Lee v Di Carlo [No 3][2024] QDC 97

DISTRICT COURT OF QUEENSLAND

Pleadings

1. [1]
   The plaintiff’s claim is for the sum of $240,000. It is alleged in the statement of claim that the plaintiff loaned the defendant a total sum of $290,000 at his request: the sum of $130,000 on 2 April 2015, the sum of $70,000 on 2 July 2015, the sum of $40,000 on 28 July 2015 and the sum of $50,000 on 23 December 2015. It is alleged that the agreements for the loans of $130,000 and $50,000 were oral, and the loans for the other amounts were partly oral and partly written; to the extent that the terms were handwritten by the defendant in the plaintiff’s diary. The oral agreements were alleged to have taken place at 932 Stanley Street, East Brisbane. It is alleged that the sum of $70,000 was to be repaid within five months, but otherwise the agreement was that the sums be repaid within three months.
2. [2]
   It is alleged that the defendant repaid a total amount of $50,000 by way of a payment of $20,000 on 16 August 2016, $10,000 on 1 August 2017 and $20,000 on 16 September 2017. It is also alleged that the defendant paid to the plaintiff a total amount of $20,000 in payment of interest on the loan; being $16,500 paid on 24 June 2016 and $3,500 paid on 25 June 2016. 
3. [3]
   The defendant denies the plaintiff lent any money to him. He says instead that there was an agreement between them that they would pool money together for the purpose of making loans to third parties. Apart from stating in the defence that he believes that the plaintiff advanced the sum of $130,000 in 2014 for the purposes of three loans to third parties (in the amounts of $30,000, $40,000 and $60,000 respectively), the defendant does not admit the amounts or dates of the payments by the plaintiff to the defendant pursuant to the agreement. His explanation for the non-admission is that his records recording the same are no longer in his power or possession. 
4. [4]
   The defendant says that any payments by the defendant to the plaintiff were pursuant to the agreement and were made following the repayment of loans by third parties.  The defendant says that he is unable to admit the dates and amounts of any payments as his records recording the same are no longer in his power or possession. 

Course of the trial

5. [5]
   The plaintiff gave evidence. At the end of her evidence-in-chief, counsel for the defendant indicated that he wished to make a no case submission without being put to an election. It was submitted that the plaintiff’s evidence did not support her pleaded case, but that of the defendant’s case or some other case not pleaded. I required the defendant to make an election before hearing the application at any length.^[1] The defendant made an election to go into evidence and counsel for the defendant proceeded to cross-examine the plaintiff.  At the close of the plaintiff’s case, counsel for the defendant informed the court that the defendant would not call or give any evidence; though the defendant was present in court for much of the time.

6. [6]
   The resolution of the dispute accordingly comes down to the oral evidence of the plaintiff, and deciding whether it proves that there was an oral agreement for a loan between the two as she alleged, or whether the agreement was that the plaintiff and defendants’ funds would be pooled for the purpose of being lent to third parties as the defendant alleged in his pleading. Counsel for the defendant submitted that, on the evidence, there was a third possibility and that is that the plaintiff lent money to third parties with the defendant agreeing to guarantee the repayment; such a scenario not only not being pleaded, but also unenforceable by reason of it not being in writing. 
7. [7]
   It is accordingly necessary to examine the evidence of the plaintiff in some detail.

The plaintiff’s evidence-in-chief

8. [8]
   The plaintiff came to Australia from Korea in 2006 to study English. After she completed her English course, she attended a hairdressing school. She worked at a hairdressing salon and then also began doing hairdressing at home after she finished her day work at the salon. The plaintiff said she first met the defendant when he came to her home for a massage around 2009. The plaintiff said they built up a friendship from that time.
9. [9]
   The plaintiff said that around 2011 her mother visited her from Korea and suggested that they should buy a house. The plaintiff said in around November 2011, after her mother had left, she opened a safety deposit box at NAB (National Australia Bank) at Stones Corner. She said she put some money she had saved into the safety deposit box, and then subsequently put some money she received from her family in Korea into the box. In total, she received approximately $150,000 from her family.  When asked what she did with the money she said, “Some money went to Sam”. 
10. [10]
    The plaintiff was asked what interactions she had with the defendant about the money in the safety deposit box. She said she had several conversations with the defendant in early 2014 about her having money for a deposit for buying a house.  She said the defendant told her it was not a good time to buy a house for investment. She said that the defendant talked to her about lending money. 
11. [11]
    Asked what happened after that, the plaintiff said:

“After that, he said he had a word with his client. He ask me if he lent some money, I can give you – they can give you interest. And we had several conversations similar and then I ask – I ask him, “I don’t know your client. How can I trust him?” I’d never seen them. “Oh, you don’t need to know them. You’re dealing with me. If they don’t pay me, I’ll pay you back. Don’t worry.’ So I confirm I lending money to Sam, not his client.”

