District Court New South Wales Medium Neutral Citation: Moneytech Finance Pty Ltd v Wheeler [2022] NSWDC 493 Hearing dates: 25 and 26 May 2022 Date of orders: 3 August 2022 Decision date: 03 August 2022 Jurisdiction: Civil Before: P Taylor SC DCJ Decision: (1) Judgment for the plaintiff against the second defendant in the sum of $107,229.62. (2) All other claims dismissed. (3) The second defendant to pay the plaintiff's costs of the claim against the second defendant. (4) The plaintiff to pay the first defendant's costs of the proceedings, limited to the first defendant's disbursements. (5) No order as to the second defendant's costs of the cross-claim. Catchwords: CONTRACTS — formation — acceptance of offer – not pursued – new offer – accepted – effect on prior executed documentation – dispute – without prejudice letter – executed - whether parties had entered into binding contract to settle dispute Legislation Cited: Uniform Civil Procedure Rules 2005, r 36.16 Cases Cited: Australian Broadcasting Corporation v XIVth Commonwealth Games Limited (1988) 18 NSWLR 540 Burger King Corporation v Hungry Jack's Pty Limited [2001] NSWCA 187 Cachia v Hanes (1994) 179 CLR 403 Iacullo v Remly Pty Limited; Iacullo v Iacullo [2008] NSWSC 1176 McRae v Commonwealth Disposals Commission (1951) 84 CLR 377 Peters (WA) Ltd v Petersville Ltd [2001] HCA 45 Preston v Commissioner for Fair Trading [2011] NSWCA 40 R T & Y E Falls Investments Pty Limited v The State of New South Wales & ors [2001] NSWSC 1027 Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596 Shepherd v Felt and Textiles of Australia Ltd (1931) 45 CLR 359 Category: Principal judgment Parties: Moneytech Finance Pty Ltd (plaintiff/cross-defendant) Peter Allen Wheeler (first defendant/first cross-claimant) SAS (Sales) Pty Limited (second defendant/second cross-claimant) Representation: Counsel: Mr D Edney (plaintiff/cross-defendant) Solicitors: Force Legal (plaintiff/cross-defendant) File Number(s): 2020/00257904 Publication restriction: None Judgment A. Introduction 1. Moneytech Finance Pty Ltd provided a financial facility to SAS (Sales) Pty Limited. Moneytech sues to recover an amount owing on the facility, plus interest and costs, from SAS, and from its director, Peter Wheeler, on a guarantee executed by him. Mr Wheeler represented himself and SAS, although he is not a legal practitioner. The evidence of Mr Wheeler did not clearly distinguish between pleadings and affidavits, assertions and facts, but all were admitted without objection for what they were worth. B. Overview of issues 1. On 8 February 2019 the terms of the financial agreement between Moneytech and SAS were changed. They may have been changed again on 29 July 2019. As a result, there is a question as to the terms that applied to the finance facility provided by Moneytech, including the applicability of the guarantee signed by Mr Wheeler. SAS has cross-claimed against Moneytech alleging a breach of contract arising from circumstances connected with the change of agreement. The details of the issues require consideration of the background to the transaction. C. Background 1. In 2018, SAS applied to Moneytech for financial facilities, including to replace an existing facility with a financial institution known as Scottish Pacific.1 2. SAS provided Moneytech with recent SAS financial documents, [1] including creditor and debtor trial balances, taxation returns, profit and loss statements, trading statements, a number of copy invoices and orders, and completed application forms executed on 30 October 2018, [2] together with a payment of $1,500, being a deposit of half the establishment fee of proposed financial facilities totalling $250,000. 3. On Monday, 12 November 2018, following Moneytech's "preliminary assessment" [3] and review of the SAS financial documentation, [4] Moneytech decided to offer [5] SAS $250,000 finance comprising $150,000 debtor finance and $100,000 trade finance. A letter of offer of the same date made this offer to SAS: "Moneytech Finance Pty Ltd ("Moneytech") is pleased to offer a Disclosed debtor finance facility and a trade finance facility ("the Facilities") to S.A.S. (Sales) Pty Ltd (ABN 77 056 158 653). The Facilities are subject to the terms and conditions set out in the Moneytech Debtor Finance Agreement, and the Trade Finance Buyer Terms & Conditions, which will incorporate the terms detailed in the Term Sheet attached to this letter. Please acknowledge your acceptance of the terms and conditions of the Facilities by signing a copy of this letter and returning this to us. The balance of the establishment fee of $1,500 also needs to be paid. We will then prepare formal copies of all the facility and security documents, for execution as required. This offer will remain open for 7 days from the date of this letter, after which it is automatically withdrawn. We look forward to working with you to ensure the Facilities assist with your ongoing cash flow requirements. If you have any queries in relation to the Facilities or the steps that need to be taken before the facility is activated, please contact me at any time on [mobile phone number]." [6] 1. A document