually harassed me while working for u.”

93. There followed a telephone discussion in which Ms Todd was abusive towards Mr Irwin. He followed up with a rather more even-tempered email. She then sent the following email:

“U can discuss with my lawyer after I break down the amount he will advise me by law where we go from there.

Please do not contact me until he does. We will discuss the current rates and the terms or in which the money I agreed too pay will be paid.

U have turned on me as I will not date u as u know I am [suffering] PDSD but u made it clear that only if I dated u that u would do the right thing:

I looked through all my messages and I said that I wasn’t ready I wanted too get better and too stop pressuring me.

Yet u continue too do so. Then threaten me. I don’t need this pressure knowing I am trying too get better. It’s seems u clearly had your own agenda.

I will pay what is facts and with receipts ect. There was no time limit and there was no rate agreed on. I will seek more advice and get back too u. Please don’t fight me and if u say the things u did too me defamation is on the cards as clearly that’s not the case.

Please not I want a good outcome as u already stated in so many text if I [didn’t] go out with u we wouldn’t be friends.

Clearly after all I the insults ect I need a few weeks too see how this will go.

Do not contact me again until I decide what lawyer. U did all this u should have just let me get better and not pressure me into a relationship.

Thanks

Trust Todd.”

94. This is the email that Ms Todd desperately tried to distance herself from in the witness box, as mentioned at paragraph [18] above.

95. Despite Mr Irwin saying the line of credit ended on 18 July 2021 with a $2,000 payment from Mr Irwin’s personal credit card to Ms Todd following a loss ‘on the pokies’, the plaintiff advanced some further sums in August and September 2021 toward Ms Todd’s internet and phone bills. The last such payment was on 12 September 2021. In the following months, Mr Irwin made various attempts to contact Ms Todd about the amounts he says she owed him, culminating in this litigation.

Other payments

96. There were two further categories of payments included in the plaintiff’s claim that must be mentioned.

Mr Irwin’s personal payments

97. Mr Irwin made payments from his personal credit card from 6 July 2020 to 18 July 2021. These payments totalled $13,625.93 and included payments for Ms Todd’s son’s surf lessons, a hair appointment, the payment of $2,000 mentioned at paragraph [95] and multiple other unexplained transfers.

Unexplained credit card charges

98. There were other payments made from Mr Irwin’s business cards (that is, on the plaintiff’s account) which he claims were referable to the loan agreement, but which were otherwise not explained. These include:

99. $500 advanced on 10 February 2021 into Ms Todd’s Bendigo Bank account.

100. $488 advanced on 29 March 2021 with the description ‘Paypal Athena Sol’.

101. $102.90 advanced on 23 April 2021 with the description ‘Dracula’s Broadbeach’.

102. I have already described the three payments of $1,250 in about September and October 2020 at paragraph [55] above. Of these, I am satisfied that only one was an advance under the loan agreement, the other two payments having been inadequately explained by either party.

The nature of the relationship between Ms Todd and Mr Irwin

100. Before addressing the specific issues in dispute, it is relevant to make some observations about the nature of the relationship between Ms Todd and Mr Irwin more generally. As with everything else, this was in dispute.

101. Ms Todd’s case was that they were friends, that she was in a very vulnerable position but that she was not in any great financial need, that Mr Irwin offered to help her out by lending her money to pay out the Humgoda loan but that this never came to be. She said that Mr Irwin was otherwise very generous to her and gave her many gifts, and that Mr Irwin is now suing her out of vengeance because she refused to have a sexual relationship with him.

102. Mr Irwin tells it very differently. According to him, they were not in any kind of relationship, although they were intimate from time to time. He says he did not want to be in a relationship with her but that he was willing to her help her out financially because she was a friend and was clearly in need. He says that he was only ever willing to help her out financially on the basis of a loan arrangement, which he believed she had agreed to at the outset. He points out that he was personally not in a position to lend significant sums and that the plaintiff could only have made the payments in the expectation of being repaid, which he expected was to occur when she sold her Tweed Heads unit.

103. The many text messages and emails in evidence show that the two were clearly very friendly when they first met. Mr Irwin was generous in numerous ways. He provided somewhere for her to stay; he assisted her with various financial matters; he was also generally helpful with practical things like getting her wifi to work. The documentary evidence also shows that Ms Todd genuinely appreciated all of these things.