12. [12]
    Shortly afterwards the following exchange occurred between the plaintiff and her counsel:

“Can you just go a bit slower?---Sam suggest if I lend money to his clients, I can make money. I can get interest and only short time, short term. He   mentioned three months. 

And what did you say?---I said, ‘I don’t know your client. How can I trust him? I don’t any of – no information. Never seen them. I don’t know their name. I don’t know whether even they’re in Australia or a contact number. How can I trust them? How can I lend the money to someone I never met?’ He said, ‘Don’t worry.  They’re’ - - - 

That’s what he said?---Yeah. Sam said, ‘Don’t worry. They are my – they are my client. You’re only dealing with me. If they don’t pay money back, I’ll pay you money back.’”

13. [13]
    Asked what happened after that, the plaintiff gave this evidence:

“And I still remember what he told me. “Pam, you’ve got to try to – one day, you – you have to trust someone – these special friends who trying to help you out. We can make some – we can make money out of the – the money as interest.” So one day, after I confirm his clients – it – who was the – or – or the description by Sam. I don’t need to worry about them much, because Sam was the guarantee and pay me back, so I don’t need to worry about them – who they are, where they live, what they do, nothing, because Sam is the one who guarantee me – pay me back, and – okay, and especially when he told me short time – three month – okay. And if there’s [indistinct] it’s like he didn’t tell me, like, a – one year or two years’ time, because I know what I was going to do. If I find some property I really like, I want to be ready, but he said, “Don’t worry. If we  – you want money back tomorrow, I can even pay you money back. This is not – it might be big money for you, but it’s not really big money for me. I’ve got a – a fancy car.” If – he said it’s 100,000. He had the – several car, and he show me the several Rolex watches which it – a diamond in it, and he – the property where he lives, it’s all – and when he show me the diamonds, it’s about all wealthy people.  It’s not like me and my family. So I trusted him, and I saw the gold [indistinct] gold statues. He’s – I [indistinct] he’s not a poor guy, and especially when I – I found out he is a high-profile barrister – why I don’t trust him? He’s a lawyer. 

Ms Lee, all right. You’ve given – you’ve given your evidence in relation to what was said between you and him. What did you do then?---And I made a decision to lend him money.”

14. [14]
    Later the plaintiff said they went to the bank and took out $76,200. The plaintiff said that the defendant counted it. Asked what was discussed about the defendant taking this money, the plaintiff said that he told her that she could make extra money by lending the money to his client and said that she could make 10% interest. She said that the defendant told her the period of time to lend him the money was three months.
15. [15]
    The plaintiff gave evidence that on 24 December 2014 the defendant visited her where her family were staying. When asked why, the plaintiff said:

“He told me he was going to pay me interest within – in a month and he also want increased money up to 130,000 and he want to reborrow. So I wrote down at the back of my diary about the conversation between Sam and me when he ask me – wanted increased money up to 130. I ask him, ‘Why do you need that much money?’ He told me he had a three client want – need 30,000. Second with 60,000, and third client want – need 40,000.”

16. [16]
    The plaintiff gave evidence that she agreed to loan the defendant $130,000 and wrote the conversation down in her diary. The diary entry records the date and then says:

“Different people one 30, one 60, one 40. = total 1,30,000 one hundred thirty thousands for 3 months 15% interest.”

17. [17]
    The plaintiff said that to make the payment, she went to the bank to withdraw some money, used other money her family had brought with them to Australia and used some cash she had from her business.  Asked further about the purpose of giving the defendant the money, the plaintiff said:

“I just talk to Sam. He come from the – he’s going to pay me money back as guarantee, but he mention that he will give the money – he will lend the money to three clients, and then he told me the amount from - for each client.”

