Trajcevski v Mason

1. Was there an intention to create a legally binding agreement or agreements?
2. The defendant relied upon Voce v Deloraine [2012] NSWSC 1187 for the proposition that it is a major hurdle for a plaintiff in a domestic relationship to demonstrate in that context there was a mutual intention to contract and that monies paid out would be recoverable by legal action. The principle has its origin in Balfour v Balfour [1919] 2 KB 571, which held that there can often be a presumption of fact deriving from the experience of life and human nature that men and women in marriage or marriage-like relationships do not intend to create legal rights and obligations but intend to rely solely on family ties of mutual trust and affection. Ward J in Darmanin v Cowan [2010] NSWSC 1118 described it as a rebuttable presumption of fact.
3. Here I think that presumption has been rebutted by reason of the history of the parties and the conversation they had about the sharing of expenses, as well as each relevant conversation, and where applicable, documentary assistance. It is also of assistance that the parties did an accounting down to the last cent of a number of the transactions which were raised in the statement of claim but dropped in the amended statement of claim. Those largely occurred before the second and subsequent loans sued upon. It is apparent from Mr Mason's affidavit that on a number of occasions he made a detailed calculation and obtained a repayment of precise amounts. When it came to holidays with the children they got down to the level of calculating a 60%/40% breakup on the basis that one party had two children and one party had one child. The context and background that the parties had had problems in the past with earlier partners and divorce, were both in somewhat difficult financial positions and had expressly agreed to evenly split expenses, is suggestive that where lump sum amounts were given from one party to the other they were not seen as gifts or merely debts of honour but were seen as loans which would be repaid. That is so even accepting that no one expected that it would be necessary to sue, the plaintiff trusted the defendant to meet his obligations and didn't want to unduly harass him for early repayment if he wasn't in a position to do so. That is the evidence of the plaintiff and I accept it. Ultimately it is the objective words and events, in their context that matter, not the parties' subjective uncommunicated intentions: Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165.
4. I do not accept the defendant's evidence that these were only debts of honour. Largely that evidence was of uncommunicated belief. He conceded he would use words like "are you able to spot me" or "can you cover me". In their setting these were objectively agreements to repay the amounts advanced.
5. I deal further with each alleged loan below.