104. There is however no suggestion in any of the texts or emails that either was smitten with the other, whether at the beginning of the relevant period or at any later point in time. Their communications were never particularly romantic. Mr Irwin’s messages were overwhelmingly of a practical nature.

105. The state of the evidence does not allow me to reach the kinds of conclusions about Mr Irwin’s motivations for which Ms Todd contends.

The issues in dispute

106. The plaintiff seeks judgment for the following amounts.

107. For payments made out of the plaintiff’s main savings account, the sum of $125,511.41 plus interest.

108. For payments made out the plaintiff’s credit card account, the sum of $8,339.28 plus interest.

109. For payments made out of Mr Irwin’s personal savings account, the sum of $13,625.93 plus interest.

110. Mr Irwin has summarised these various payments as follows:

“(a) Payment of overdue strata fees to avoid legal proceedings being commenced against her by her Owner’s Corporation Body Corporate managers.

(b) Mortgage repayments to the mortgagor of her apartment, Bendigo Bank.

(c) Payments to [Humgoda] who loaned Trudy money she used to remove a Writ over that property lodged by Surfrider Investments Pty Ltd who had obtained a judgment against her in the District Court of Queensland.

(d) Payments of money to fund improvements to her apartment prior to it being listed for sale including painting and general touch ups to have the property ready for sale.

(e) Payment of and for Trudy’s living expenses and outgoings like mobile phone, internet, car rego, sports fees for her son Jesse.

(f) Payment of unpaid debts to secure satisfaction of Court judgments which were adversely affecting her credit rating.”

108. Despite the terms of her defence and the content of her affidavit, Ms Todd’s position by the conclusion of the trial was that she admitted a liability in the sum of $84,484. The rationale for that figure, as I noted at paragraph [3], was that she accepted a liability to repay amounts in three categories, being (a) repayments on the Humgoda loan, (b) payments for strata levies, and (c) make payments in respect of the ‘Laneway Bar’. However, as already referenced at paragraph [48], although she says she accepts an obligation to repay amounts in respect of the ‘Laneway Bar’, the amounts in this category seem instead to relate to payments to various of her other creditors.

109. On my calculations, the rationale which Ms Todd gave for admitting an amount to be payable should have caused her to admit that the sum of $82,624.43 was payable. This would have been made up as follows.

110. Payments for the Humgoda loan: $26,979.12.

111. Payments to various of the defendant’s creditors mislabelled as payments for a ‘Laneway Bar’: $13,571.45 on the defendant’s calculations but in fact $11,711.16 once an incorrectly included strata payment was removed and a missed creditor payment added back in (as set out in paragraph [48]).

112. Payments for strata levies: $43,934.15.

113. The major factual issue in dispute concerns what was said in the key discussions on which the plaintiff’s case is based. I have already made findings in relation to that matter in the course of setting out the facts. I have, in substance, mainly rejected Ms Todd’s account of what was said and adopted Mr Irwin’s account.

114. The particular issues that fall to be resolved in the light of that finding were set out at [4] above.

115. I will deal with those issues in turn.

Was the agreement limited to payments of a certain character?

113. Ms Todd’s rationale for admitting any liability at all was that their agreement had only ever been that Mr Irwin would lend her funds to allow her to keep her apartment. She says the admitted amounts were of that character, namely they were the amounts she needed to pay to keep her apartment. As she submitted, she and Mr Irwin only ever discussed a loan to ‘keep the wolf from the door.’ In her submission, they only ever discussed a loan to allow her to make payments directly relating to her apartment.

114. However, the evidence does not demonstrate that their loan agreement was limited in that way. My reasons for reaching this conclusion are as follows.

115. As already explained, I have generally found Mr Irwin to be the more reliable of the two witnesses. I accept that he and Ms Todd had the discussions referred to in paragraphs [31]-[34]. I also note that after these discussions, Mr Irwin behaved in a way that was consistent with the existence of a general loan arrangement. He caused the plaintiff to pay a large number of expenses on Ms Todd’s behalf, frequently referring in contemporaneous texts to the existence of a ‘loan’ arrangement even where the amount appeared to have nothing to do with the apartment. Furthermore, Ms Todd frequently acknowledged that theirs was a loan arrangement, and she did so in the context of payments that did not relate to her apartment.