18. [18]
    The plaintiff gave evidence that on 2 April 2015 the defendant brought an envelope to her which stated on it the date and the amount of $3975 as interest on $60,000, $35,000 and $30,000. The envelope with those notations was received in evidence. The plaintiff said that the defendant asked to reborrow $130,000. Asked what he said, the plaintiff said that he wanted to reborrow $130,000 and interest at 12 per cent. She said that she agreed to that request.  She said the loan was for three months.
19. [19]
    The plaintiff gave evidence that the defendant took the money on 2 April and she made a note in her diary to this effect. The plaintiff said that when he next visited, she asked him to write down the amount and interest and provide his signature. That was on 16 April 2015. There is a notation in the diary with that date, the amount of $130,000 and the interest rate of 12%.
20. [20]
    The plaintiff said that on 2 July 2015 the defendant collected $70,000. When asked why she gave him the $70,000, the plaintiff said it was because the defendant promised her interest. The plaintiff said that the interest rate was 12%. The plaintiff accessed her safety deposit box on 2 July 2015 and said that she withdrew $40,000. The plaintiff also withdrew $30,000 from her bank account on that date. The plaintiff said that the defendant wrote an entry in the back of her diary with his signature stating: 

“Loan $70,000 Pam to Sam 

on 2^nd July

Repayable within 5 months

+ 12% interest per annum” 

21. [21]
    After making that loan, the plaintiff said that the defendant came back asking for another $40,000. There is a note at the back of her diary which she said was in his handwriting and signed by him and dated 28 July 2015. It stated:

“Loan Pam to Sam 

$40,000 for 3 month @

12% interest per annum.”

22. [22]
    There was also an additional note underneath it, also said to be in his handwriting and signed by him, which stated:

“Pam Does not wish to participate in this lending business anymore as of the date of 28/7/15 and as such other than what has already been lent. She will not lend anymore. Unless the bond matter is resolved.”

23. [23]
    When asked originally about the $40,000 the plaintiff said:

“After I loaned the 70 grand to Sam, I probably told him I don’t want to lend you any more money. It become 200,000 – too much. And obviously, he said yes, and then, after that, he came back, and then he asking another 40,000, and then, you know, it was hard – it was hard – refuse – especial when I had a good relationship with Sam. After 40,000, I lending him – I lending him 40,000 after – right after. I ask Sam to write down, ‘I don’t want to – repeating to refuse the – your cash – with cash again and again. Can you please write down I don’t want to lend you any more, so when you come next time, I don’t want to repeat to you. I just want to show you what you promised on the diary.’ And he wrote down whatever his word, but I told him, ‘I don’t want to lend you anymore. It’s getting too stressful.’”

24. [24]
    When asked about what conversation had occurred, the plaintiff said that she could not remember.
25. [25]
    The plaintiff said that in December 2015 the defendant requested to borrow another $50,000. The plaintiff said that he was almost begging her saying, “Could you please lend me another $50,000.” The plaintiff said that she agreed to lend the money and on 18 December she went to the bank to obtain it from her safety deposit box. She said that the police raided her place that night and took the money she had withdrawn earlier that day. She said that on the next business day, which was a Monday, she went to the Suncorp Bank at Stones Corner to withdraw the $50,000 but ‘they didn’t have it’.  She said she was sent to the West End branch but was only able to withdraw $40,000.  She said she had to borrow $10,000 from friends and that she then gave the defendant $50,000.
26. [26]
    The plaintiff said that the defendant paid her a total of $20,000 cash on 24 and 25 June 2016 which she asserted was for interest. The plaintiff said that the defendant transferred her $20,000 on 16 August 2016 which she “reckon…it would be for principal.” The plaintiff said that she had a conversation sometime in August 2018 with a relative of Sam and that after that conversation the relative of Sam dropped by her place and gave her $10,000 which he told her was from Sam. She said that later on “maybe September” the same relative dropped by with another $20,000 and he told her the money was from Sam. 

Plaintiff in cross-examination

27. [27]
    The cross-examination was brief. Much of the cross-examination consisted of asking questions of the plaintiff based upon selected parts of her evidence-in-chief. Very little was actually put to the plaintiff by way of an alternative proposition.
28. [28]
    When asked how the discussion between the defendant and her about her lending money came about, the plaintiff answered that the defendant talked about how she could get some interest from his friends or clients. The plaintiff was asked whether she expressed some concern about lending money to his clients or special friends and she answered yes. The plaintiff agreed with the suggestion that the defendant told her, “Don’t worry about that. If they don’t pay the money back, I’ll pay the money back.” 

