FEDERAL COURT OF AUSTRALIA Australian Competition and Consumer Commission v Clinica Internationale Pty Ltd (In Liquidation) (No 5) [2016] FCA 811 File number: VID 252 of 2015 Judge: MORTIMER J Date of judgment: 15 July 2016 Catchwords: CONSUMER LAW – application for variation of compensation and pecuniary penalty orders CONTRACT – whether loans made pursuant to written agreement – whether loans personal in nature or made to corporate entities REAL PROPERTY – where caveat lodged and withdrawn prior to sale of property – whether lender had caveatable interest in property – whether lender a secured creditor of corporate proprietor Legislation: Federal Court Rules 2011 (Cth) rr 1.40(a) and 30.34(1)(a) Property Law Act 1958 (Vic) s 53(1)(a) Cases cited: Australian Competition and Consumer Commission v Clinica Internationale Pty Ltd [2015] FCA 1006 Australian Competition and Consumer Commission v Clinica Internationale Pty Ltd (No 2) [2016] FCA 62 Australian Competition and Consumer Commission v Clinica Internationale Pty Ltd (In Liquidation) (No 3) [2016] FCA 284 Australian Competition and Consumer Commission v Clinica Internationale Pty Ltd (In Liquidation) (No 4) [2016] FCA 286 Maggbury Pty Ltd v Hafele Australia Pty Ltd [2001] HCA 70; 210 CLR 181 Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; 219 CLR 165 Date of hearing: 17 May 2016 Date of last submissions: 7 June 2016 Registry: Victoria Division: General Division National Practice Area: Commercial and Corporations Sub-area: Regulator and Consumer Protection Category: Catchwords Number of paragraphs: 112 Counsel for the Applicant: Dr O Bigos Solicitor for the Applicant: Thomson Geer Solicitor for the Second and Third Respondents: Mr P Franzese of Franzese and Associates Counsel for the Fourth Respondent The Fourth Respondent appeared in person ORDERS VID 252 of 2015 BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant AND: CLINICA INTERNATIONALE PTY LTD (IN LIQUIDATION) First Respondent RADOVAN MONTAGUE LASKI Second Respondent SWISHETTE PTY LTD Third Respondent TANIA LASKI Fourth Respondent JUDGE: MORTIMER J DATE OF ORDER: 15 July 2016 THE COURT DECLARES THAT: 1. Ms Tania Laski is not a secured creditor of Swishette Pty Ltd, in respect of loans made by her to Mr Radovan Montague Laski in the sum of $215,000 or any lesser amount, and has no entitlement to be paid any amount out of the funds held in the applicant's solicitors' trust account which are the subject of the Court's orders made in this proceeding on 23 March 2016. THE COURT ORDERS THAT: 2. The second and third respondents pay 50% of the applicant's costs of and incidental to the determination of Ms Tania Laski's claimed entitlement to funds held in the applicant's solicitors' trust account which are the subject of the Court's orders made in this proceeding on 23 March 2016. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT MORTIMER J: BACKGROUND 1 On 9 February 2016, I gave judgment in this proceeding in favour of the applicant, the ACCC: see Australian Competition and Consumer Commission v Clinica Internationale Pty Ltd (No 2) [2016] FCA 62, to which I will refer in these reasons as the 'Principal Judgment'. 2 At the time the Principal Judgment was published, the Court distributed a set of proposed orders to the parties and the parties were given leave to file submissions regarding the form of those orders. Two non-party companies, Swishette Pty Ltd and Letore Pty Ltd, then filed an interlocutory application seeking various orders in the proceeding, in particular challenging the proposed orders in relation to the proceeds of sale of a property at 5 Maroona Road, Brighton of which Swishette had been the registered proprietor: see [8]-[9] of the Principal Judgment. The evidence is that Swishette sold the Brighton property on 4 May 2015, shortly before the ACCC commenced this proceeding on 14 May 2015 but well after the ACCC began communicating with the first respondent, Clinica, and the second respondent, Mr Laski, in July 2014 about the matters that would become the subject of the proceeding. Settlement of the sale of the Brighton property occurred on 8 September 2015. 3 On 23 March 2016, I gave judgment dismissing Swishette and Letore's interlocutory application and an application filed by the ACCC, although I made an order joining Swishette as a party to the proceeding: see Australian Competition and Consumer Commission v Clinica Internationale Pty Ltd (In Liquidation) (No 3) [2016] FCA 284. Swishette is now the third respondent. On the same date, I made final orders in the proceeding and gave short reasons for the form of those orders: see Australian Competition and Consumer Commission v Clinica Internationale Pty Ltd (In Liquidation) (No 4) [2016] FCA 286. I subsequently made orders by consent on 7 April 2016 staying certain parts of the final orders pending an appeal on behalf of Mr Laski and Swishette. The stay does not affect the form of the final orders and is not material to the matters addressed in these reasons. 4 The final orders provided, inter alia, that Clinica and Mr Laski were to refund to clients of Clinica any moneys paid by those clients in respect of the 'Regional Sponsorship Agreements', the 'Clinica Program', or the 'Cleaning Course' as those terms were used in the final orders and in accordance with the reasons in the Principal Judgment. It appeared then, as it does now, that the principal source of the refunds would be the proceeds of sale of the Brighton property. From 8 September 2015, those funds were held in the trust account of the solicitors for the ACCC ('the applicant's solicitors' trust account') pursuant to freezing orders originally made by the Court on 4 August 2015 and subsequently varied and extended on several occasions: see Australian Competition and Consumer Commission v Clinica Internationale Pty Ltd [2015] FCA 1006; Principal Judgment at [6]-[7], [27]. The final orders required Mr Laski, as sole director of each of Swishette and Letore, to give a direction on behalf of Swishette and Letore that the funds were to be maintained in the applicant's solicitors' trust account and withdrawn and applied only to effect the refunds. Mr Laski gave that direction on 23 March 2016, after which the freezing orders expired on 24 March 2016. 5 The final orders set out a process by which the funds in the applicant's solicitors' trust account were to be used to effect the refunds. However, paragraph 11 of the final orders also provided: On or before 4:00pm on 6 April 2016, Ms Tania Laski has leave to file and serve any submissions and supporting evidence as to why she ought be paid $215,000 out of the funds held in the applicant's solicitors' trust account. If Ms Tania Laski serves submissions in accordance with this paragraph, the parties each have leave to file and serve any short submissions and supporting evidence in reply on or before 4:00pm on 20 April 2016. 6 As I explained at [83]-[85] of the Principal Judgment, Ms Tania Laski was previously married to Mr Laski and deposed in an affidavit in this proceeding dated 18 August 2015 that she had loaned substantial sums of money to him; that Swishette had agreed in a written loan agreement made in February 2011 to guarantee those loans and to grant a charge and mortgage over the Brighton property as security for the loan funds; that Mr Laski owed her a total of $215,000; and that the amount she was owed had been secured by a caveat over the Brighton property. 7 The ACCC did not cross-examine Ms Laski at the hearings which gave rise to the Principal Judgment and it did not initially oppose an order that she be paid $215,000 out of the frozen funds, apparently not contesting the underlying proposition that she was a secured creditor of Swishette. However, as I explained at [86] of the Principal Judgment, I was not prepared to make such an order on the basis of the evidence before me. Instead, I made paragraph 11 of the final orders to provide Ms Laski and the parties with an opportunity to file submissions and provide evidence in relation to Ms Laski's entitlement to the funds. 8 On 6 April 2016, Ms Laski filed submissions and a second affidavit dated 6 April 2016 pursuant to paragraph 11 of the final orders. Ms Laski filed those documents herself, although it appears she may have had some legal assistance in doing so. Ms Laski gave oral evidence that she had a friend who was a retired solicitor who gave her some assistance. Given the level of contact and communication which the evidence discloses between Mr Franzese, Mr Laski and Ms Laski (and I refer here especially to emails which Ms Laski annexed to her second affidavit) it may also be that Mr Franzese provided her with some assistance, but I do not make to a finding to that effect. After some prevarication, Ms Laski admitted in cross-examination that she and Mr Laski had "talked" about her affidavit. That, in my opinion, is evident from her references to Swishette in her affidavit and submissions. In my opinion those references are likely to have been inserted at Mr Laski's suggestion. 