2. Is the evidence sufficiently clear to justify the finding of the contracts?
3. The defendant submits that there is not sufficient proof of the agreement based on the evidence in relation to each of the 10 claims. He points out that the court must feel an actual persuasion of the existence of a contract and that conversations must be proved to the reasonable satisfaction of the court. Often, as was pointed out in John Holland Pty Ltd v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451, a party may face serious difficulties of proof where there are no reliable contemporaneous records. Because the plaintiff has chosen to plead the case as 10 different contracts it is necessary to analyse the evidence on each of the 10 claims.
4. The parties were in a domestic setting and did not expect to be proving matters in court. It is not a commercial setting where formality may be more readily expected. I also note the concessions of both parties that their memory is weak after this length of time. I also bear in mind the onus is on the plaintiff.
5. The first claim is for items 1, 2 and 3 and is for $3,500 advanced in three amounts, being $1,500 on 20 December 2008, $1,500 on 23 December 2008 and $500 on 29 December 2008. On 23 March 2009 an amount incorporating the $3,500 was paid by the defendant to the plaintiff and credit is given in the claim. In one sense therefore this loan is not really in issue however I think the facts assists in determining the background and surrounding circumstances in relation to the subsequent loans.
6. The plaintiff's evidence is that the defendant called her on 20 December 2008 (bearing in mind this is before they were cohabiting) and said he was a little short of cash and could he borrow $3,500 and added "I promise to pay you back". She said "Ok. But please make sure I get the money back as soon as possible." She made the payments that I have described above and they can be seen in her bank account with the notations "Payment Greg" on each of the three occasions. She then says that on 23 March 2009 he electronically transferred $4,791.35 in repayment of the loans. The notation in the bank statement is "Payback from Greg". The explanation of the figures is found in an email from the defendant dated 20 March 2009, which makes a series of calculations for personal sharing of expenses or reimbursements. The defendant's affidavit says that he received the three payments and repaid those amounts. I note he did not swear an affidavit in reply denying the conversation. In cross examination after initial reluctance he agreed the $3,500 was a loan and in that case at least she lent him the money at his request and he repaid it. He said it was agreed that he was waiting for some money to come in and when it did he would repay the money and he did so. I find that loan proven, but it has been repaid as the plaintiff conceded. I find the concession that the round amount was a loan helpful as background in assessing later alleged loans.
7. After that the parties moved in together and agreed to split joint expenses. They did open a joint account for that purpose.
8. The next claim is number 14 (several claims were dropped as indicated above) and is $1,500 on 5 November 2009. The plaintiff's evidence is unsatisfactory in relation to this amount. Perhaps because the previous paragraphs were not read, the evidence does not make a lot of sense. The evidence in support simply says "I also arranged for the electronic transfer of two further amounts to the defendant's Amex account for the defendant's Universal Events fees as follows (a) 16 October 2009 - $1051.69 and (b) 5 November 2009 $1500." Subsection (a) (in italics above) was not read. I note that previous claims for reimbursement of fees relating to Universal Events were dropped and the plaintiff admitted she was in error in claiming them. It appears she initially assumed she was lending the defendant his share of those fees, when in fact she was reimbursing him for her share which he had paid on her behalf on his credit card.
9. There is a bank statement which demonstrates that $1,500 was paid on that day from the plaintiff's account to American Express via Bpay. That amount is credited to the defendant's Amex account on that day. He agrees that he received a payment on that day into his account from the plaintiff but doesn't provide any evidence beyond that on that transaction. I do not think the evidence about that alleged loan is sufficient for me to be persuaded that it was a loan. There was general evidence given by the plaintiff to the effect that there were many occasions on which she was asked for money and her practice was to agree to provide a lump sum as requested after receiving his confirmation that he needed it and it would be repaid. There is also the evidence of the first loan, which was accompanied by an admission. As will be seen there is better evidence of some of the other loans but I think plaintiff to succeed has to provide better evidence than that she simply arranged the electronic transfer of an amount for "Universal Event" fees, particularly when there is no evidence that the fees were in fact for his benefit, and she had abandoned a number of other claims about fees relating to payments concerning that company. I reject that claim.
10. The next claim is number 15 and is for $4,993.45 on 10 November 2009. The plaintiff's evidence in support of this loan was that they had a conversation where the defendant said "I have spent the client's money on other business expenses and now can't pay the printer for the job. Can you spot me?" She replied "okay". There is a bank statement in evidence that she paid $7,096.83 to the Amex card of the defendant. The defendant's Amex statement of account shows a credit in the same amount.
11. The defendant's evidence is that at this time he had a conversation where he said "I'm having a bad month. I don't think I will have enough to cover the Amex bill" and she replied "To get you [out] of a spot I can pay the rest of my Universal Events (UE) course fees now with some of the money from the settlement from my ex-husband". He then says that the payment wasn't comprised solely of the UE course fees but he believes it would have been two or three course fees.
