Icon Office Solutions Aust Pty Ltd v Hughes
[2024] QMC 13
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- Unreported Judgment
- Icon Office Solutions Aust Pty Ltd v Hughes[2024] QMC 13
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Icon Office Solutions Aust Pty Ltd v Hughes[2024] QMC 13
Icon Office Solutions Aust Pty Ltd v Hughes[2024] QMC 13
MAGISTRATES COURTS OF QUEENSLAND
CITATION: | Icon Office Solutions Aust Pty Ltd v Hughes [2024] QMC 13 |
PARTIES: | Icon Office Solutions Aust Pty Ltd (Plaintiff) v Richard Hughes (Defendant) |
FILE NO/S: | 1824/21 |
DIVISION: | Civil |
PROCEEDING: | Trial |
ORIGINATING COURT: | Brisbane Magistrates Court |
DELIVERED ON: | 02/08/2024 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 11/09/2023 |
MAGISTRATE: | J. Pinder |
ORDER: | Judgement I give judgement for the plaintiff against the defendant in the sum of $50,000. Interest and Costs In the event that the parties are unable to agree the amount of interest payable on the judgement debt and costs I direct the parties to file and serve written outlines in respect of interest (including calculations) and costs to be no more than five typed A4 pages of length within 10 days. |
CATCHWORDS: | Loan Agreement Personal Loan – Repayable on demand
|
SOLICITORS: | Plaintiff
Defendant
|
Introduction
- [1]The plaintiff brings suit claiming the sum of $50,000 and interest and costs.
- [2]The plaintiff claims that these monies are due and owing pursuant to a loan agreement entered into between the plaintiff and defendant, in or about the late March 2020 the terms of which provided that the loaned monies were repayable by the defendant upon demand.
- [3]The defendant says that there was no loan agreement between the parties and that money’s paid by the plaintiff were paid to Sales House Pty Ltd, pursuant to an agreement between the plaintiff and Sales House and constituted an advance against commissions.
The Pleadings
- [4]The plaintiff at the commencement of the trial was given leave, without opposition, to amend its statement of claim in paragraph (4) (a date amended to 03/09/2024).
- [5]The amendment related solely to paragraph 4 of statement of claim, which the defendant had in any event denied such that there was no consequential requirement for an amendment of the defence.
- [6]The pleadings in the action are:-
- Amended statement of claim dated 11 September 2023.
- Amended defence dated 8 November 2021.
- Reply dated 22 November 2021.
- [7]The pleadings define the issues in dispute as follows:-
The defendant denies that:-
- The parties entered into a loan agreement in or about late March 2020.
- The terms of the loan agreement were that the plaintiff would advance loaned monies from time to time upon request of the defendant.
- That the plaintiff made payments to the defendant under the loan agreement, in a total of $50,000 being as follows:-
- 24 March 2020 $10,000 by payments of $10,000 each on the 24 March 2020, 24 April 2020, 20 June 2020, 6 August 2020 and 30 September 2020.
- That any money’s borrowed pursuant to the loan agreement were repayable buy the defendant to the plaintiff upon demand.
- [8]The defendant alleges that:-
- An amount of $50,000 was paid by the plaintiff to Sales House Pty Ltd pursuant to an agreement between the plaintiff and Sales House.
- The monies were paid by way of advance against commissions.
- The advance was paid by the plaintiff to Sales House on behalf of an entity to be established under the name of Ethan Print Pty Ltd.
- The advance was repaid by Sales House to Ethan Print by way of set off against commissions earned by Sales House.
- [9]The pleadings confirm the parties’ positions are fundamentally and irreconcilably different.
- [10]The plaintiff to succeeded in the action must prove on its pleaded case that:-
- There was a loan agreement entered in between the plaintiff and the defendant, in the terms particularised.
- That the plaintiff made payments to the defendant under the loan agreement as particularised totalling $50,000.
- [11]The defence admits and it is not an issue that:-
- The plaintiff demanded the defendant repay the sum of $50,000 on 19 August 2021.
- The defendant has failed or refused to pay any moneys.
The Plaintiff’s Evidence
- [12]The only witness called by the plaintiff was Mr Michael David Brodie (the Director and Share Holder of the plaintiff company).