116. In July 2021 when things were becoming tense between them, he forwarded the draft contract together with an updated loan register. Her response (see [93]) involved an acceptance that she owed monies but that (a) she did not believe she owed as much as she did and (b) she insisted she had not agreed an interest rate. She did not however at this point say that the loan was only ever limited to particular kinds of payments. Even after this exchange, she was willing to add amounts to her ‘loan’ that had nothing whatsoever to do with her apartment, such as occurred on 18 July 2021:

Mr Irwin: “So u want this all added to ur loan?”

Ms Todd: “The two grand yes. Like u said”.

117. One circumstance that makes it particularly difficult to accept Ms Todd’s argument is that she disputes her liability to repay some amounts that seem to have exactly the same character as the amounts she admits. For example, the plaintiff occasionally gave her money to pay the Bendigo Bank mortgage, yet she disputes that these amounts are repayable, even though they were no less directly related to the apartment than the Humgoda mortgage.

118. Ms Todd’s submission about the nature and extent of the loan arrangement is also difficult to reconcile with other aspects of her case. Nowhere in her affidavit did she depose to a discussion with Mr Irwin in which a loan of that particular character was discussed. In fact, in her affidavit she explicitly said that she believed the payments for strata levies were a gift. Moreover, there was no direct connection between the mislabelled ‘Laneway Bar’ payments and her property despite these forming part of her admission.

119. I am also unable to place any significant weight on the description in clause 4(a) of the December 2020 draft contract, being the ‘approved purposes’ that Mr Irwin’s payments could be applied to. Apart from the fact that this document significantly post-dates the time at which the agreement was struck, it explicitly refers in its preamble to the purpose of the payments as being for the property ‘while it is being sold’. This seems to me to be rather different from a purpose of ensuring that Ms Todd could keep the property which, I infer, is what her counsel meant by his reference to payments that would ‘keep the wolf from the door.’

120. I therefore reject Ms Todd’s submission that she only ever agreed to repay the amounts in limited categories. I find that she agreed to borrow funds from time to time for general purposes, which included but were certainly not limited to payments in connection with the Tweed Heads apartment.

Interest

121. For the reasons set out at paragraphs [50] and [91] above, I conclude that the parties never reached any final agreement about an interest rate. I accept that they discussed this issue from time to time, but I find they never agreed on a rate for the purposes of the general line of credit arrangement.

122. I note the plaintiff does not seek pre-judgment interest other than on a contractual basis.

Was the loan arrangement governed by the terms of the draft contract?

123. I do not accept that the parties’ arrangement was ever governed by the terms of the draft contract prepared by Mr Irwin in December 2020. This document was produced late in the piece and was never formally agreed to by Ms Todd. It seems to have been a source of frustration to Mr Irwin that she would not sign it.

124. Even if Ms Todd said that she was broadly content with the document, as Mr Irwin claims, it was clear even on his account that she did not agree to a major aspect of it, namely the interest rate. I note that the draft contract provides for the payment of interest at 7.5% and ‘default’ interest of 12.5%. For reasons I have already explained, the rate of interest is a matter that the parties never actually agreed upon. This fact alone makes it impossible to conclude that their agreement was ever governed by the terms of the draft contract.

How much is owing?

125. A difficulty about identifying the amount owing is the incoherence in Ms Todd’s case on this issue. At some points, she denied that there was ever a loan at all. At other times during her cross-examination she described the whole of the amounts claimed as a ‘loan between friends’. Ms Todd did not present a coherent case as to which amounts were part of the loan and which were not. Rather, she said at several points in her evidence that it was a matter for the Court to determine.

126. That being said, Mr Irwin did not provide much assistance as to why several of the payments he contends he loaned to Ms Todd are actually repayable.

127. There is some force in Ms Todd’s submission that some of the payments have the character of gratuitous payments between friends, such as the minor credit card charges during April 2021 when Mr Irwin gave her his card. These are for things like fast food. There are other payments that also seem to be in this category. In all, I find that the following payments should simply be seen as gratuitous payments between friends and not as loan advances:

128. The payments that Mr Irwin caused the plaintiff to make toward Ms Todd’s phone and internet bills. In circumstances where Mr Irwin continued to cause the plaintiff to make these payments even after he advised Ms Todd that her line of credit had ended, I conclude that these were not loan advances.