29. [29]
    When she was asked about the defendant giving her a guarantee and her understanding that if the clients didn’t pay her the principal and interest, the defendant would pay her, the plaintiff answered, “That’s not totally correct”. The plaintiff explained that this did not make sense because she did not know them, saying, so how could they pay her. It was suggested that the defendant would be giving the clients her money and he would collect the repayment and give it to her. The plaintiff acceded to that proposition twice. 
30. [30]
    Between the occasions when that proposition was made and answered, and following the plaintiff reiterating that she did not want to lend money to someone she had never seen, the following exchange occurred:

“Yes, you told her Honour that on the last occasion, and then in response to that, Sam told you, “Don’t worry. If they don’t pay money back, I’ll pay you money back.” That’s right, isn’t it?---In the sentence, who is me? 

You?---No, it was Sam. That’s Sam’s sentence.  

Exactly. That’s what Sam told you?---Yeah. If – if Sam – “If they don’t pay me,” means I am Sam. “If they don’t pay me, I still pay you back. Don’t worry.” “Me” is not me. 

Thank you. And you understood that to be a guarantee from Sam to you?---I understand guarantee means he promise me. 

Yes, he promised to pay you the money back if they didn’t pay you back?---If they didn’t pay Sam back, not me.  

I see. I understand. So if the clients didn’t pay Sam back, he would pay you?---Yeah. If didn’t – if they didn’t pay Sam back, he should pay me back. He said he promised. 

Thank you. So Sam was to give your money to the clients, and Sam was to collect the money and interest from the clients?---That’s what he explained to me, yes.”

31. [31]
    It was never put, on behalf of the defendant, that there was an agreement between the plaintiff and the defendant that they would pool money together for the purpose of making loans to third parties; and the plaintiff gave no evidence on the subject.
32. [32]
    There was no challenge to the plaintiff’s evidence about the fact of the payments, the dates of them, or that the handwritten statements, said to have been made in the back of the plaintiff’s diary by the defendant, were not made by him. In any event, I would have accepted all of her evidence in these respects.

33. [33]
    No questions were asked about the repayments.
34. [34]
    The defendant neither gave evidence himself nor called any evidence.

Weighing the evidence

35. [35]
    The absence of the pleaded case being put in cross-examination and the defendant not giving evidence as to that case is significant. 
36. [36]
    An unexplained failure by a party to give evidence may lead to an inference that the evidence would not have assisted that party’s case.^[2]  The Jones v Dunkel inference does not entitle the court to fill gaps in the evidence or convert conjecture and suspicion into inference, but it may have the result that a court might more readily accept the evidence of the opposite party which might have been contradicted, or more readily draw an inference favourable to the opposite party.^[3]
37. [37]
    Another principle that may be relevant and is the principle that “all evidence is to be weighed according to the proof which it is in the power of one side to have produced, and in the power of the other to have contradicted.”^[4] In this case, for instance, nothing was led or put on behalf of the defendant as to the third parties who were alleged to be the ultimate beneficiaries of the monies, nor were there any documents tendered by the defendant which might have provided independent verification of the allegation that the cash payments were ultimately made to third persons, whom it may be inferred, were the principal debtors.^[5]
38. [38]
    In this case it is pertinent to be reminded of the remarks of Hodgson JA in Ho v Powell^[6]:

“[I]n deciding facts according to the civil standard of proof, the court is dealing with two questions: not just what are the probabilities on the limited material the court has, but also whether that limited material is an appropriate basis on which to reach a reasonable conclusion.  In considering the second question, it is important to have regard to the ability of the parties, particularly parties bearing the onus of proof, to lead evidence on a particular matter, and the extent to which they have in fact done so.”