9 In her submissions, Ms Laski maintained her claim that Mr Laski owes her $215,000 and submitted that she should be paid that sum out of the frozen funds because the loan was secured by a caveat over the Brighton property. In her affidavit, Ms Laski expanded on the circumstances in which she loaned money to Mr Laski and annexed a number of emails dated between 14 September 2015 and 4 March 2016 in which she had asked Mr Laski to repay the money that he owed her. 10 On 14 April 2016, the ACCC filed short submissions stating that it opposed Ms Laski's claim and sought to cross-examine her at a further hearing. It also foreshadowed that it would seek to make fulsome submissions after that hearing, but indicated that it did not wish to do so before the hearing because a full statement of the basis of its position would give Ms Laski an unfair forensic advantage. 11 On 20 April 2016, the respondents (being Clinica, Mr Laski, and Swishette) filed an affidavit sworn by Mr Laski in which he supported Ms Laski's claim and annexed a copy of a caveat dated 8 June 2015 over the Brighton property in Ms Laski's favour. No submissions were filed by the respondents. 12 On 22 April 2016, I made orders fixing the matter for further hearing and directing pursuant to rr 1.40(a) and 30.34(1)(a) of the Federal Court Rules 2011 (Cth) that Ms Laski was to attend the hearing. Having received correspondence from the parties, I also granted leave for each of the parties to cross-examine Ms Laski and I granted leave to the ACCC to cross-examine Mr Laski at the hearing. On 17 May 2016, the matter came before me for further hearing. At the hearing I made an order joining Ms Laski as a party, consistently with the authorities to which I referred in ACCC v Clinica (No 3) at [42], [44]. Ms Laski gave oral evidence, as did Mr Laski. The parties subsequently filed further submissions in accordance with orders I made at the end of the hearing. 13 The parties' submissions did not, in my opinion, address many of the legal and factual issues which must be considered in deciding whether Ms Laski is a secured creditor of Swishette. I have addressed the matters I consider necessary to determine Ms Laski's claim and the arguments for and against them put by her and the other parties. There are places in these reasons where I note other arguments which might have been made to support or defeat Ms Laski's claim, but were not made. Where appropriate I note but do not determine them. FINDINGS 14 At the centre of this aspect of the proceeding is Ms Laski's reliance on the 2011 loan agreement to which I have referred at [6] above. Without that agreement, she cannot be considered a secured creditor of Swishette because no other evidence or argument was presented by her, or by the other respondents, to justify her claim to have had a caveatable interest in the Brighton property. No claim in equity was advanced, and in accordance with s 53(1)(a) of the Property Law Act 1958 (Vic), an agreement purporting to give Ms Laski an interest in the Brighton property was required to be in writing. The only agreement capable of meeting the requirements of s 53(1)(a) of the Property Law Act was the 2011 loan agreement. Mr Laski and those advising him were, I infer, well aware of that. So much is clear from a reference to s 53(1)(a) that is contained in written submissions filed by Mr Laski and Swishette on 1 June 2016. 15 Therefore, it was necessary for a factual and legal connection to be made between the 2011 loan agreement and the money transfers in late 2014 and then in early and mid-2015. It was also necessary to characterise those money transfers as loans. Ultimately the ACCC contended the transfers were not loans but made no positive submission about how they should be characterised. 16 My findings on these matters are structured in the following way. First, I consider the evidence from Ms Laski and Mr Laski about the nature of the four money transfers made by Ms Laski. Next, I consider the 2011 loan agreement, making findings about its terms and subject matter, and explaining why I conclude that it was a separate contract which was never performed. Under the heading "Resolution", I then explain why I have concluded that the money transfers in late 2014 and early to mid-2015 are properly characterised as personal loans from Ms Laski to Mr Laski, unconnected with the 2011 loan agreement. I also explain my reasons for concluding the caveat was a device, designed to give the impression Ms Laski was a secured creditor, although she was not. The evidence about Ms Laski's dealings with Mr Laski 17 Ms Laski's evidence was that she earned her own money, through her work in the fashion business, and through property development. She admitted to doing some acting work but said the last time was about "three years back". She said that "at the moment" she working as a cleaner. Her evidence was that she was currently living in rental premises, but owned a unit in Toorak which she was renting out. She agreed that when she divorced Mr Laski (which she said occurred in the late 1990s) as part of the family law property settlement a property in Hawthorn was transferred to her by Mr Laski. She agreed that despite the divorce she "looked after" Mr Laski's companies for him from 2000 to 2005 while he was bankrupt and that she had been a director of a number of his companies during that period, although she stated that her directorships were "on paper" only and that she "didn't direct anything". I infer from her evidence, and it is consistent with the evidence given in the principal proceeding, that Mr Laski in reality continued to control, and make all substantive decisions about, the companies of which Ms Laski was notionally a director. 18 Ms Laski was cross-examined about her affidavit evidence, in which she deposed that: Neither Mr Laski nor any of his companies have any interest in any of my property development or affairs. 19 She said she made this statement because she thought Mr Laski might have tried to convey a different impression in these proceedings. As I note below, in my opinion there is more contact and communication between Mr Laski and Ms Laski than either was prepared to admit to, and I am not satisfied there is a sufficient basis in the evidence to make a finding that Mr Laski does not have any "interests" in Ms Laski's property developments. It is not a necessary finding for the present matters to be determined. 20 As I have noted above, Ms Laski maintained that the money she had transferred to Mr Laski was by way of loans. Her evidence was that Mr Laski requested she lend him money for use in his business operations, and that he had "continually pressured me to lend him money over the years". She stated that Mr Laski had always repaid these loans, except for the current outstanding loan of $215,000. She gave no details about previous loans to which she referred. 21 In contrast to her affidavit evidence that Mr Laski had always repaid the loans, in an email to Mr Laski dated 9 February 2015 and annexed to her affidavit Ms Laski described Mr Laski's repayments in the past in the following way: [y]our repayment record is rather haphazard and some times hit and miss 22 This is but another example of the inconsistencies in Ms Laski's evidence and, in my opinion, of her desire in her evidence to this Court to cast particular matters in ways she considered would suit her claim as a secured creditor and the image of herself she wished to present to the Court. 23 Ms Laski's affidavit evidence about the three loans she claims to have made to Mr Laski (putting to one side the more historical debt of $10,000 which is included in the claim for $215,000) was as follows: In October 2014, Mr Laski requested that needed $50,000 to meet business commitments. I advanced the amount of $50,000 by way of loan. In February 2015, he again started to pressure me and requested a further $105,000. He stated that this money needed for 500 boxes of cigarettes and that he needed the money to pay the monthly mortgage payments on the Brighton Property at 5 Maroona Rd Brighton. I emailed him on 9th February 2015 telling him that I felt pressured and it was causing me a great deal of stress. On 10th February 2015, Mr Laski emailed me advising of the loan and agreeing to grant me a caveat over the Brighton Property. Now shown to me and marked annexure TALl are copies of emails sent to him on 9 February 2015 and his reply to me, at 2.17 am 10th February 2015 pleading for further funds. As consequence of his promise to give me a caveat I paid the amount of $105,000 by way of loan. During the next few months I reminded Mr Laski that he had to organise the caveat. In June 2015, he again contacted me and stated that he had needed another $50,000 because the lady who was funding the cigarette deal had "pulled out" and he needed the funds immediately to import the goods. I told him that he had not given me the caveat as promised and I would not be lending any further money. He told me that the house had been sold and that he would get me a caveat and I would be paid at settlement which was going ahead in September 2015. Due to his pressure and stress he put me under I paid the additional $50,000. 