12. There was some other evidence that they were doing a course together and sharing the expenses although he may have been doing more of the courses than was the plaintiff. In any event there is in evidence Universal Events seminar fees payments by the defendant on his card of $2,421.33 on both 23 December 2009 and 23 January 2010. A number of the claims of the plaintiff which were dropped relate to seminar fees, on the basis that payments she made in a regular amount of $1,051.69 during 2009 were reimbursements by the plaintiff to the defendant of the fees for both of them which he had put on his American Express card. I think it is safe to accept his admission that part only of the money advanced were payments by her to him in advance for fees and therefore if the $7,096.83 payment was otherwise a loan, that loan would be reduced by $2,421.33 being the plaintiff's 50% share of the seminar fees for December 2009 and January 2010. Whilst her recollection was that the money was for his business expenses, he was prepared to admit that he needed the money to cover his Amex bill because he was having a bad month. That may have been due to one or more business expenses, or personal expenses, or a combination. He appears to have used the Amex card for both. The detail of the source of his debts is not important. I proceed on his admission that he was receiving the money to get out of a "spot" and therefore was borrowing the $7,096.83 less course fees of $2,421.33, being the plaintiff's half share for two courses coming up. Accordingly I find the balance was a loan. I note that there were some further course fees in irregular amounts in later months, but the defendant has not sought to tie those fees to this advance. I think the evidentiary onus on this loan shifted to him, and he did not discharge it beyond the two regular course fees I can identify. The amount lent is $4,675.50, being $7,096.83 less $2,421.33.
13. The next claim is number 18 and is for $4,000 paid on 25 February2010. The plaintiff's evidence is that the request and terms were in similar terms to the previous loan, that is, a request for her to 'spot' him. There is evidence that the amount of money in question was withdrawn from her bank account and paid to the American Express card. The defendant provides no response to the suggestion that he asked the plaintiff to "spot" money to him. If he wished to deny that he could have done so in an affidavit in reply. If he wished to say that the Universal Events seminar money paid by him on his card in February was somehow half the responsibility of the plaintiff or the $4,000 was partly rateable to that, he would have said so. I think the natural meaning of the words "can you spot me" is a request for a short-term loan. I find that loan proved.
14. The next claim is number 19 and is for $1,477 on 22 March 2011. The plaintiff's evidence is that there was a conversation where he asked to borrow from her his rent owed that week and said he would pay her back when he could. She says she agreed. Her bank statement has the notation "FNDS TFR GREG RENT" I find that corroborative that it was for his rent. He says in his affidavit that the money went into the joint account and it was "Natalie covering my half of our monthly rent". In cross examination he agreed that she lent him that money for that month and that it was an unpaid loan. I take that loan as having been admitted.
15. The next claim is number 20 and is for $3,000 on 2 August 2011. The plaintiff's evidence is that there was a conversation when the defendant asked to borrow $3,000 and said he would pay her back "when I can… please Nat. I'm desperate". She replied "Alright but I need this money repaid soon". In her bank account the transfer is described as "short term loan". That notation is of assistance in corroborating her version. The defendant's affidavit says that he does not recall receiving the $3,000 payment in question but then in the next paragraph says that on 10 December 2011 he transferred $500 out of his personal bank account to the plaintiff. I note he did not swear an affidavit in reply denying the conversation. In cross examination he agreed the $500 was a part repayment of a loan. It came from his account. In cross examination he conceded it was a loan, but it was argued that the money was a debt of the defendant's deregistered company. While it may have received the money, it was a loan requested by him and paid at his direction. He was the sole shareholder and director. I also note this was not pleaded as a Defence, and was part repaid by him personally. In all those circumstances I think the plaintiff has discharged the onus of proof and this loan is proved.
16. The next claim is number 21 and is for $500 on 5 June 2012. The plaintiff gives evidence of a conversation in which she is asked "Can I borrow $500. I'll pay you back soon" and she agreed. Her bank account has a notation "FNDS TFR GREG". The joint account records the depositing of that amount with the same notation. The defendant records that information without comment in his affidavit. He does not deny the conversation or make any suggestion as to why the money was put into the account with that indication. The joint account records that on that day the balance was $2.01 and returned to that balance on the same day when $500 was withdrawn. I infer from all the evidence that he received that money. It would not make sense for her to have put the money into the account with the word "Greg" on it and then withdraw the money again on the same day. I find the loan proved.
17. The next claim is number 22 and is for $1,200 on 2 August 2012. The plaintiff's evidence is that the defendant said "Can I borrow some money… $1,200. I promise I'll pay you back". The description in the bank statement of the plaintiff is "Short term loan". The defendant's evidence is that the money was transferred back on 7 August with the words "TFR loan repaid". The statement of claim gives that credit. He conceded in cross examination that money was lent and he repaid it. Accordingly I find the loan proved but will also give the agreed credit.
18. The next claim is number 23 and is for $2,000 on 13 August 2013. The plaintiff's evidence is that there was a conversation to the effect "Can I borrow some money… $2,000. I'll pay you back as soon as I can". The transfer is recorded in her bank statement with the notation "Payment Greg". The notation in the joint account into which it was paid is "Payment Nat money". One day later there is a withdrawal described as "FNDS TFR short term loan". The defendant records in his affidavit the payment of $2,000 into the joint account without any commentary of any kind. I think the overwhelming inference from the joint account is that the deposit was money which was withdrawn by the defendant and treated as a short-term loan. In cross examination the defendant prevaricated as to this loan, initially conceding it and then withdrawing the concession. About two weeks later on 26 August 2013 the defendant transferred $500 to the plaintiff with the words "Part Repay Loan". That amount is treated as a credit in the Amended Statement of Claim. I find the loan proved and the agreed credit should be given.
19. The final claim is number 24 and is for a loan of $1,000 on 22 July 2014. The evidence is that again the defendant asked "Can I borrow some money. I only need it for a couple of days and will pay you back soon… $1,000". The defendant's bank statement records a transfer of $1,000 with the words "Tfr Greg & Nat' nat loan". The joint account has a deposit with a different notation "TFR Natalie Sav nat". The defendant denies that the payment was a loan but doesn't give any more details or information. The plaintiff's bank statement two days later on 24 July has a credit of $1,000 with the notation "payment loan reay [sic] 24". That must have been made by the defendant. In my view that is a clear admission that the money was a loan and was being repaid. The plaintiff gives credit for the repayment. The defendant admitted the loan in cross examination. I find the loan proved but the agreed credit is applicable.