Observations on the plaintiff

39. [39]
    The evidence will also have to be assessed in the context of the fact that on occasions the plaintiff summarised her view of the facts, rather than gave precise evidence of conversations and events. That occurred to some extent in her evidence-in-chief, but her manner of giving her evidence by way of summation was actively encouraged during cross-examination. The result might entail less weight being given to those answers accordingly.
40. [40]
    Three further observations should be made about the plaintiff. The first is that on occasions it was apparent that the plaintiff was having difficulty giving her evidence as English was her second language. That observation has particular relevance to the use of the word, “guarantee”. The second is that on occasions it appeared as if the plaintiff was intentionally pushing her own view of the transactions as loans to the defendant, rather than giving objective evidence of events and conversations that occurred. Against that observation is the third observation that, in the end, her use of the word loan was not entirely inaccurate: the issue became whether the payments to the defendant were to be repaid directly by him to her, or whether he was merely collecting the monies to be lent by her to unnamed third parties for repayment by them; with him only guaranteeing the repayment if they did not.
41. [41]
    Whilst the court should be careful about relying upon its assessment of the appearance or demeanour of witnesses,^[7] and whilst there was a change in her general demeanour from examination-in-chief to cross-examination (for whatever reason), subject to those three observations, there was no reason not to accept that the plaintiff was doing her honest best to give evidence as to the relevant events. Indeed, whilst it was suggested by counsel for the defendant in closing addresses that she gave false evidence in part of her cross-examination, it was not submitted that she was not telling the truth in evidence-in-chief, nor was it ever put to her that she was not telling the truth in cross-examination. As to the submission that she was not telling the truth in   parts of the cross-examination, that is certainly not clearly evident from a careful reading of the transcript of the evidence relied upon by the defendant.

Earlier criminal judgment

42. [42]
    During closing addresses, it was submitted on behalf of the defendant that I would be assisted in determining the nature of the oral agreement by remarks that I made in three passages of a judgment involving the plaintiff, Lee v Commissioner of Police.^[8] 
43. [43]
    The decision involved an appeal by this plaintiff under section 222 of the Justices Act 1886 (Qld) against her conviction for one charge of knowingly carrying on the business of providing unlawful prostitution, two charges of dealing with property reasonably suspected of being proceeds of a crime and one charge of unlawful possession of a dangerous drug. The passages relied upon by the defendant record the evidence given in the magistrates court against the present plaintiff. 
44. [44]
    The passages are hearsay in this court, and even if they constituted findings by me in that judgment, they are no more than opinion evidence of mine in this court. The findings are not admissible in this court.^[9]
45. [45]
    The passages were not put to the plaintiff in cross-examination.
46. [46]
    In any event, the material is not entirely inconsistent with the case for the plaintiff in this court.

Approach to resolution of the dispute

47. [47]
    This is a contractual dispute, and it accordingly is to be decided having regard to the objective intention of the parties; that is, the intention that a reasonable person, with the knowledge of the words and actions that the parties communicated to the other and the knowledge that the parties had of the surrounding circumstances, would conclude that the parties had.^[10]  A factor to take into account in deciding its terms is the purpose and object of the transaction objectively ascertained.^[11] 
48. [48]
    Accordingly, the task is firstly, one of determining what words were used by the parties in their conversations, and secondly, determining the contract and construing the contract having regard to the words used in the conversations between the plaintiff and the defendant, the notes handwritten by the defendant, the surrounding circumstances known to both parties and the purpose and object of the transaction. A contract is to be construed so as to avoid it making commercial nonsense or working commercial inconvenience.^[12] In essence, a contract provision is to be determined objectively by reference to its text, context and purpose.^[13]

The oral and written text

49. [49]
    The first loan on 2 April was preceded, according to the plaintiff, with a simple request from the defendant that he reborrow the $130,000. According to the plaintiff there was no reference to the monies being lent to clients of the defendant, or him relending the monies to his clients. It was a simple matter of the defendant asking to reborrow the sum of $130,000. It was not suggested to the plaintiff in crossexamination that there was a conversation as to this specific loan to the contrary of what she said in evidence-in-chief.
50. [50]
    The conversation which led to the payment on 2 July was not articulated. This time, however, there is a note by the defendant which supports the proposition that it was made as a “Loan Pam to Sam”. There is a similar notation by the defendant for the payment made on 28 July 2015: “Loan payment to Sam”.
51. [51]
    It is significant that the words were written by the defendant and that the writing did not refer to the monies being lent to someone other than the defendant (Sam), or even being on lent by him to other persons or people. 
52. [52]
    The evidence in relation to the fourth payment is like the first. It is simply that the defendant begged the plaintiff for a loan. There was again no specific challenge to the plaintiff’s evidence as to the conversation which immediately preceded this transaction. 
53. [53]
    I accept unequivocally the evidence of the plaintiff as to these conversations and that the writing was made by the defendant. Indeed, no challenge was made to the contrary, as I have stated.
54. [54]
    If this evidence stood alone, it would be impossible to conclude otherwise than that there were four loans by the plaintiff to the defendant to be repaid by him to her. Certainly none of it supports the defendant’s pleaded case, or, indeed, its alternative case.