24 The text of the emails to which Ms Laski refers in the second paragraph of the extract above should also be set out. Ms Laski's email of 9 February 2015 stated: Rodney ....once again you have pressured me in the hugest loan to date from me ..in the past it's been only $10.000or $20.000..I'm so deeply distressed .. your repayment record is rather haphazard and some times a hit and miss. I feel that since the divorce I do not owe you any loyalty any more.. You can now stop worrying as you have now put this worry on me, at the most vulnerable time in my life where I have been told by doctors to be stress free and have absolutely no worries ...this being due to my heart condition. I'm so worried about the huge amount of $165.000 leaves me with only $305.000 for the build and I need to live as well ...hoping to go to Thailand to meet up with David and Jane from France. As we both know that if this doesn't work for you I'm seriously screwed ...and you know that it's a fact. If you really had regard for me I think you would take a mortgage on your $2.000.000 home after all you only have a borrowing of $200.000 I'm going so against my better judgement....with all your fabulous rich friends all I can ask why me? Can't you find another idiot to pressure? I'm waiting for my email and its 12.00pm 25 Mr Laski's reply of 10 February 2015 stated: Tania, I just woke to check my iPad and it's been on charge for 2.5 hrs. Only 40% charged . Must be something wrong with it. To outline what we discussed. A further loan of $105000.00 is required to cover the order of 500 bus. Of cigarettes from Indonesia. There are 50 cartons in each box that sell for $120.00 per carton. The shipment order converts to $400,000.00 after taxes and duties are paid. I made the commitment to the factory on the basis of the commitment/order of that stupid women I was dealing with, who told me yesterday morning she was not going ahead. [This, I infer, is a reference to Ms Lauris Fahey: see Principal Judgment at [28]-[29].] After speaking to you yesterday what was agreed...I will give you a Caveat on Maroona Rd. Brighton for $165,000.00 to cover this loan of $105000.00 plus the $60000.00 that I owe you. Your loans to me are fully secured,and I will pay them out in 5 months ,the stock will take a month to manufacture, then it will arrive here 10 boxes at a time. As the money comes in the debt will be reduced monthly. I spoke to the factory to nite,they are 2 hrs. Behind,and I said I would T/T funds on Wednesday morning.the only change is I won't go there as I need to be here for you,when you are operated and convalescing afterwards. I am worried about you,still love you,and I will be here for you. Please text me Danielle's number,and Tims number so I can put them in my phone memory. The loan to me can be repaid,as the money comes in as I have orders for 40 boxes straight away,shows a nett profit of $32000.00. ..or $800 .per box. The backstop is refinancing with Citibank who have offered me $1 million dollars on a hassle free no documentation loan..but it takes 6 to 8 weeks for them to process. I'm seeing Quayle Thursday to email them what they need...documentation wise. Darling I've caught short because of the bad publicity,which has slowed the business,but not stopped it. I have 6 files on the go for placement and now Sam Kekovich is back working for me doing placements...mainly cooks/chefs in pubs. Your money is a life saver,please don't say no,I can always as a last resort sell the house and repay you if nothing else works...there is plenty of equity, plus I have $150,000.00 equity in Wallan.I'm paying down debt,but cashflow is lumpy,won the Court case against Palmer last Monday and we will win in April,then I will hit him with a Writ for $800,000.00. But everything must be done step by step,and it takes time. But with Pros help it is all getting there. Please Darling don't stress, I am a person that is always positive,never negative,never give up or get depressed. I don't like to mention it,but all those years fighting OTTO I was there to support you. I could have said this is all too hard,but I didn't. You and me against all those people,,Erikson,Mc Kernan ,Helcutt etc. I put up with it all...never running away from the fight. We have been through a lot together,and I always tried my best with and for Danielle only to be traded in for OTTO ,which is something I think she regrets...a bad judgement call at the time. That's life...always stay positive..tomorrow is another day ,chin up ,your health will improve after the Op. I know I have been there on 2 occasions...on life support on 4 occasions. But you must stay positive,and everything will be alright. I'll be there for you,nothing has changed. Love Rod. Please call me after you have been to the Bank...you are my only hope...please understand that. If you want the Caveat in Danielle's name in preference to yours, please let me know..it will be prepared accordingly. 26 Ms Laski confirmed in evidence that the person referred to in these emails as Danielle is Ms Laski's (but not Mr Laski's) daughter. 27 A number of features of this evidence should be noted. 28 First, there is no reference to the 2011 written loan agreement, on which Mr Laski, Swishette and Ms Laski rely. In particular, there is no reference by Mr Laski in his email to Ms Laski of that loan agreement. While there is a reference to the Brighton property and to a caveat, the proposal of a caveat appears to be proffered by Mr Laski as some kind of reassurance, especially given the reference to Ms Laski's daughter, Danielle (who has no connection with the 2011 loan agreement). There is no other apparent connection with the 2011 loan agreement, and Mr Laski is the person who could have been expected to refer to it, if these loans were in reality being made pursuant to that agreement. I return to the loan agreement below. 29 In her first affidavit filed in this proceeding on behalf of Clinica and Mr Laski, Ms Laski does refer to the 2011 agreement, and annexes it to her affidavit. I note this affidavit discloses it was prepared by Mr Franzese, on behalf of the respondents (who were at that time only Clinica and Mr Laski). 30 The language in that affidavit does not resonate with the language in Ms Laski's second affidavit, being the one prepared substantially by her for the purposes of this current application. For example, paragraphs 4 and 5 of her first affidavit state: Now shown to me and marked exhibit TL1 is a copy of a loan agreement dated 2 February 2011, entered into between myself, Mr Laski and Swishette Pty Ltd. It was a term of this agreement that Swishette Pty Ltd who was the owner of 5 Maroona Road Brighton was to guarantee all loan funds and would grant a charge and mortgage as security for the loan funds. 31 This is formal, legalistic language. I infer it was drafted by Mr Franzese and not Ms Laski. The focus in this affidavit on the 2011 loan agreement was the respondents' focus, not Ms Laski's. That is because the loan agreement is the only source of any purported legal obligation imposed on Swishette to repay money to Ms Laski, and therefore the only source of any possible claim against funds from the sale of the Brighton property. The 2011 loan agreement was evidence upon which the respondents wished to rely so as to carve out of the funds available to satisfy any court orders the sum of $215,000. In my opinion it is likely Mr Laski believed he might be able to claw this money back from Ms Laski in some way, or at least have it "re-lent" to him, whereas if it was to remain in the ACCC's control and possibly subject to court orders, he would lose all possibility of access to it. At the least, a payment of $215,000 would expunge Mr Laski's debt to Ms Laski. Ms Laski's evidence, including the emails sent to her by Mr Laski, do not persuade me that Mr Laski had any real intention of advancing Ms Laski's interests in the $215,000 by relying on this affidavit: rather he sought to keep the $215,000 out of reach of any court orders. 32 Another indication that this affidavit was not drafted by Ms Laski herself, and does not necessarily reflect her own recollection, is that in paragraph 11 the affidavit states: On 9 June 2015 I [that is, Ms Laski] lodged a caveat over the land situated at 5 Maroona Road Brighton…. 33 Ms Laski's clear evidence, confirmed in Mr Laski's evidence in cross-examination, is that Mr Laski lodged that caveat. Mr Laski also confirmed that it was lodged on 9 June 2015. By contrast, Ms Laski stated that she did not know the exact date of lodgement. That Mr Laski lodged the caveat himself, on 9 June 2015, is clear from the caveat itself, which Mr Laski exhibited to his 20 April 2016 affidavit. A further example of inconsistencies between the drafting of Ms Laski's first affidavit and the facts is the difference between the date ascribed to the 2011 agreement in the affidavit (2 February 2011) and the date the agreement itself bears (18 February 2011). Ms Laski was at a loss in cross-examination to explain this discrepancy. I infer that is because she did not compose her first affidavit herself. 34 Accordingly, I am not prepared to place any real weight on the narrative of events as set out in Ms Laski's first affidavit. That narrative was, in my opinion, constructed to advance the interests of Mr Laski in the principal proceeding. 