- [13]It is uncontroversial and proven by Exhibit 1 (various ASIC searches) and Exhibit 3 (certificate copy of trustee Brodie Family Trust) that Mr Brodie is the sole director and shareholder of the plaintiff, Icon Office Solutions Aust Pty Ltd and that Icon Office Solutions Aust Pty Ltd is the trustee for the Brodie Family Trust.
- [14]Mr Brodie gave evidence that he and the defendant Mr Hughes had known each other at school and subsequently, that the defendant worked for him in a business which was first called Xerox Work Business Centre and subsequently called Connected Solutions Groups. Mr Brodie said that he the defendant had then developed a closer personal relationship and that he would stay with the defendant at his residence in Brisbane from time to time.
- [15]Uncontroversially, Mr Brodie identified that the plaintiff operated a bank account with the Commonwealth Bank being BSB 06400 Account Number 14577145 (see Exhibit 6).
- [16]Brodie had earlier given evidence, again uncontroversially, that in relation to the informal shared living arrangements that he and the defendant had, he would from time to time reimburse the defendant by direct deposit for money’s for purchases etc and that the funds were deposited into an account operated by the defendant with the NAB Bank being BSB 084447 Account Number 730857030. Bank statements in respect of that account held by the defendant with the NAB are contained in Exhibit 16. Again uncontroversially, that was a bank account in the defendant’s sole name which he accepts he operates and held and operated and used.
- [17]Brodie’s evidence as to the loan agreement entered into between the plaintiff and the defendant (pleaded in paragraphs 2 and 3 of the statement of a claim) commenced with him, identifying, a transaction where there was transferred from the plaintiff’s account to the defendant’s account the sum of $10,000 on the 24 March 2020. Exhibit 7 a copy of the Commonwealth Bank transaction shows the following:-
Lodgement referenceDraw RH
RemitterBrodie Property
From Accounts –
- Lodgement Reference Remitter.
- MDB Loan.
To Account –
- Brodie Property – Two Accounts.
- [18]There is a corresponding entry in the defendant’s NAB bank account Exhibits 16 (Item 19), showing a deposit on the 24 March 2020 in the sum of $10,000 the particulars of which are “MLB loan – brodie property”. Brodie’s evidence of why this payment (via bank transfer) was made from the plaintiff’s account to the defendant’s account is in this evidence is (see transcript 1-25 commencing at line 30).
“What prompted you to transfer this $10,000? – I had a phone conversation with Richard.
So Richard called me and said I wonder if you could help me out. I’m a little bit tight at the moment. I’ve got some money owing from CSG. Luke Ellis owes me some money. Could I borrow 10 grand? Brodie said he responded in …not a problem.”
- [19]Later in his evidence he said:
“…and on what terms did you say you would give the money to him… I’d assumed for that amount of money it’d be repaid.
I didn’t directly say it had to be repaid on demand but when you lend someone that sort of money you don’t especially personally, you could expect it back because he said he was waiting for some money from CSG.”
- [20]Brodie then gave evidence as to the lodgement reference remitter – “Draw RH - Brodie Property” to the effect that draw meant that he was drawing the money and RH is the initials for Richard Hughes.
- [21]In respect of the lodgement reference remitter - “MDB Loan Brodie Property” he said MDB was a reference to him – Michael David Brodie and loaned means I’m loaning you the money.
- [22]Brodie’s evidence of the conversation between he the defendant which he alleges constitutes the loan agreement entered into between the parties, is in indeed very brief and lacking in particularity.
- [23]The effect of his evidence is that he and the defendant, who were personal friends as well as previously having a business relationship, entered into this loan agreement by words effectively where the defendant asked him to loan him $10,000 and he agreed. He acknowledges that he did not directly say the money’s that were being loaned would be repaid on demand but that he had an expectation, as it was a loan, that it would be repaid. Brodie’s evidence was the next transaction occurred on the 24 April 2024 and again the conversation giving rise to the alleged loan agreement is in very short compass (see transcript 1 – 27 at line 35) … he rang me and said “look I’m still a bit tight. Can I borrow another 10 grand. And I said not a problem that’s okay”.
- [24]Brodie’s evidence was that that transfer of money from the plaintiff’s account to the defendant’s account was described by him differently in the bank statements as “Loan Hughes” (corroborated by Exhibit 8).