129. The purchase by the plaintiff of Ms Todd’s new phone. Although I am not entirely persuaded by Ms Todd’s assertion that this was a birthday gift from Mr Irwin, who referred to it as a ‘work phone’, in circumstances where there is no contemporaneous evidence corroborating Mr Irwin’s account that Ms Todd asked for a new phone and asked that the cost of it be placed ‘on her loan’, I am not willing to find this to be a loan advance.

130. The purchase of wifi mesh equipment by the plaintiff for Ms Todd’s apartment. The contemporaneous text messages on this issue, which spanned three pages of evidence, do not reference the loan whatsoever. I conclude that the purchase of wifi mesh was a gift.

131. The payments made by the plaintiff toward Ms Todd’s car expenses. The first payment, towards Ms Todd’s licence renewal, was unexplained in the evidence apart from a brief description with the amount expended. As to the second payment, Ms Todd’s car registration renewal fee, the only documentary evidence was a text from Ms Todd sending across her registration details. Mr Irwin’s evidence was that he told Ms Todd these payments would be added to the loan. Given the limited evidence, I am unwilling to conclude that these payments were loan advances.

132. For reasons explained above, I also do not consider the first ‘wage’ payment of $4,631 to be a loan advance.

133. As to the Wonderlegal and Net Lawman Norwich expenses referenced above at [69], Mr Irwin has not explained, and I do not see a reason, why Ms Todd should be responsible for payments in connection with the drafting of the December 2020 loan arrangement.

134. I am also not satisfied that the unexplained credit card charges mentioned above at [98] and [99] are repayable.

135. Finally, I note that the plaintiff’s claim includes a number of payments made by Mr Irwin from his personal account. The evidence does not allow me to conclude that Mr Irwin paid these monies on behalf of the plaintiff. Nor has Mr Irwin sought to recover these amounts from Ms Todd personally by joining these proceedings as a plaintiff in his individual capacity. I am therefore not satisfied that the plaintiff is entitled to judgment for the amounts paid by Mr Irwin personally.

136. Apart from the payments referred to in the previous five paragraphs, I find that the payments claimed by the plaintiff were loan advances and that they are repayable. In relation to all of these payments, I have accepted the plaintiff’s evidence that they related to the loan agreement.

137. It follows that there should be judgment for the plaintiff in the sum of $121,660.43. This amount includes:

138. Payments made by the plaintiff toward Ms Todd’s strata levy payments to the amount of $43,934.15, as admitted by the defendant.

139. Payments made by the plaintiff toward Ms Todd’s Humgoda loan to the amount of $26,979.12, as admitted by the defendant.

140. Payments made by the plaintiff to various of Ms Todd’s creditors to the amount of $11,711.16, as admitted by the defendant.

141. The $6,000 payment made by the plaintiff toward the painters involved in improving Ms Todd’s property. This seems to be the very kind of expense that Ms Todd had in mind when she and Mr Irwin spoke about a loan agreement at the very outset.

142. The payments made by the plaintiff toward Ms Todd’s Bendigo Bank loan totalling $5,250. I have taken into account one of the plaintiff’s payments of $1,250 to Ms Todd, which I found, on balance, was advanced for the purpose of paying off Ms Todd’s Bendigo Bank loan: see paragraph [55] above.

143. All of the ‘wage’ payments, excluding the first ‘wage’ payment, totalling $27,786, for reasons explained at [83].

Did the defendant grant security?

134. The plaintiff seeks an order that it has a caveatable interest in the Tweed Heads apartment. By cross claim, Ms Todd seeks the following orders:

“1 A declaration that the Cross defendant has no caveatable interest in the land.

2 A declaration that Caveat dealing no. AS639636 is invalid.

3 An order that Caveat dealing no. AS639636 be withdrawn.

4 An order that the Cross defendant bear the cost of Caveat dealing no. AS639636 being withdrawn.”

135. The facts (so far as the evidence discloses) in relation to the caveat are as follows.

136. A caveat was lodged by the plaintiff on 17 November 2022. The details of the claim were as follows:

“Pursuant to a loan agreement dated on or about 7 December 2020 between the Caveator and the Caveatee charging the Property as security for repayment of the Loan.”