35 Second, the arrangement about the proposed caveat did not arise until Mr Laski's email of 10 February 2015. This confirms the view I have formed and set out below that the caveat was no more than a device on the part of Mr Laski (and, through him, Clinica). The caveat was a device to attempt to link the loans from Ms Laski to the 2011 agreement and thus keep the $215,000 out of the reach of court orders. On the part of Ms Laski, the caveat was a way to put additional pressure on Mr Laski to repay her money. I find she had no regard to whether she had any caveatable interest in the Brighton property. She was interested in the fact of a caveat and its capacity to pressure Mr Laski, not whether it had any sufficient legal basis. It is obvious from subsequent events that Ms Laski never intended to obstruct the sale of the Brighton property, nor to defend any proceedings challenging her claim to a caveatable interest. That is because she remained essentially in the same camp as Mr Laski, and was not a protagonist. When requested, she simply agreed to the withdrawal of the caveat. This lends weight to my view that the caveat was a device, and no more. 36 Third, in her 6 April 2016 affidavit Ms Laski refers to three loans: a loan of $50,000 in October 2014, a loan of $105,000 in February 2015, and a loan of $50,000 in June 2015. The total of those amounts is $205,000, but Ms Laski deposes that she is owed a total of $215,000. The remaining $10,000 is explained by a loan of that amount made by Ms Laski to Mr Laski on 27 April 2010, to which she deposes and provides documentary evidence in her 19 August 2015 affidavit, but which she omits to mention in her 6 April 2016 affidavit. In his affidavit sworn 20 April 2016, Mr Laski deposes that he had previously borrowed $10,000 from Ms Laski on 27 April 2010. I note this is prior to the 2011 written agreement. Ms Laski's emails also refer to this loan. For example, her email of 14 September 2015, after dealing with the $205,000 in other loans, then states: There is also the $10.000 that I believe you overlooked.. 37 I accept that there was an initial loan of $10,000, which is proven by a combination of this evidence, Ms Laski's evidence in her first affidavit and the transaction record annexed to that affidavit. However, the existence of this loan demonstrates that Ms Laski could, and did, engage in separate, ad hoc, loan arrangements with Mr Laski personally. The 2011 loan agreement was a different arrangement altogether. 38 In my opinion the account given by Ms Laski in her 6 April 2016 affidavit should be considered as her more unprompted and reliable account. In contrast, I found Ms Laski quite capable, during her oral evidence, of tailoring what she said to suit the circumstances as she then perceived them. 39 For example, in cross-examination when she was asked about her understanding of the purposes for which Mr Laski needed the funds, Ms Laski's answers were evasive. She attempted to insist the funds were to be used to pay the mortgage on the Brighton property, and was unwilling to accept the clear evidence to the contrary: So when you paid the $105,000 in February 2015, did you know that money was going to be used for the business?---No. I thought it was for the mortgage – originally for the mortgage but it doesn't matter – it's a loan. Well, I'm not asking you whether it matters or not. How long – how much after you paid the money did you find out that it was going to be used for the cigarette business?---When he – I'm not sure when he actually sent me an email about it specifically. Well, was it around the same time? Was it a lot afterwards?---It would be here somewhere. Well, I'm suggesting to you that when you paid the $105,000 in February, you knew full well that it was going to be used for the cigarette business. Do you agree?---No. Right?---I've even got, somewhere, the slip for his mortgage. He gave it to me. Probably in my bag somewhere. And you accept that you paid the moneys on – well, you've still got page 1348 open in front of you in the other book?---Yes. You paid the $105,000 on 10 February 2015?---Well, that's what it says here. Yes, at 9.47. So what – you actually go into the bank, do you, at 9.47 and make the payment?---Yes. I went there under pressure because you need to know Rod to know that it's pressure. Yes. And so, you go to the bank and you ask them to make the transfer?---Yes. And if you look at the other bundle, so the paginated bundle – go back to the other one – if you go to page 9, you will see there, at the top it says "An email from Rod Laski dated 10 February 2015 at 2.17 am" to you: Tania, I just woke to check my iPad – etcetera – to outline what we discussed, a further loan of $105,000 is required to cover the order of 500 BUS of cigarettes from Indonesia. There are 50 cartons in each box that sold for $120 per carton. Is that an email that you received on 10 February?---I did. However - - - And you received it before you made the transfer. Do you agree?---Rod - - - I'm asking you a "yes," "no" question?---No, I'm trying to explain. No, I have to explain this because otherwise, you're going to make me say whatever it is you want me to say. Rod has a lot of businesses on the go and he likes chatting about them – right – so he may have well and truly chatted about them and I was still – and I'm listening. He's doing this, he's doing that and he's doing the other and I didn't realise that that 105 was to go to cigarettes. I'm sorry. I thought it was for the mortgage. That was it. So you describe the email exchanges between you and Rod as just chatting. That's all they are, aren't they?---Yes. They're just chats?---No. They're not chats. They're – they're – they're – they're – he won't talk to me, so I have to send him an email. Right. In fact, nobody would talk to me about this – nobody. Mr Franzese wouldn't say anything to me. He told me not to – to go away. Rod wouldn't talk to me, you didn't ring me and tell me what the problem was and Mr Bigos didn't ring me either, for no reason. If you turn to the last page in that bundle, page 104. Do you see that?---Yes. There's an email that you send to Rod on 14 September 2015: Hi Roddy – And then next paragraph says: You probably don't remember, but you did take my bank statements to confirm the $205,000 that I had to transfer to your bank, $50,000 for your house payment, the other 155,000 you urgently needed for Sigmart Proprietary Limited. ?---Well, that's what eventuated out of that. And you accept that you were told at the time that the $155,000 was urgently needed for Sigmart?---Sigmart was the – the name that he gave me to put the moneys in, you know. I mean, I don't know what Sigmart was or is. I do know. Well, I suggest to you that you did know at the time that Sigmart was the cigarette business company?---Well, he told me that he was doing cigarette business, but I don't really – you know, I can't sort of say that I knew much about it, really. [I note that in the passage above, "Cigmart" was transcribed as "Sigmart". Nothing turns on that misspelling, which is a transcription error only.] 40 By the time she gave evidence, Ms Laski well understood the need to connect the loans she had made to the Brighton property, if she was to establish herself as a secured creditor. In my opinion, in evidence such as that which I have extracted above, that is what she attempted to do and resorted to general disclaimers when faced with other evidence that undermined what she said. 41 There were many aspects of Ms Laski's oral evidence which I found unsatisfactory, and her evidence about her financial and property affairs is another example. For instance, she admitted the property she owns in Toorak is unencumbered. She then gave evidence she had never been able to secure a loan over that property, giving various reasons. 42 Yet in one of her many emails to Mr Laski, chasing him for repayment of the moneys she said she lent to him, and seemingly musing in the email to Mr Laski about how she might cover the outstanding building payments on her current property development, Ms Laski stated: I will take out a normal loan with a bank and repay $450 a week from the rent from lansell … 43 I infer that "lansell" refers to Ms Laski's unencumbered property in Toorak. These significant discrepancies in her evidence remain unexplained. 44 Aside from snippets such as this, Ms Laski gave no evidence about how she has been able to fund her property developments. She described those developments in the following way Well, I did Toorak – I bought a house in Toorak Road and I did that and then I did a – bought a house in Camberwell and I did that. Then I did up the flat that I'm in at the moment. No, I'm not in it now because I've had to rent it due to the fact that I've no money and now I'm trying to develop a property in Dandenong Road. 45 When asked how she managed to fund all these developments (bearing in mind her earlier evidence about not being able to get a loan) she stated, in an entirely unconvincing and opaque answer: Because I always bought under. I bought properties under the price, you know. 46 Her evidence was that that she had "made" approximately $1.5 million from these property developments. She gave no evidence about how she came to have relatively large sums of money immediately available to lend to Mr Laski as and when he asked for it. 47 In general terms, I was not inclined to believe much of Ms Laski's oral evidence. I find Ms Laski was prepared to discount, and play down, her ongoing relationship with Mr Laski, and avoided giving evidence about the nature and closeness of it. For example this exchange occurred in cross-examination, What's your relationship now with Mr Laski? Are you close? No. He – he left me. 48 That evidence is not consistent with the tenor and content of the considerable number of email communications in evidence. 