Preceding circumstances

55. [55]
    The first issue is whether the preceding events, in this case the conversation in December 2014 or the loan in December 2014 which occurred prior to the loans in question, can alter that conclusion. 
56. [56]
    Some passages in the plaintiff’s evidence, even her evidence-in-chief, support the proposition that the defendant was merely the agent for third parties and that they were the ones liable for repayment, and that the defendant would only have to pay if the third parties did not. During the discussion about investing in a house, for instance, the defendant said, according to the plaintiff: “If they [meaning his clients] don’t pay me, I’ll pay you back.”
57. [57]
    The comment, however, was preceded, according to the plaintiff, with a statement by the defendant: “Oh, you don’t need to know them [the defendant’s clients]. You’re dealing with me.”
58. [58]
    That evidence was repeated at least once more in her evidence-in-chief; though it is possible that this was a matter of the plaintiff emphasizing what had happened, as opposed to her saying that the conversation to this effect occurred more than once.
59. [59]
    The statement that the plaintiff did not need to know the defendant’s clients, not even their name, which I accept was made by the defendant, confirms the plaintiff’s case that the principal debtor was the defendant, not these faceless people. 
60. [60]
    The qualification that the plaintiff did not need concern herself with the defendant’s clients as she was only dealing with the defendant, is also consistent with the plaintiff’s evidence as to the conversations which occurred when the particular payments, being the subject of the claim, were made to the defendant and with the handwritten notes. No mention was made, in those conversations or the notes, to the money being lent to persons other than the defendant.
61. [61]
    It is also consistent with what little evidence there was about the fact of the repayments; namely that one of them was by way of a direct bank transfer from the defendant and that two of the others were by way of payments by a relative of the defendant on the defendant’s behalf. There was no suggestion in the plaintiff’s evidence that the defendant was merely handing over money he had received from any third party; and no suggestion to that effect was put to the plaintiff on behalf of the defendant.

Guarantee?

62. [62]
    Similar, but also additional, conclusions apply to the evidence relating to the concept of a guarantee. The plaintiff never actually said that the defendant used the word guarantee. She certainly explained in her evidence that the defendant “was the guarantee and pay me back”, but that is not the same as saying that he only offered a guarantee for the payment by others of the relevant debt and that he would make the payment if those third parties did not. The way she gave her evidence, the statement was more like one whereby the defendant promised the plaintiff that he would repay the money. The words used show the defendant encouraging the plaintiff to lend money by giving her a promise or guarantee that he would repay it; and him making it clear that he had the capacity to meet that promise. 
63. [63]
    I am far from persuaded that the dispute can be resolved on the basis of the plaintiff’s use of the word “guarantee”; even assuming that the defendant used that word in any particular conversation. It was very clear in cross-examination, even if less so before that time, that her use of the word “guarantee” was synonymous in her mind with the defendant making a promise; and was not being used in the way a lawyer may use the term. It was not put to the plaintiff that the defendant, a lawyer, used that term. 
64. [64]
    The note made by the plaintiff in the diary for the loan in December 2014 supports the notion that the ultimate recipients of the money were three clients, but it is silent as to whom was legally responsible for repayment. The notations are equally consistent with the defendant merely justifying how the ultimate size of the loan was composed. It is significant that the notes do not identify the ultimate beneficiaries of the loans; the people who, on the defendant’s alternative unpleaded case, were the principal debtors. The notes made by the defendant for the loans on 2 and 28 July 2015 clearly state that they were loans to the defendant.

Other surrounding circumstances

65. [65]
    Other surrounding events did not alter this conclusion. The fact that the defendant received massages from the plaintiff or that they became friendly as a result do not themselves suggest that the defendant was merely someone who handled the money for its ultimate transfer to unknown third parties. That the defendant said that he had a fancy car and he had important friends and showed the plaintiff several Rolex watches (one with a diamond in it) and that the property where he lived included gold statues does not suggest that the transaction was only one involving his personal liability if the ultimate borrower or borrowers failed to pay; let alone that the transaction was one as pleaded by him; namely a dual money lending business. Similar considerations apply to his position as a lawyer; a fact of which she became aware and obviously was one of which he was aware.