specifying the terms and conditions of the finance facilities was included. [7] It referred to the two facilities, the debtor finance facility assisting cash flow by the purchase of debtors, and the trade finance facility used to pay suppliers. The amount of each facility and the aggregate limit of $250,000 was stated. The terms included periods for repayment and noted "The Facilities are approved for an initial period of 24 months" and thereafter could be terminated on "3 months' notice by either party". [8] 2. The terms referred to two monthly fees of $1,200 and $700 and interest rates of 8.74% and 9.24% respectively for the debtor finance facility and trade finance facility and the once-only establishment fee of $3,000, of which half had been paid. 3. The terms also specified seven items of "Security & Documentation Requirements", including a Debtor Finance Agreement with SAS, a Guarantee and Indemnity from SAS and Mr Wheeler, a Trade Finance Account Acceptance Form, and Terms and Conditions and the latest mortgage statement for a property in Wamberal. [9] 4. The terms also included certain approval conditions governing the ongoing conduct of SAS and ongoing information to be provided to Moneytech, and, significantly, four "Conditions Precedent". Among the conditions precedent were the need for the proper execution, stamping and registration of all facility and security documentation, a release of the existing security by Scottish Pacific, and importantly, "A working capital finance field audit is to be conducted at the premises of [SAS] by Moneytech-appointed personnel, with the findings satisfactory to Moneytech". [10] This audit was explained as follows: "As part of the Plaintiff's due diligence procedure, an audit and credit checks are undertaken against the customer's business. Generally, an audit is undertaken at a customer's business address. If an onsite audit is not possible at the customer's business address, a desktop audit is undertaken, where the customer provides all requested financial documents to the Plaintiff via post or email. The audit is then undertaken at the Plaintiff's office by an internal or external auditor, which will include the same questionnaire and procedure as an onsite audit." [11] 1. On Friday, 16 November 2018 Mr Wheeler, in a telephone call, indicated acceptance of the letter of offer. [12] He was then emailed instructions about the bank account into which the second half of the establishment fee was to be paid and the need for signing the letter of offer prior to the preparation of the formal documentation. [13] On the same day, Mr Wheeler signed the letter of offer and paid the balance of the establishment fee. [14] 2. Thereafter, the security and finance documentation was prepared and provided to SAS and Mr Wheeler by email dated 21 November 2018. [15] The debtor finance agreement dated 16 November 2018 [16] was signed by Mr Wheeler for SAS. [17] Mr Wheeler also signed on 21 November 2018 a direct debit request in favour of Moneytech, [18] a trade finance fee schedule (though with the fee for lodgement of caveats struck through), [19] a trade finance account acceptance form, [20] an undated General Security Agreement, [21] and an undated Guarantee and Indemnity. [22] The unamended executed Trade Finance Fee Schedule was subsequently provided on 5 February 2019. [23] 3. SAS and Mr and Mrs Wheeler also executed a Deed of Subordination, [24] subsequently executed by Moneytech on 21 January 2019. [25] 4. On 26 November 2018 Todd Erichsen of Moneytech emailed Mr Wheeler, copied to Jason Gibson, apparently the finance broker, [26] and Bonnie Chapman, a Moneytech colleague, in the following terms: "Hi Peter, … Usually with our Debtor Finance Facilities there is an on-boarding audit. However, we are trying to save you some time & money and avoid outsourcing the audit. In lieu of the audit, we will need to complete verifications on some of your debtors and a mini 'desktop audit'. Below is a list of information required. Could you please send through the below to our Senior Money Manager, Bonnie Chapman (cc'd) & we will then also request some of the paper trails for your top debtors. - Detailed open items listing (Accounts Receivable ledger) as of today (in both Excel and pdf) - Accounts Receivable summary as at 31st October (pdf) - Accounts Payable summary as at 31st October (pdf) - Balance Sheet as at 31st October (pdf) - Profit & Loss as at 31st October (pdf) - ATO portal from 1/01/2018 to today (any plan information if relevant) - Bank statements from 01/08 to today (pdf) Please give me a call if you have any questions at all. Kind regards, Todd". [27] 1. Mr Wheeler returned the signed security and financial documentation to Moneytech together with the further requested financial documents [28] later that day. [29] The evidence does not disclose events thereafter until late January 2019. 