49 The emails annexed to Ms Laski's second affidavit disclose an ongoing and close relationship, albeit affected by considerable frustration on Ms Laski's side. The tenor of almost all of Ms Laski's emails to Mr Laski resembles that of her email of 9 February 2015 above. It is certainly not a tenor reflecting an entirely business-like arrangement. Nor is it a tenor which reflects formality or distance. Rather it seems to me to represent a somewhat volatile and uneven relationship that has considerable emotional and personal aspects to it. Those matters inform and support my findings that the transactions between Ms Laski and Mr Laski were the result of ad hoc approaches to Ms Laski by Mr Laski, as and when he needed further funds because he saw Ms Laski as an easy target for such requests. 50 Where it is relevant to the findings I make, I have referred to Mr Laski's affidavit evidence and his oral evidence on the present issue. In the Principal Judgment at [188] and following, I expressed my views about the reliability of Mr Laski's evidence and I adhere to those views. Accordingly, I place no weight on his evidence that the four advances from Ms Laski were connected with the 2011 loan agreement: that, in my opinion, is a reconstructed position by Mr Laski designed to carve out from the funds on which orders of the Court could operate the sum of $215,000. His evidence in his recent affidavit about the purposes for which he used the funds lent to him by Ms Laski, and how he determined to move funds between various companies controlled by him, provides no legal basis for Ms Laski to be recognised as a secured creditor over the Brighton property. 51 What is of some weight are Mr Laski's statements in his emails to Ms Laski. They reveal a person with the kind of self-interest and capacity for misrepresentation I have outlined in the Principal Judgment. However what they also reveal, in my opinion, is that Mr Laski well understood that he was under an obligation to repay the funds advanced to him by Ms Laski. He was not treating the funds as a gift, or an advance that had been made without the assumption by him of an obligation to repay. For example, on 15 September 2015, Mr Laski wrote: I will meet you to explain what has happened. All will be well and you will get the money you are owed. 52 On 11 December 2015, Mr Laski stated: Yes you did lend me $215000 and it will be repaid to you as soon as the Court releases all of Swishettes funds the proceeds of the sale of the Maroona Rd. 53 Mr Laski's affidavit evidence also admitted that the funds paid by Ms Laski to him were loans. The 2011 loan agreement 54 The only way in which it is suggested by the respondents that Ms Laski had a legal entitlement to funds from the sale of the Brighton property is that she held a charge over the property, granted to her by Swishette as part of a written loan agreement dated 18 February 2011. That agreement identifies Ms Laski as the lender, Mr Laski as the borrower, and Swishette as the mortgagor and guarantor. It is signed by Ms Laski on her own behalf and by Mr Laski on his own behalf and as director of Swishette, but the signatures are not witnessed. The present controversy concerns the subject matter of the loan contract. In my opinion, and in accordance with the interpretation principles I set out below, the subject matter is clear from the document itself, and is not that for which the respondents and Ms Laski contend. 55 The principles applicable to the construction of contracts are well settled. In Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; 219 CLR 165 at [40] the plurality set them out: This Court, in Pacific Carriers Ltd v BNP Paribas, has recently reaffirmed the principle of objectivity by which the rights and liabilities of the parties to a contract are determined. It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe. References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement. The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. That, normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction. (Footnotes omitted.) 56 See also Maggbury Pty Ltd v Hafele Australia Pty Ltd [2001] HCA 70; 210 CLR 181 at [11]. 57 It is as well to recall what the plurality said in Toll at [35]-[36] about witness evidence concerning written contracts: A striking feature of the evidence at trial, and of the reasoning of the learned primary judge, is the attention that was given to largely irrelevant information about the subjective understanding of the individual participants in the dealings between the parties. Written statements of witnesses, no doubt prepared by lawyers, were received as evidence in chief. Those statements contained a deal of inadmissible material that was received without objection. The uncritical reception of inadmissible evidence, often in written form and prepared in advance of the hearing is to be strongly discouraged. It tends to distract attention from the real issues, give rise to pointless cross-examination and cause problems on appeal where it may be difficult to know the extent to which the inadmissible material influenced the judgment at first instance. In Codelfa Construction Pty Ltd v State Rail Authority of NSW, Mason J observed: "We do not take into account the actual intentions of the parties and for the very good reason that an investigation of those matters would not only be time consuming but it would also be unrewarding as it would tend to give too much weight to these factors at the expense of the actual language of the written contract." (Footnote omitted.) 58 Some of the evidence and argument in the present case, especially on behalf of the second and third respondents and Ms Laski (but also that adduced in cross-examination), fell into the categories described by the plurality in these passages. Where I refer to such evidence, I do so not for the purpose of using it to inform my conclusions concerning the proper construction of the subject matter and terms of the 2011 loan agreement, but rather for the purpose of illustrating why I consider it to be clear that what happened in 2014 and 2015 was not the performance of the 2011 loan agreement, and my conclusion that the 2011 loan agreement was never performed. 59 By cl 1.1, the "Loan" which is the subject of the agreement is defined as "the amount of $600,000 to be advanced by the Lender to the Borrower pursuant to the terms of this Deed". Clause 2 required Ms Laski to "promptly advance" the Loan to Mr Laski. It is common ground and Ms Laski admitted that she did not advance to Mr Laski the amount of $600,000. Her oral evidence was: You didn't lend any money?---Not then, no. I didn't lend money on this document because I was going to lend money and it didn't go ahead. It didn't go ahead. And there's – above that it refers to: "Loan" means the amount of $600,000 to be advanced by the lender to the borrower Can you see that? And, again, you say that that loan never went ahead?---No, it didn't go ahead. But, in fact, there was never any loan made under this loan deed, was there?---No, because whatever it was for it didn't go ahead. 60 That evidence is consistent with Mr Laski's own, somewhat unguarded, evidence about the circumstances in which the 2011 loan agreement came to be concluded. In oral evidence, Mr Laski said the $600,000 concerned a different venture by him that never came to fruition. In evidence in chief, Mr Laski stated: … the agreement was put in place because I was chasing a labour hire licence, so to speak. 61 In cross-examination, he stated: The loan deed goes back to 2010 or '11 when I was going for the labour hire agreement which Erskine Rodan, the wonderful solicitors, put in the submission and forgot to put in the financials… 62 Later, in Ms Laski's examination by Mr Franzese, some attempt was made (by both Mr Franzese in his question and Ms Laski in her answers) to re-establish a connection between the 2011 loan agreement and the three amounts advanced to Mr Laski between October 2014 and June 2015. The following exchange occurred: Now, in your evidence questions from Dr Bigos, you say you didn't provide the money under this deed?---Well, it wasn't required. What are you referring to?---Well, originally there was 600,000 that Rod wanted to borrow. That's what I'm referring to. [The next question was correctly the subject of an objection for leading.] 63 As I have noted above, it was a term of the 2011 loan agreement that Ms Laski as the lender "promptly advance" the $600,000. Not only was there no prompt advance, there was no advance at all, as Ms Laski admitted. The bargain struck by this agreement was simply a different bargain to those made between Ms Laski and Mr Laski on the four occasions up to mid-2015. So much is clear from Mr Laski's own evidence to which I refer at [60] above. 64 The 2011 loan agreement also provided for interest at the rate of 9% per annum. Ms Laski did not advance a claim for interest in relation to the proceeds of sale from the Brighton property until such a claim was suggested to her in cross-examination by counsel for the ACCC, and even then she indicated that she had not calculated the precise amount that would be payable. I consider the fact that she had not previously claimed interest (and did so only when prompted) to be another indicator that, prior to making the current application, she was not operating on any understanding that the four transactions in which she lent money to Mr Laski were the performance of the loan agreement. Indeed the first could not be, because it pre-dated the 2011 loan agreement. 