Purpose

66. [66]
    The conclusions derived from the text and context are reinforced by a consideration of the purpose of the transaction. According to the evidence, the purpose of the transaction was so that the plaintiff could get a better return on her money by lending it than if she purchased an investment property. A necessary corollary of that purpose was having the money repaid together with interest; a matter which was also discussed between the plaintiff and the defendant. That possibly could have been achieved by a guarantee; but that would be worthless unless it was put in writing, as the defendant, a lawyer, would have well known. That relationship would also be more complicated than one involving direct liability for the debt. The notion of a guarantee, furthermore, was unnecessary on the facts because the plaintiff did not have to know anything about the defendant’s clients as she was “dealing with him”; not those clients.
67. [67]
    It is obviously possible that the same purpose could have been achieved by both the plaintiff and the defendant pooling their money to make loans to third parties, but there was no evidence of any oral conversation to that effect, the documentary evidence is inconsistent with such an agreement and the surrounding circumstances do not support the existence of such an agreement.

Conclusion

68. [68]
    In the result, I have concluded that the plaintiff gave the four cash loans to the defendant, as pleaded, totalling $290,000, and that the defendant repaid at least a total of $50,000, also as pleaded.

The June repayments

69. [69]
    Whilst the amount of the payments and the repayments was not admitted in the defence, allegedly because he did not have any records in his possession or power, no challenge was made, in the end, to these figures. The only issue taken in closing submissions, though without elaboration, was as to the payment to the plaintiff of the amounts of $16,500 and $3,500 on 24 and 25 June 2016. These payments had originally been pleaded by the plaintiff as repayments of capital. On 21 November 2022 the statement of claim was amended to allege that they were repayments by way of interest. It will be recalled that in her evidence-in-chief the plaintiff said that she reckoned that these payments were made by way of interest; but no elaboration was requested either in her evidence-in-chief or cross-examination as to the basis for her belief. No submissions were made by either party as to why one characterisation should be adopted as to the repayments rather than another.
70. [70]
    Interest at 12% pa on the first loan made in 2015 would be only slightly less than the total amount paid in June 2016.
71. [71]
    Absent appropriation by either party (before action), where payments are received on account of a debt which arises from both principal and interest, the payments are treated as applicable to interest in priority to principal.^[14]  Given the state of the evidence, there is no particular reason not to adopt that presumption in the present case in relation to the June repayments. 

Interest

72. [72]
    In the result, there should be judgment in the sum of $240,000 with interest to be calculated by the parties. Interest should be calculated on the first loan of $130,000 at 12% from the date of the loan until the date of the part repayment on 16 August 2016, then on the amount of $110,000 from 16 August 2016 until 1 August 2018, then on the amount of $100,000 from 1 August 2018 until 1 September 2018 and then on the amount of $80,000 from 1 September 2018 until the date of this judgment. Interest should be calculated on the three remaining loans at 12% from the dates of the payments until the date of this judgment. The amounts of interest paid on 24 and 25 June 2016 should be deducted from that sum.

Orders

73. [73]
    There will accordingly be orders that:

    1. The plaintiff has judgment in the amount of $240,000;
    2. If the parties are able to reach agreement as to the amount of interest payable and costs (including reserved costs), a consent order signed by the parties be filed by 4:00pm Friday, 5 July 2024;
    3. If the parties are unable to agree orders in respect of interest and costs,
       1. the plaintiff is to file submissions no longer than six pages, and if interest cannot be agreed, a schedule showing the calculation of interest and, if costs cannot be agreed, exhibiting any documents recording any offers by 4:00pm Monday, 15 July 2024;
       2. the defendant is to file submissions no longer than six pages, and if interest cannot be agreed, a schedule showing the calculation of interest and, if costs cannot be agreed, exhibiting any documents recording any offers by 4:00pm Thursday, 25 July 2024; and
       3. the plaintiff is to file any submissions in reply no longer than two pages, by 4:00pm Tuesday, 30 July 2024.
74. [74]
    Unless there is a reason to do otherwise, I will make my final form of orders consequent upon those submissions, in chambers after my return from leave.