Is the claim statute barred?
18Even if Kation had succeeded in establishing an agreement in the terms alleged, in my opinion, the claim to recover $250,000 under that agreement was statute barred at the time this proceeding was commenced.
19Section 14 of the Limitation Act 1969 (NSW) provides that an action on a cause of action in contract "is not maintainable if brought after the expiration of the limitation period of six years running from the date on which the cause of action first accrues to the plaintiff ...".
20Section 54 of the Act relevantly provides:
(1) Where, after a limitation period fixed by or under this Act for a cause of action commences to run but before the expiration of the limitation period, a person against whom (either solely or with other persons) the cause of action lies confirms the cause of action, the time during which the limitation period runs before the date of the confirmation does not count in the reckoning of the limitation period for an action on the cause of action by a person having the benefit of the confirmation against a person bound by the confirmation.
(2) For the purposes of this section:
(a) a person confirms a cause of action if, but only if, the person:
(i) acknowledges, to a person having (either solely or with other persons) the cause of action, the right or title of the person to whom the acknowledgment is made, or
(ii) ...,
...
(3) ...
(4) An acknowledgment for the purposes of this section must be in writing and signed by the maker.
...
21Kation submitted that the limitation period in respect of the claim for $250,000 had not expired at the time the proceedings commenced for two reasons. First, it submitted that the cause of action did not accrue until the date the final profit distribution was made, which was after 30 June 1997, or alternatively on demand, which was not made until 19 July 1996. On either view, the proceedings were commenced within six years of those dates.
22Secondly, Kation submitted that Lamru acknowledged that it was indebted to Kation in respect of the loan by the document entitled "Settlement" dated 28 June 1996 and the document dated 3 June 1997 that Mr Lamb prepared in connection with the proposal to sell his interest in Nortex to Mr Mark Lewis and that consequently it is entitled to the benefit of s 54 of the Limitation Act.
23In my opinion, neither of these submissions has any merit.
24An agreement that a certain amount will be repaid out of the future profits of a business in a manner to be agreed must, in the absence of further agreement, be interpreted as an agreement that the amount would be paid as and when those profits were distributed. It cannot be interpreted, as Mr Johnson submitted, as an agreement that the money could be repaid at any time while the business earned profits, since it would not be known whether profits would be earned in the future or not.
25Paragraph 17 of the amended statement of claim, which is admitted, pleads (in part) that the following amounts were distributed to Lamru from the profits of the business of the Trust for the financial years ended 1991 to 1993:
1990/91 $96,605.00
1991/92 $207,876.00
1992/93 $441,608.00
The profits in the first two years alone were sufficient to repay the loan of $250,000. In the absence of some further agreement, on Kation's case, the loan was repayable in those years. On that basis, the 6 year limitation period for recovery of the $250,000 had clearly expired by the time this proceeding was commenced.
26In my opinion, neither the document dated 28 June 1996 nor the document dated 3 June 1997 amounts to an acknowledgement by Mr Lamb or Lamru that one or other of them owed Kation the sum of $200,000, let alone the sum of $250,000.
27As I have said, the document dated 28 June 1996 was prepared as a settlement proposal. Also as I have said, Mr Lamb gives evidence, which I accept, that the reference to the $200,000 was a reference to a composite amount that Mr Lamb was prepared to agree to as owing by him in respect of various claims made by Mr Lewis. In those circumstances, the note cannot be treated as an acknowledgement by Mr Lamb or Lamru that either of them owed Kation the sum of $200,000 in respect of the claim pleaded by Kation.
28The same is true of the document dated 3 June 1997. That document sets out an offer that Mr Lamb made to Mr Mark Lewis. As I have said, the document is not an acknowledgement that Mr Lamb or Lamru owed Kation the sum of $200,000. It is equally consistent with the document that the amount has been paid. Moreover, the document suggests that the amount was paid or was payable to Mr Dufty. Lastly, the document could not be regarded as an acknowledgement to the person who has the cause of action (that is, Kation). Rather, it was a statement to Mr Mark Lewis in connection with a proposal that Mr Lamb sell his interest in Nortex to him.