Summary

1. The plaintiff's balance of claim was $16,470.45, however that claim, based on the above analysis, has to be reduced by firstly the failed claim 14 of $1,500 and secondly the amount by which claim 15 has to be properly reduced, which is $317.95 understated in the claim. Accordingly the amount outstanding will be $14,652.50.
2. Subject to the other defences to which I will come, I therefore find that the above amounts were lent and are recoverable.
3. For completeness I note the submission that the defendant, when admitting to loans in the oral evidence referred to above, may have intended to refer to loans not repayable, i.e. debts of honour only. I do not accept that submission as I think he was agreeing to loans in the context on most occasions that he had repaid them, but I think the evidence is sufficient on each of the above loans, even without the admissions I have referenced above.

3 Are the terms void for uncertainty

1. The defendant argued that the contracts were void for uncertainty largely as I understand it because the conversations were insufficiently specific in relation to when the money would be repaid. The conversations in relation to each loan were, on the evidence that I accept, to the effect of one of the following: 1. I promise to pay you back (or as soon as possible) - claim 1 (repaid) 2. Can you spot me - claim 15 and 18 3. I'll pay you back when I can - claim 19 4. I'll pay you back when I can (or it will be repaid soon) - claim 20 5. I'll pay you back - claim 22 (repaid) 6. I'll pay you back as soon as I can - claim 23 (part repaid) 7. I only need it for a couple of days and I'll pay you back soon - claim 24 (repaid)
2. The plaintiff conceded these are not reliable indicators of actual words on actual dates, but I accept words to that effect were said.
3. I think that all of those mean either that the amounts are to be paid back within a reasonable time, or alternatively if the language as to time is insufficiently certain at law to be enforceable, that they are repayable on demand. Contracts which are repayable on demand at law are repayable without an actual demand and simply when sought, if necessary by commencement of proceedings (Ottavio v Hayvio Pty Ltd [2011] NSWSC 1125 at [11]. A reasonable time has expired. On either view, the money is owing.
4. As there was no term in relation to interest it has not been sought except from commencement of the claim. Accordingly the defendant is indebted to the plaintiff for the amounts of the money owing, together with interest since filing the claim.

4 If there was a term that the amounts were repayable when the defendant could afford it, that time has not arrived

1. The findings above make this issue inapplicable.
2. Several of the words quoted above do refer to payment "when" or "as soon as I can" (claims 19, 20 and 23). In my view that meant objectively within a reasonable time.
3. If I am wrong, and those words mean he did not need to pay the loans back until he could afford to do so, I think that would carry an implied term to make all reasonable efforts to do so. I do not think it could be said that the defendant over the last 3 years has been entirely unable to repay either the outstanding loans where those words were used ($6,477 less part repayments), or even all the loans outstanding, i.e. $14,652.50. He has a current excess of income over expenses of $221 per month and has allocated his monthly income to optional expenses such as gym membership. He has travelled. Yet he has not paid back any money at all. Also he borrowed over $20,000 to refinance creditors and could have included the plaintiff amongst his refinanced obligations at least in part. Having breached the contract to repay on the terms agreed, in my view there is an implied term that the balance would become owing.
4. For the above reasons I will order that the defendant pay to the plaintiff $14,652.50, together with interest pursuant to section 100 of the Civil Procedure Act 2005. I will hear the parties on costs. Magistrate R Brender Downing Centre Local Court 31 July 2017

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