65 The "Settlement Amount" is defined in cl 1.1 as being "the amount of $600,000 to be paid by the Borrower to the Lender pursuant to the terms of the Deed". 66 By cl 3.1 that settlement sum was to be paid by Mr Laski to Ms Laski "on or before 31 December 2016". Clearly the date for performance of that term has not yet passed, but the evidence is that no loan in the sum of $600,000 has been advanced by Ms Laski pursuant to cl 2. Therefore, no settlement sum could become repayable by Mr Laski on or before 31 December 2016 (or earlier if Mr Laski so chose: cl 3.2). 67 Further evidence supporting the conclusion that this loan agreement was never performed is the absence from the oral, affidavit or documentary evidence of any references to 31 December 2016 as the repayment date. None of the contemporaneous evidence suggests the parties were acting on the basis that the loans made by Ms Laski were not repayable until 31 December 2016. Indeed, to the contrary, Ms Laski was demanding repayment in 2015. Mr Laski was not resisting repayment on the basis of cl 3.1 of the loan agreement. 68 It was common ground in the evidence that no mortgage documentation was drawn up as the agreement contemplated, and no mortgage was registered on the Brighton property in Ms Laski's favour. It may be noted that the recitals to the loan agreement state that Ms Laski's agreement to advance the Loan to Mr Laski was "subject to and conditional upon" Swishette providing both a registrable second ranking mortgage over the Brighton property and a charge over the property to secure its guarantee. Again, the absence of any mortgage documentation is consistent with the conclusion that this agreement was never performed. 69 In contrast, Ms Laski's submissions in advance of the hearing really only went as far as relying on the fact of loans by her to Mr Laski, supported by a caveat over the Brighton property. Her written submissions never descended into any specific claims about how she had a basis to lodge a caveat over a property of which Swishette was the registered proprietor, other than a one-line submission to the effect that "there was an agreement for Swishette Pty Ltd to secure the loan by caveat on the property at 5 Maroona Road Brighton". 70 As I note below, this agreement was adduced as an annexure to Ms Laski's first affidavit, relied on not by her but by Mr Laski and Clinica in the principal proceeding. 71 Ms Laski's evidence in that affidavit was: In or about 2011, [Mr Laski] requested that I lend money to him from time to time. The purpose of the loan funds was to use in Mr Laski's business operations. 72 That evidence is at odds with the terms of the written agreement as I have set them out. It could have been the subject of an objection as to admissibility and should not be considered. In any event, when Ms Laski came to give affidavit evidence to support her personal interests in access to the funds from the sale of the Brighton property, as I note below, she did not refer to the 2011 agreement at all. Rather she deposed that she had lent Mr Laski money from time to time and he had always repaid it, although as I also note at [21] above, in early 2015 she accused Mr Laski of not repaying her on previous occasions. For present purposes, the key point is that Ms Laski did not rest her own entitlement to the sum of $215,000 on the 2011 loan agreement. In cross-examination by Mr Franzese, Ms Laski gave the following evidence: MR FRANZESE: For page 1330 of the court book. It's a document marked TL1. It's a loan deed?---This is it. Yes. Yes. Do recognise this document?---That's a very old document. Yes?---I have – yes. Can you explain to the court how this came to be produced?---Well, it was – it was a document I made for Rodney to have access to moneys as a loan. And can you explain to the court what was the purpose of that loan?---Well, he needed it for his business at the time. Okay. And are you aware what specific business he was doing?---I – I don't recollect exactly but he was – he needed it to us[e] in his business. And was any money lent under the loan deed?---Not at that time. No. Okay?---Because whatever he was doing, he didn't need - - - 73 Ms Laski is then cut off by Mr Franzese, whose clients' whole case was based on establishing the very connection Ms Laski had just denied. Instead, Mr Franzese moved on to ask Ms Laski about the caveat. The following exchange occurs: Yes. Now, what agreement or right do you say you had the right to lodge that caveat?---Well, I had the – the agreement that he – he made out which was a standing agreement for him, like, being lent moneys from me for his business and for his house. And do you – which agreement do you say that is?---Well, the one of 2011 and – and I keep – I keep referring – I kept referring to that agreement because there's a nine per cent interest that would be paid on my moneys from it. 74 I do not believe this part of Ms Laski's evidence. In my opinion Ms Laski had become aware, during the currency of this application, that it was important to link her claims back to the 2011 loan agreement. I infer she gained this understanding either from Mr Laski or Mr Franzese or both. Mr Franzese's role, as a legal practitioner first for Clinica and Mr Laski, then for Swishette and Letore as well and, on the evidence, in his ongoing dealings with Ms Laski about her claims, has the potential for some considerable conflict of interest in this proceeding, but I make no express findings against him. It is incongruous that Ms Laski would refer to the 9% interest in the 2011 agreement when she had not referred to this agreement at all in her main affidavit supporting her claim, and indeed has not made a claim for any interest on the money she lent. 75 Ms Laski was asked in cross-examination by counsel for the ACCC about the structure of the 2011 loan agreement. The inconsistencies between her answers and the document itself, and her apparent unfamiliarity with it, support my conclusion that the subject matter of the 2011 loan agreement was a separate bargain for a venture that did not proceed. This was the exchange: That names you as the lender, Mr Laski as the borrower and then Swishette is named as the mortgagor and the guarantor. Can you see that?---Yes. Why was Swishette named as a guarantor and a mortgagor?---Why would I know that? So you had nothing to do with including that in there?---I don't know what that – why are you asking me these questions because I don't understand business. I'm not a businessman. Yes?---A woman, sorry, no, person. And so you don't know why Swishette and – Swishette was granting a guarantee and a mortgage to you?---Because the mortgage that they were – no, what is that exactly, ask me again. You don't know why Swishette was granting a guarantee and a mortgage to you?---Because I was going to be lending them money. And did you ask for them to be named as guarantor and mortgagor?---No. No?---I am not a business person. 76 I find Ms Laski's statements about her lack of business acumen to be disingenuous. Her considerable experience in property development, itself not an uncomplicated enterprise, belies her protests that she does not "understand business". Similarly, the content of many of her emails makes clear that she is quite familiar with and comfortable with all kinds of financial and legal transactions for business purposes. For example: I'm so worried about the huge amount of $165.000 leaves me with only $305.000 for the build and I need to live as well... If you really had regard for me I think you would take a mortgage on your $2.000.000 home after all you only have a borrowing of $200.000 77 And: So I'm presuming that rod has sent me that creative cigarette letter as proof that I made a bad business decision and the cigarette business failed, and he gets to keep the money ..... very clever. If he used the $215,000 he would have earned it all back from the sales. 78 Ms Laski's own evidence filed in support of her application did not, as I have noted, place any reliance on the 2011 loan agreement. She was asked in cross-examination about whether the terms of the 2011 loan agreement were fulfilled. This was her evidence: Did you ever – was that ever provided to you, a: …mortgage over the land in registrable form. ?---No, because that didn't go ahead. There was no money. I didn't have – I didn't pay any moneys. You didn't pay any moneys after this document, did you?---No, not then, no. No. And did you ever pay moneys under this document?---Well, I thought all the moneys I paid was under this document, to be honest. Well, did you ever ask for a or receive a mortgage in registrable form under this document?---Not that I can – no, I don't think so. And - - -?---Because it never went ahead. - - - you never registered any charge or security over Swishette's properly – property?---I didn't lend any money. You didn't lend any money?---Not then, no. I didn't lend money on this document because I was going to lend money and it didn't go ahead. It didn't go ahead. And there's – above that it refers to: "Loan" means the amount of $600,000 to be advanced by the lender to the borrower Can you see that? And, again, you say that that loan never went ahead?---No, it didn't go ahead. But, in fact, there was never any loan made under this loan deed, was there?---No, because whatever it was for it didn't go ahead. 