29In addition to these matters neither the document dated 28 June 1996 nor the one dated 3 June 1997 was signed by Lamru or Mr Lamb as required by s 54(4) of the Limitation Act.
30A document is normally "signed" by a person if the person affixes his or her name or mark to the document for the purpose of adopting or authenticating the document: see Geo Thompson (Australia) Pty Ltd v Vittadello [1978] VR 199 at 218 per Menhennitt J. In the case of a corporation, it includes the signature of a person who has authority to sign the document on the corporation's behalf, which Mr Lamb undoubtedly did in the case of Lamru: s 127 of the Corporations Act 2001 (Cth).
31In the case of contracts for the sale or other disposition of land, the requirement, which is now imposed by s 54A(1) of the Conveyancing Act 1919, that there be some memorandum or note of the agreement in writing "signed by the party to be charged" has been interpreted as being satisfied where the person's name has been included on the document and the person or his or her agent has expressly or implicitly represented that the name can be treated as a signature. For example, in Leeman v Stocks [1951] Ch 941, Roxburgh J found that a contract had been signed by the vendor where an auctioneer had simply inserted the vendor's name in the contract and given it to the purchaser to sign. In reaching that conclusion, his Honour said (at 949):
... when the auctioneer obtained the purchaser's signature, neither the purchaser nor the auctioneer, acting on behalf of the vendor, ever intended any other signature to be added. It was the intention of both the purchaser and the vendor's agent, the auctioneer, that this should be the final written record of the contract.
However, the principle applied by Roxburgh J has no application "to any document which is not in some way or other recognizable as a note or memorandum of a concluded agreement": Pirie v Saunders (1961) 104 CLR 149 at 154. The basis of the principle appears to be that where a party intends a document which includes his or her name to be the final memorandum of the contract binding the vendor and the purchaser, he or she cannot escape from the contract by claiming that it was not signed.
32A similar principle has been applied to cases under s 54 of the Limitation Act. For example, in McGuren v Simpson [2004] NSWSC 35, Harrison M held that the defendant had acknowledged a preexisting liability to account to the plaintiff for money she had received when she sent an email which said "Yes, I spent the money and I shouldn't have". The defendant's name appeared in the "From" field of the email. Harrison M concluded that that was sufficient to be a signature for the purposes of s 54. In reaching that conclusion, her Honour said (at [22]):
As [the defendant's] name appears in the email and she expressly acknowledges in the email as an authenticated expression of a prior agreement, the email is recognisable as a note of a concluded agreement
33Whether the principle in Leeman v Stocks can be applied in those terms to cases under s 54 of the Limitation Act is open to some doubt. The claim in McGuren did not depend on characterising the email as a note of a concluded agreement. Rather, it depended on whether the defendant had confirmed the cause of action. In my opinion, it would be preferable to focus on the (objective) purpose for which a person's name is added to the document. If a person inserts his or her name on a document which is an acknowledgement of the type contemplated by s 54(2) of the Limitation Act and if the name was inserted for the (objective) purpose of adopting the acknowledgement, then in my opinion it can be said that the document was signed by the person for the purposes of s 54(4). That is because, by including his or her name, the person intended to adopt the document, which is the very purpose for which a signature is required.
34However, even accepting that principle, neither of the documents relied on by Kation was signed by Mr Lamb or Lamru. Lamru's and Mr Lamb's names appear on the document dated 28 June 1996. However, it is clear that those names are simply headings to columns which identify amounts payable to or by them. There is nothing to suggest that the names were included for the purpose of acknowledging Kation's right or title to any of the amounts shown on the schedule. Rather, the names were included for the purpose of explaining a proposal that Mr Lamb was willing to accept in order to reach a settlement with Mr Lewis.
35Lamru's name does not appear on the document dated 3 June 1997 at all. Mr Lamb's initials do appear on the document. But again, the initials form part of the heading to two columns. There is no basis for thinking that they were included for the purpose of acknowledging the claim that Kation makes in these proceedings. As I have said, the columns appear simply to identify the amounts that Mr Lamb claims he has paid or incurred to acquire the interest in Nortex that he was proposing to sell to Mr Mark Lewis.