- [25]Brodie’s evidence was that there was a further $10,000 transferred by him from the plaintiff’s account to the defendant’s account on the 20 June 2020 (see transcript 1 – 28 at line 20), again prompted by another phone call from Mr Hughes requesting another $10,000. This is evidenced by Exhibit 9 and described by Brodie in the lodgement reference as “loan MB”.
- [26]There was yet another transfer on the 6 August 2020, again Brodie’s evidence was prompted by a request from the defendant (see transcript 1 – 28 at line 45) and evidence by Exhibit 10 with the loan reference recorded as “loan RH”.
- [27]Brodie gave evidence of a final transfer on the 3 September 2020 in the sum of $10,000 again prompted by a phone call from the defendant asking to borrow another $10,000 (see transcript 1 – 29 at line 20). Evidenced by Exhibit 11 where the lodgement reference is recorded as “draw loan RH”.
- [28]The receipt into the defendant’s NAB bank account of each of those 5 payments by the plaintiff of $10,000 on the 24 March 2020, 24 April 2020, 20 June 2020, 6 August 2020, and 3 September 2020 are interestingly proven as a result of the defendant whilst cross-examining Mr Brodie tendering those documents (being documents from the document bundle 17 to 24) as Exhibit 16 in the proceedings.
- [29]Those documents confirm corresponding deposit entry into the defendant’s bank account of each of those payments.
- [30]Brodie in evidence in chief also said that in having endorsed a description in respect of the bank transfers from the plaintiff’s account with the Commonwealth Bank to the defendant’s account with NAB, the defendant never contacted him challenging the accuracy of those endorsements and contending that the payments were not a loan (see transcript 1 – 26 at line 30).
- [31]Likewise, Brodie gave evidence that he never said the loans were made by or on behalf of Ethan Print (see transcript 1 – 29 at line 35).
- [32]And further he did not say that the loans were made to Salt House (see transcript 1 – 29 at line 40).
- [33]Brodie than gave evidence about other business arrangements between himself, the defendant, and Greg Cox that led to the establishment of a company Ethan Print Pty Ltd. Exhibit 1 (Item 3) is an ASIC search which confirms that Ethan Print Pty Ltd was registered on 9 June 2020.
- [34]The search also shows the shareholders of that company as being:-
- Benjamin Eric Westaway
- Ethan Global Pty Ltd
- Brodie Property Services Pty Ltd
- [35]Brodie gave evidence as to arrangements that led to a “print specialist agreement” being entered into between Ethan Print Pty Ltd, and Sales House Pty Ltd, and Richard Hughes. The print specialist agreement is Exhibit 12 and the evidence of Brodie and the document itself confirms that the agreement was executed on the 2 September 2020.
- [36]Brodie gave further evidence of payments being made by Ethan Print Pty Ltd to Sales House Pty Ltd pursuant to the terms of the print specialist agreement.
- [37]Those payments which Brodie said was commission payable by Ethan Print to Sale’s House, were made from a Westpac bank account in the name of Ethan Global Pty Ltd to the defendant’s bank account with NAB. Those Westpac bank records are Exhibits 13, 14, and 15 respectively.
- [38]The evidence in chief of Mr Brodie in relation to Ethan Print Pty Ltd, Sales House Pty Ltd, and the print specialist agreement was obviously led in the plaintiff’s case to meet the allegations in the defence that the payments made to the plaintiff totalling $50,000 were not a loan from the plaintiff to the defendant; but rather were advances against commission payable by Ethan Print proprietary limited to Sales House Pty Ltd.
- [39]The defendant who appeared at trial pro-se cross-examined the plaintiff’s only witness Mr Brodie.
- [40]The defendant commenced by putting to Mr Brodie that whilst his evidence in chief was that there were several telephone conversations, about him borrowing money from the plaintiff, that that was not pleaded in the statement of claim.
- [41]He cross-examined Mr Brodie at some length concerning the defendant’s financial circumstances and put to him copies of his personal bank accounts.