137. On 17 June 2024, Ms Todd served a lapsing notice. No application was made to extend the caveat and so it lapsed. However, Mr Irwin caused a caveat in identical terms to be lodged on 5 December 2024. No lapsing notice has been lodged in respect of that caveat and, as such, it remains on title.

138. The current caveat is in identical terms to the caveat which lapsed. It should never have been lodged without leave under s 74O of the Real Property Act 1900 (NSW). The plaintiff accepts that it should be removed.

139. Despite the admitted defect in the current caveat, the plaintiff presses its claim for a declaration that it has a caveatable interest in Ms Todd’s apartment. Its case in this respect was slim. Not only have I rejected the argument that the loan agreement was governed by the terms of the draft loan contract, but that contract itself contains no words capable of granting a security interest. It goes no further than to contain a definition of ‘Security’, as follows:

“Security means any security interest, pledge, encumbrance or charge provided by the Borrower in relation to the following collateral or property:

The Borrower’s Property:

[XX] Boundary Lane, Tweed Heads, NSW 2485

Registered Plan: Lot 4 Plan SP 86350

Folio Identifier 4/SP86350”

140. This language is insufficient to grant a security interest, even if the document had been executed. The language is definitional and encompasses any number of potential kinds of security interest, none of which is otherwise mentioned in the document.

141. The plaintiff sought to avoid this difficulty in closing submissions by advancing an argument based on proprietary estoppel. This argument was quite outside the pleaded case. The argument was that Mr Irwin had only ever advanced funds on the basis of a promise that Ms Todd would grant him security in the apartment and that he had relied to his detriment on this promise. It was submitted that the unconscionability of Ms Todd resiling from her promise to grant security attracted the principles discussed of proprietary estoppel discussed by the plurality in Kramer v Stone [2024] HCA 48; (2024) 421 ALR 106 at [40].

142. To the extent the submission was an application to amend the pleading, I reject it. I would in any event have rejected the substance of the submission. I have found that the parties had already reached a general agreement about a loan arrangement during May. Even accepting that Ms Todd promised to provide security, the plaintiff continued to advance money under the loan agreement even after Ms Todd had failed on several occasions to provide such security. Mr Irwin was aware of the difficulty at the time and pressed Ms Todd on the issue. Nonetheless, he continued to advance funds knowing that the promised security was not forthcoming. Even when he presented her with a draft contract in December 2020, the document failed to include a grant of security, although he may have believed it contained one.

143. In my view, there was nothing unconscionable about Ms Todd failing to grant security in these circumstances. A claim for relief based on a proprietary estoppel would fail.

144. I would therefore not make the declaration sought by the plaintiff in paragraph 2 of its statement of claim. I would instead make the orders sought by the defendant in paragraphs 1, 3 and 4 of the cross claim. There is no utility in declaring the caveat to be ‘invalid’ pursuant to paragraph 2 of the cross claim in circumstances where I will otherwise order it to be withdrawn.

145. However, there is a more fundamental difficulty with the plaintiff’s claim for a declaration. The statement of claim in these proceedings was filed on 14 April 2023. At that time, the plaintiff’s original caveat was on title and no lapsing notice had been served. Furthermore, at the time of the final hearing, a further caveat, even though admittedly defective, remained on title. The statement of claim filed by the plaintiff only seeks a declaration that it has a caveatable interest in the defendant’s apartment. It seeks no final relief in relation to the underlying charge or security interest. In these circumstances, I would not make a declaration that the plaintiff ‘has a caveatable interest’ in the property for the reasons explained by Black J in Stonebark Pty Ltd v Disage Pty Ltd [2022] NSWSC 1015 at [22]-[24].

Orders

146. The orders will be as follows:

147. Judgment for the plaintiff in the sum of $121,660.43.

148. Declare that the plaintiff has no caveatable interest in the property known as [XX] Boundary Lane, Tweed Heads NSW 2485.

149. Order that the caveat dealing number AS649496 (the caveat) be withdrawn.

150. Order the plaintiff to pay any costs associated with the withdrawal of the caveat.

151. Direct the parties to file and serve submissions and any evidence in relation to costs on or before 4:00PM on 9 April 2025.

152. Direct the parties to file and serve any submissions and evidence in reply in relation to costs on or before 4:00PM on 16 April 2025.

**********