79 The assertion in the middle of this extract, which I have italicised, is in my opinion a self-serving reconstruction by Ms Laski. The last half of this evidence reveals she was unable to adhere to her reconstruction, even for a short period of time. 80 Finally, there are statements in Ms Laski's emails which confirm she did not understand there to be any connection between the 2011 loan agreement and the three loan transactions in 2014 and 2015. These statements were made in a context where, in my opinion, she was focussed on her entitlement to repayment by Mr Laski in the way she truly understood that entitlement, without her statements being coloured by what Ms Laski understood, by the time of her final submissions after the hearing, needed to be proved for her to be considered a secured creditor in relation to the proceeds of sale from the Brighton property. An early example of how she saw these loans as separate is what she said in an email to Mr Laski on 9 February 2015: If you really had regard for me I think you would take a mortgage on your $2.000.000 home after all you only have a borrowing of $200.000… 81 This is clear evidence from a time prior to the commencement of the freezing orders that Ms Laski well understood she had no secured claim over the Brighton property, although the 2011 loan agreement had expressly contemplated a mortgage. 82 For example, on 11 December 2015 she wrote to Mr Franzese, saying: And as you know he is marrying Nam in the new year…and should anything happen to him, there is not going to be a hope in hell of me having access to my loan to him…as there is no physical proof of the loan and as his wife she naturally inherits his estate 83 Earlier, on 16 September 2015, Ms Laski had written to Mr Laski in the following terms: Hi Roddy The loan to your verbally was for bank loan repayment of your house… You absolutely swore to me the loan would only be for 5 months… I need to decide if I can go ahead with my builder [or] not, the money you owe me is specifically for that… I have spent money for the prep work on the place and I do not want to have to sell it just because I was stupid to trust your word. 84 On 22 September 2015, she wrote: You have conned me into signing the release of the caveat against your house (you were going to transfer the money into my bank) so I now have absolutely no security for my loan. 85 On 10 October 2015, she wrote: I was supposed to have the money last June when I signed the release caveat for you to transfer the monies to my bank .... then it was september at the very latest. You haven't given me another date for the return of my money's ... is there one? 86 On 17 October 2015, she wrote: You have the release that I signed for the caveat of the sale of your house that you promised to put into my bank ...that was back in June ......well that didn't happen and I no longer have a claim on your money… 87 On 31 October 2015, she wrote: Now you tell me that the law is on Swishettes side how does that impact on the return of my money? 88 And on 20 November 2015, she wrote: Just give me an explanation as to where I stand...or if you really intend to honour your debt. 89 None of these statements provide any support for a conclusion that Ms Laski believed she was entitled to recover the loan moneys from Swishette pursuant to a guarantee given in a written agreement. Instead, they show that she believed her only recourse was against Mr Laski pursuant to verbal agreements made with him at or around the time that each loan payment was advanced. Where her affidavit and oral evidence purports to convey a different impression, I reject it. RESOLUTION 90 I accept the contentions of the second and third respondents and Ms Laski that the amounts Ms Laski transferred to Mr Laski between approximately April 2010 and June 2015 are properly characterised as loans. I referred to the basis for the characterisation of a transaction as a loan at [206]-[207] of the Principal Judgment, where I said: However, in Normandy at [67]-[72], Edmonds J also considered the essential features of a loan. At [72] Edmonds J concluded: In short, a loan is a payment of money to which there is attached an obligation of repayment upon demand or at a fixed date. At [69], his Honour referred to the observation of Gleeson CJ in Prime Wheat Association Ltd (ACN 000 245 269) v Chief Commissioner of Stamp Duties (1997) 42 NSWLR 505 at 512: The essence of a loan is an obligation of repayment. 91 On the evidence, it is clear Ms Laski paid money to Mr Laski in circumstances where she intended, and he accepted, there was an obligation of repayment. In that sense, and in contrast to the findings I made in the Principal Judgment at [208]-[210], these transactions were quite different to the transactions between corporate entities controlled by Mr Laski. They are properly characterised as loans. 92 I find that Ms Laski intended to, and did, make the loans to Mr Laski personally. The way she described the transactions in her affidavit which she prepared herself for this application is, in my opinion, the most reliable description of what she understood she was doing. As previously stated following since our separation, Mr Laski has from time to time, requested that I lend him money for use in his business operations. He has continually pressured me to lend him money over the years. He has always repaid these loans except for the current outstanding loan of $215,000. 93 It is clear Ms Laski knew Mr Laski may then use the funds in a variety of ways. Although she made assumptions from what Mr Laski told her as to how he would use the funds, as far as she was concerned it was Mr Laski she lent the money to, and Mr Laski she expected to repay it. Any reading of her voluminous emails attached to her affidavit amply supports this finding: they contain personal pleas by her to Mr Laski, relying on their past personal relationship, and on his promises and assurances to her. That is so notwithstanding that the loan advances in 2014 and 2015 were made at Mr Laski's direction to two companies with which he was associated, Letore and Cigmart Pty Ltd, as noted at [99] below. 94 It is true that the evidence discloses a number of reasons given by Mr Laski for wanting Ms Laski to lend him money. One of the reasons Mr Laski gave was to pay the mortgage on the Brighton property. Another was (for some of the loans) that Mr Laski needed to pay for shipments of cigarettes in relation to a business operated through Cigmart. A company extract for Cigmart dated 5 June 2015 shows that, while Mr Laski was not a director of the company, Letore was its sole shareholder, and Mr Laski's oral evidence clearly indicated that in substance he controlled the company and the cigarette business. 95 There is no direct evidence that the funds advanced were in fact used for the purposes described by Mr Laski to Ms Laski. In his affidavit dated 20 April 2016, Mr Laski deposed that: The financial statements of Swishette show that Cigmart Australia Pty Ltd owes Swishette Pty Ltd a loan of $158,024 for the advancement of the loan funds from monies paid by Tania Laski. This amount represents the $165,000 paid by Tania Laski in two payments of $105,000 in February 2015 and $50,000 in June 2015 and the difference being payments made by Cigmart Australia Pty Ltd to Swishette Pty Ltd as the date of the financial statement. 96 Financial statements of Swishette and Cigmart were in evidence and they do show an amount of $158,024 described as a "Loan" owed by Cigmart to Swishette as at 30 June 2015 (in the financial statement for Cigmart) and as at 30 June 2015 and 30 September 2015 (in the financial statements for Swishette as trustee for the Second Rodney Laski Family Trust). It readily can be seen that Mr Laski's evidence that this amount represents "the $165,000" paid by Ms Laski to Swishette in February and June 2015, less repayments made by Cigmart to Swishette, cannot be wholly correct because the sum of those two payments made by Ms Laski was $155,000, not $165,000. It may be that the discrepancy is due to interest payable on the loan from Swishette to Cigmart pursuant to an "understanding" between the two entities to which Mr Laski referred in his affidavit evidence, but there is insufficient evidence to make any finding to that effect. Cigmart's financial statement for the 2015 financial year also includes an inventory entry of $148,610 for "Finished goods – at cost" and an expense of $34,213 for freight and cartage. It may be that these entries represent the purchase and importation of the cigarettes to which Mr Laski referred in his emails to Ms Laski in 2015, but again the evidence is not sufficiently clear to make a positive finding to that effect. 97 The salient point for present purposes is that nothing in the accounts of either Swishette or Cigmart provides any indication that the ultimate source of the money loaned by Swishette to Cigmart was Ms Laski, nor that either company had any liability to Ms Laski for that money. In particular, Swishette's accounts do not show any liability to Ms Laski, contingent or otherwise, apart from an unrelated "beneficiary loan" to Ms Laski of $155,856. That amount, as the ACCC submits, represents the notional distribution of funds to the beneficiaries of the Trust, about which I made findings in the Principal Judgment at [294]-[297] and in ACCC v Clinica (No 3) at [84], and is not related to the loan moneys advanced by Ms Laski. The financial statement for Letore for the 2015 financial year was also in evidence and also does not show any liability to Ms Laski for a loan or otherwise. 