- [42]The tenor of the cross-examination of Mr Brodie by the defendant was to the effect that the defendant’s bank accounts showed he had no need for a personal loan. Unsurprisingly, Mr Brodie had no knowledge of the defendant’s personal financial circumstances, and nothing turned on that cross-examination and certainly nothing was proved by it in relation to the central issue of Brodie’s evidence concerning the alleged personal loan from the plaintiff to the defendant.
- [43]The defendant then put to Brodie a transaction identified in his NAB bank statements – 10 December 2020 – Ethan Print – Loan $17,500.
- [44]That is, there was a deposit of $17,500 into the defendant’s NAB bank account.
- [45]Brodie’s evidence was that Ethan Print paid the money, as an advance against commissions payable to the defendant, but on accounting advise, they were identified as loans (see Transcript 1 – 40 at line 15).
- [46]The defendant put further that all of the loans were in fact payment from commissions earned in the future which Broadie absolutely rejected (see Transcript 1 – 40 at line 30). Effectively, the defendant contended that the plaintiff was funding Ethan Print and that all the payments were of a like kind (see Transcript 1 – 40 at line 40). The cross-examination of Brodie continued with questions concerning a trip by the defendant and Brodie to Sydney for the purpose of establishing the business ultimately trading as Ethan Print and various contributions to travel costs. Nothing appears to turn on that in the context of the central issue of this trial.
- [47]It was also put to Brodie that he had on a number of conversations with the defendant and contended that his rule of business was never to loan money. Brodie accepted that but in response to this alleged personal loan said: -
“You asked me, I gave you the money.” (See Transcript 1 – 43 at line 1).
- [48]As it was clear, and noting that the defendant appeared pro se, that he had seemed to have failed to put much of the defendant’s pleaded case to the witness Brodie, he was reminded to do so.
- [49]The final cross-examination of Brodie was a proposition put by the defendant that he and a partner Greg Cox had ceased receiving income from selling at CSG that he (Brodie) had agreed to pay retainers (see Transcript 1 – 44 at line 40).
- [50]Brodie adamantly denied that.
- [51]The cross-examination of the witness Brodie ended and again but for putting to him that there was more than one telephone conversation requesting funds, (contrary to the pleading in the statement of claim), nothing was really put by the defendant otherwise challenging Brodie’s evidence concerning the telephone conversations regarding the alleged loan agreement and the five payments of $10,000 by the plaintiff to the defendant.
- [52]The plaintiff then closed its case.
The Defendant’s Evidence
- [53]The defendant Richard Morris Hughes gave evidence on his own behalf.
- [54]His evidence in chief was in short compass. He contended that he, Greg Cox, and Brodie had “started to work on a plan to start a dealership to sell photocopiers through an IT company’s clients.” (See Transcript 1 – 49 at line 10).
- [55]He said Mr Brodie had pushed back the start date of the proposed enterprise and as a consequence, both he and Cox were forced to resume selling for another business (CSG/Fuji Xerox) and that had caused Brodie to become upset upon the basis that he contended that the defendant and Cox should devote their time to the proposed new enterprise.
- [56]His evidence was then that Brodie had agreed to pay retainers – “Michael then said “Well, I’ll start paying retainers now. Are you happy?” and we said, yep.” (See Transcript 1-49 at line 35)
- [57]The defendant said:-
“And then he started paying retainers at the agreed amount per month as in the Ethan Print agreement. He didn’t start the Ethan Print contracts because the company wasn’t formulated and the contracts between the sellers… had not been signed or completed.”
“I say that the payments that were made were advances against commissions, they were on or about the same date every month. They were the same amount every month.” (See Transcript 1 – 49 from line 35 onwards).
- [58]Hughes then gave evidence of having only one bank account (the bank account with the NAB previously discussed) and that all payments, including previous payments from CSG and payments from Ethan Print were all deposited to the credit of that account.
- [59]In respect of Brodie’s evidence about telephone conversations where he and the defendant sought a personal loan to borrow money, he said:-
“When he says we had five telephone conversations where I ask for money every time, that didn’t happen.” (See Transcript 1 – 50 at line 15).
- [60]Little of this very detailed evidence of what the defendant contended were the arrangements giving rise to the payments by the plaintiff to him were put in cross-examination to the witness Brodie.
- [61]At its highest, he contended that there was an agreement to pay retainers which was denied.
- [62]He put to Brodie that there were some discussions and activities leaded up to ultimately the establishment of Ethan Print Pty Ltd and the specialist print agreement entered into between Ethan Print and Sales House and Hughes.
- [63]Specifically, he did not put to Brodie that there were not five separate telephone conversations where he (Hughes) had requested monies by way of a loan.
- [64]The defendant also gave evidence referencing Exhibit 2, the letter of demand from HopwoodGanim Lawyers to the defendant dated 5 August 2021. He said: -
“He’s originally trying to claim back all the money advanced to Sales House and to me personally. That he alleged he lent to me personally. Obviously, he doesn’t understand the difference between an advance against commission, and a loan. He thought he could get back the money that he paid to me that was less than what the commission had done, but it doesn’t work like that.” (See Transcript 1 – 51 at line 15).
- [65]The defendant then sought through his evidence in chief to tender documents which had not been disclosed by him in the proceedings to the plaintiff and that was objected to and disallowed.
- [66]The evidence of the defendant in respect of the effect of the letter of demand dated 5 August 2021 is confused and confusing. It does not on the plain reading of it (see Exhibit 2) support the proposition that he put in his evidence in chief. The letter does seek demand in respect of a personal loan both: -
- A personal debt – owed by the defendant to Brodie.
- A company debt – owed by Sales House to Ethan Print.
- [67]There is no other evidence in these proceedings about the alleged company debt. The defendant was cross-examined by the plaintiff’s counsel at some length. The plaintiff’s case through the evidence in chief of Mr Brodie was put to the defendant concerning the telephone conversations whereby Brodie gave evidence that the defendant requested personal loans. The defendant denies those conversations had occurred.
- [68]It was put to the defendant that the bank statements recorded the transactions as loans, and that he never challenged that, to which the defendant responded that the endorsement on the transfers did not change the agreement between he and Brodie (see Transcript 1 – 58 at line 15).
- [69]In cross-examination the defendant was taken through the payments from the plaintiff to him (into his NAB bank account) and the references in the transaction history that they were “loan Hughes,” but he (the defendant) contended that it was not a personal loan, that it was by his company (see Transcript 1 – 59 at line 40).
Discussion
- [70]The plaintiff’s pleaded case is that, through the Director and Shareholder Mr Brodie, it had agreed to loan monies personally to the defendant.
- [71]Brodie’s evidence was that there were five separate requests made by the defendant by telephone conversation for a personal loan and five payments of $10,000 transferred by the plaintiff to the defendant’s bank account. The evidence of the plaintiff’s witness Mr Brodie and the defendant are irreconcilable.
- [72]I have had an opportunity of observing each of the witnesses give evidence and observe in their demeanour.
- [73]The defendant appeared pro se, an obvious disadvantage in a case involving as this does, an oath-on-oath dispute as to evidence concerning the material facts.
- [74]As observed in respect of the defendant’s evidence, he did not put in cross-examination much of what ultimately was his evidence as to the conversations with Brodie or the arrangements in respect of the payments of $10,000 each totalling $50,000. Brodie’s evidence about the conversations giving rise to the alleged personal loans was brief and did not have any great degree of particularity or detail. He in fact conceded that he did not use the words that the monies loaned would be “repayable upon demand.”
- [75]Brodie’s evidence, having regard to what appears to have been a reasonably longstanding personal relationship with the defendant since their schooldays, has however a ring of truth about it. It would not be unusual for old friends to discuss and deal with a personal loan of some monies to help tide the defendant over in the terms of the evidence that Brodie gave.
- [76]The evidence of the defendant, however, is far less convincing and not supported by the objective and uncontroversial evidence, especially the document evidence being the exhibits tendered in the proceedings.
- [77]In that regard: -
- The defendant did not in cross-examination challenge directly Brodie as to the five separate telephone conversations giving rise to the requests and personal loans.
- The bank statements (both the CBA account of the plaintiff and the NAB account of the defendant) reference on various occasions “loan Hughes” as a descriptor.
- The defendant accepts at no stage did he challenge that description when the payments were made.
- The defendant’s contentions in relation to the payments being an advance on commission by Ethan Print to Sales House are completely inconsistent and incompatible with the documentary evidence: -
- Ethan Print Pty Ltd did not commence as an entity until 9 June 2020.