98 I do not consider that anything in the accounts of Swishette, Cigmart or Letore establishes that Ms Laski made loans to those companies, or that any of those companies had any legal relationship with Ms Laski (such as a guarantor relationship) in relation to those loans. How Mr Laski now chooses to reconstruct the various movements of funds between the entities controlled by him cannot alter the legal relationship which existed at the time of the loan transactions between him and Ms Laski. They were in my opinion obviously loans from one individual to another, and no more than that. The fact that various reasons were given by Mr Laski on various occasions to Ms Laski about why he needed the money (and noting that these reasons changed from time to time, in my opinion to suit Mr Laski's own interests in terms of the amount of persuasion or placation he considered Ms Laski needed) does not alter the character of the loan as one by Ms Laski to Mr Laski personally. 99 All the evidence reveals are one withdrawal of funds and three bank transfers as follows: (1) On 27 April 2010, a cash withdrawal from the Commonwealth Bank at Chadstone debited against Ms Laski's credit card, in the sum of $10,000. (2) On 1 October 2014, a transfer of $50,000 from Ms Laski to Letore Pty Ltd. (3) On 10 February 2015, a transfer of $105,000 from Ms Laski to Cigmart Australia Pty Ltd. (4) On 15 June 2015, a transfer of $50,000 from Ms Laski to Cigmart Australia Pty Ltd. 100 These transactions are also described in the Principal Judgment at [84]. 101 I am not satisfied on the balance of probabilities that these four loan transactions were subject to the 2011 loan agreement. I have set out above the basis in the evidence for my conclusion that the 2011 loan agreement was an entirely separate agreement in relation to a business venture that did not proceed, so that the loan agreement was never performed. Ms Laski's most recent written submissions, filed after the hearing in this matter (and following upon the filing of the respondents' submissions making similar arguments) are in my opinion a reconstruction designed to achieve the outcome of tying her claims and the four loan transactions to the Brighton property so as to make her a secured creditor and give her priority, when in fact and in law there was never such a connection. 102 Rather, in my opinion each loan was a separate oral agreement constituted on the evidence by conversations between Ms Laski and Mr Laski. There is no basis whatsoever in the evidence to see any legal connection between the four transactions. Mr Laski sought funds from Ms Laski on an ad hoc basis, as and when he needed them. On each occasion, in my opinion, she lent him money on the basis of an obligation assumed by him to repay it. Ms Laski was not operating an open-ended line of credit for Mr Laski. Each of the four transfers was a separate loan transaction, under which Mr Laski assumed and incurred a personal obligation to repay her. As to the terms on which each loan was made, it is not possible from the evidence to discern any particular period over which the loan was made, nor any particular date by which it was agreed to be repayable. Doing the best I can, it seems to me each loan was made by Ms Laski on at "at call" basis: that is, that if and when she demanded the money be repaid, Mr Laski would be obliged to repay it, subject perhaps to the statements made by Mr Laski about periodic repayments of the 10 February 2015 loan as cigarette cartons were sold (see [25] above) and to any representations made by Mr Laski to the effect that the 15 June 2015 loan would be repaid upon settlement of the Brighton property (see [23] above). However it is simply not possible on the evidence to make findings whether any of these statements formed terms of the four loan contracts. 103 In my opinion the caveat was nothing more than a device used by Mr Laski to both persuade and placate Ms Laski when she was demanding repayment and he did not consider it in his interests (both personal and business) to attempt to repay her. There is no basis in the evidence to find that he had no access to sufficient funds to repay Ms Laski (in whole or in part) when she demanded repayment. Rather, I find Mr Laski chose not to repay Ms Laski, and chose to use funds to which he had access for other purposes. He chose, for example, not to realise other assets such as those held by Letore in real property in Wallan which, (according to the email Mr Laski sent to Ms Laski on 10 February 2015) had over $150,000 in equity. He chose not to use funds which appear to have been available from time to time through Cigmart. He chose not to employ strategies I found in the Principal Judgement he regularly employed of moving funds between, and from, the various corporate entities he controlled as and when it suited him. He simply chose not to repay Ms Laski. 104 The fact that Ms Laski only signed the caveat form on 8 June 2015, and that Mr Laski only lodged the caveat on 9 June 2015, illustrates the lack of connection between any underlying legal obligation assumed by Swishette in February 2011 and the loans made by Ms Laski to Mr Laski in 2014 and 2015. 105 The caveat was completed and lodged after this proceeding was commenced (on 14 May 2015) but before the freezing orders were made (on 4 August 2015). It was also prepared, signed and lodged after the contract of sale of the Brighton property was signed, which occurred on 4 May 2015. I also note that Mr Franzese's evidence in this proceeding was that on or about 27 May 2015 the purchaser consented to release to Swishette of the deposit from the sale of the Brighton property ($192,500), before the caveat was lodged, and yet Mr Laski made no attempt to use that money to repay Ms Laski, bearing in mind there were no freezing orders in place until 4 August 2015. 106 Ms Laski's affidavit evidence was that, at Mr Laski's request, she signed a withdrawal of caveat form so that the caveat could be withdrawn and settlement of the Brighton property could occur. In cross-examination, she was asked when she signed the withdrawal. She was taken to an email she sent Mr Laski on 15 September 2015 which relevantly stated: Hi Roddy, on or about June 11th, a week before I was to go on holidays, you insisted I sign a release form and a caveat that I have on your house… 107 In evidence, Ms Laski was unable to confirm that she signed the caveat withdrawal on 11 June 2015. She said she thought it was after she made the final loan, which occurred on 15 June 2015. If it was after that date, she said it was only a "bit" after, because her understanding was that there was to be an "early settlement" of the Brighton property and therefore Mr Laski would be able to pay her back. 108 The caveat withdrawal form was in evidence and is dated 8 September 2015. The date is handwritten and appears to be written in a different script to the signature of Ms Laski, which is also on the form. In his oral evidence, Mr Laski confirmed that he held the form for a period after Ms Laski signed it and eventually lodged it to enable settlement of the property to proceed. I infer that Mr Laski dated the form at the time he lodged it. 109 It is apparent from her evidence that Ms Laski was content to have the caveat withdrawn only a few days after she had signed it and had it lodged. In my opinion she saw the caveat as a gesture of good faith by Mr Laski, and although she understood its presence could interfere with the sale of the property (which is why she agreed to withdraw it), she saw the caveat as effective to persuade Mr Laski personally to repay her. In my opinion, her insistence on a caveat, and her regular inquiries about when one would be lodged in the email correspondence upon which she relied, were not due to any contractual rights she was asserting against Swishette. Rather, she viewed it as a way of holding Mr Laski to his personal promises. CONCLUSION 110 For those reasons, I do not propose to vary or amend the orders I made on 23 March 2016, because I am satisfied on the balance of probabilities that Ms Laski is not a secured creditor of Swishette in respect of loans made by her to Mr Laski totalling $215,000. She therefore does not have any entitlement to be paid, in priority to other creditors of Swishette, any of the funds held in the applicant's solicitors' trust account which are the subject of the Court's orders made in this proceeding on 23 March 2016. 111 It is appropriate to make a declaration concerning the absence of any such entitlement, so that the position is clear as between the parties. 112 The ACCC accepted at the commencement of the hearing in relation to this issue that it would not seek any orders for costs against Ms Laski. However, Mr Laski and Swishette have actively contended for the $215,000 to be characterised as an entitlement Ms Laski could enforce against Swishette. They have been unsuccessful in that contention and in my opinion it is appropriate they be ordered to pay 50% of the ACCC's costs of the determination of this issue. I certify that the preceding one hundred and twelve (112) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mortimer. Associate: Dated: 15 July 2016