- The print specialist agreement between Ethan Print and Sales House and Hughes was not executed and did not commence until 2 September 2020.
- Payments which were accepted by Brodie as being made by Ethan Print to the defendant did not occur (as was identified in the cross-examination by the defendant of Brodie) until 10 December 2020 and were clearly identified in the defendant’s bank statements as a payment by Ethan Print.
- [78]I reject the defendant’s evidence concerning the five transactions where payments were made of $10,000 each by the plaintiff into his bank account on 24 March 2020, 24 April 2020, 20 June 2020, 6 August 2020, and 3 September 2020, that those payments were an advance against commission in respect of a business entity that had not commenced and a business arrangement (the specialist print agreement) that had not been executed until 2 September 2020 and was not otherwise in existence.
- [79]I reject the defendant’s evidence concerning conversations which he said he had with Brodie whereby Brodie had agreed to pay retainers, which evidence is not corroborated by any of the bank records or other documentary evidence or the exhibits in the proceedings.
- [80]I accept the evidence of Brodie that in relation to a long-standing personal friend, he received a telephone call requesting a personal loan of $10,000 in late March 2020 and that he agreed to pay the money as a personal loan from the plaintiff to the defendant.
- [81]I accept Brodie’s evidence that on four subsequent occasions there were similar short telephone conversations where the defendant sought further advances by way of a personal loan from the plaintiff through Brodie which were agreed to.
- [82]Mr Brodie’s evidence was clearly that there was no great particularity in the terms of the personal loan agreement between the plaintiff and the defendant, but that it was a loan and there was an expectation that it would be repaid.
The Relevant Law
- [83]The plaintiff’s counsel’s outline conveniently addresses two issues.
Formation of the Binding Agreement
- [84]This on the plaintiff’s pleaded case was an oral contract.
- [85]The conversation between Brodie and the defendant lacked particularity but it was in all the circumstances that existed and in the context of the personal relationship between Brodie and the defendant, clearly a loan agreement.
- [86]As the plaintiff contends from the decision of Douglas v Mikhael (2023) NSW CS 979, I am satisfied on the balance of probabilities that a contract was formed with a binding agreement made in the telephone conversation in late March 2020 between Brodie and the defendant. That loan agreement provided that the plaintiff would loan money, from time to time, to the defendant upon request by the defendant.
- [87]The defendant subsequently in conversations on further occasions requested, and the plaintiff agreed, to make further payments by way of loan.
When is the Loan Repayable
- [88]I accept the plaintiff’s counsel’s submission that the decision of Argyll Park Thoroughbreds Pty Ltd v Glen Pacific Pty Ltd (1993) 11 ACSR 1 is authority for the proposition that if the time at which an amount that is loaned must be repaid is not stipulated “the law is that where there is no agreement for a loan and time for repayment is not fixed by agreement any monies advanced will be repayable on demand.” I am satisfied on the balance of probabilities that the terms of the loan agreement between the plaintiff and the defendant were that the amounts loaned by the plaintiff to the defendant were repayable upon demand.
- [89]The defence admits that: -
- The plaintiff demanded the defendant repay the loan in full on 5 August 2021.
- The loan has not been repaid.
Disposition
- [90]The plaintiff through Mr Brodie (and the defendant) entered a loan agreement whereby the plaintiff agreed to loan money to the defendant which was repayable on demand.
- [91]The plaintiff made payments each of $10,000 to the defendant on 24 March 2020, 24 April 2020, 20 June 2020, 6 August 2020, and 3 September 2020 totalling $50,000. The monies loaned by the plaintiff to the defendant are repayable and were repayable upon demand being made by the plaintiff on 5 August 2021. The defendant in breach of the loan agreement has failed or refused to repay the loaned monies in the sum of $50,000 and the plaintiff is entitled to judgement on its claim in that sum.
Judgement
- [92]I give judgement for the plaintiff against the defendant in the sum of $50,000.
Interest and Costs
- [93]In the event that the parties are unable to agree the amount of interest payable on the judgement debt and costs I direct the parties to file and serve written outlines in respect of interest (including calculations) and costs to be no more than five typed A4 pages of length within 10 days.
Magistrate J.N.L Pinder
Dated – 02/08/2024