2. In response to a query on 31 January 2019 about whether the matter was "settling today", Mr Erichsen of Moneytech emailed Mr Wheeler indicating Moneytech was trying to settle, but asserted that the SAS ledger of invoices, less the 10% Moneytech retention, Moneytech legal fees and Moneytech monthly fee, was almost $3,000 below the Scottish Pacific payout figure. He stated that Moneytech was considering whether Scottish Pacific be paid out from the trade finance facility (rather the debtor finance). [30] 3. On Friday, 1 February 2019 at 2.17pm Bonnie Chapman, Senior Money Manager at Moneytech, emailed Mr Wheeler saying, "Our team" were "preparing for settlement Monday" by "conducting some phone confirmations with the customers" and stated, "We have had some feedback from your main customers saying they have not received the December and January invoices," [31] and asked Mr Wheeler for information and for copies of certain invoices. The explanation of the audit procedure referred to earlier did not indicate a procedure whereby Moneytech would telephone customers of SAS. Further, the person who was to or did telephone customers, and what the customers were asked, is not identified. Neither the person who conducted these enquiries, nor Mr Erichsen or Ms Chapman, gave evidence. 4. The Operations Manager of Moneytech, Richard Dyer, [32] asserted that one Pablo Barroreo of Moneytech (who also gave no evidence) conducted a "debt verification process". Mr Dyer's affidavit is silent on whether Mr Barroreo made any calls himself, and the means by which Mr Dyer came to know of these matters. I am not persuaded that Mr Dyer's evidence about Mr Barroreo's activities is admissible. 5. A screenshot of a summary of some phone calls, [33] which I infer is a business record and admissible, did not assert "your main customers saying they have not received the December and January invoices" as Mr Wheeler was informed. Rather, two customers asked for copies of invoices, and a third indicated, "he has not received any invoices yet" but then "confirmed the reception of the 4 relevant invoices". SAS had provided Moneytech with a schedule of 81 invoices, apparently with copies, [34] although a "sample" of only five customer's invoices were in evidence, three of which were referred to on the one-page screenshot. 6. Mr Wheeler responded 42 minutes after Ms Chapman's email, confirming that the invoices had been issued, explaining some misunderstanding providing details and stated that a customer "was concerned as to your status & rang me for confirmation". Mr Wheeler also stated, "I would have preferred to be advised you were going to do this as obviously we haven't settled yet & are not Moneytech funded at this point". [35] Mr Wheeler subsequently described these events thus: "2) Their difficulty came when ringing SAS Customers for verification of Invoice receipts and balances, without SAS knowledge, customers were phoned & questioned about balances & invoices. 3) Some customers use manual systems, & were unable to confirm on the spot, [our] best customer, Screw Machine was asked about a balance they had paid clearly the week before." [36] 1. On Monday, 4 February 2019, in one of several important emails not tendered by Moneytech as part of its evidence, but tendered by SAS, [37] Ms Chapman emailed Mr Wheeler saying: "Hi Peter, Based on results of our confirmation attempts, our credit team has agreed to approve settlement today based on the below conditions: • All missing invoices for top 6 customers are emailed to them today (CC'ing me for reference) – if you can please email them with invoices on updated template with Moneytech payment details that would be ideal • Invoices are to be sent to customers each week, not at month end – we want to ensure customers are receiving invoices with enough time to make payments within terms Are you able to please send these emails with invoices at earliest convenience so I can hit the button and arrange payment to Scotpac for you? Kindest Regards, Bonnie Chapman". [38] 1. Accordingly, as Mr Wheeler asserted, [39] Moneytech had, after the telephone enquiries of debtors, agreed to approve settlement. Moneytech did not assert that the email requests or conditions of Ms Chapman were not accepted and performed. 2. The next day, 5 February 2019, Mr Erichsen emailed Mr Wheeler saying: "We are about to settle the debtor & trade finance facilities. Could you please sign the attached Trade Finance Fee Schedule & scan & email back to me. We have one that you've crossed out the Lodgement of Caveat Fee. We do not intend on lodging a caveat, but still need it to be listed in the fees." [40] As earlier indicated, Mr Wheeler signed and emailed the unamended form. 1. On 6 February 2019 Mr Wheeler enquired of Moneytech about progress. [41] Mr Erichsen's responsive email indicated that further "verification calls" were to be made that afternoon. [42] The evidence does not disclose acceptance or acquiescence of SAS and Mr Wheeler to this approach. No details of these calls to SAS customers are in evidence. In response to another enquiry on 7 February 2019 by Mr Wheeler, [43] Mr Erichsen of Moneytech said in an email: "Hi Peter, We finished our debtor verifications early this morning & unfortunately at this stage, our Credit Team are not comfortable to proceed with a Debtor Finance Facility. This is mainly due to your customers not being able to confirm that the invoices they have on file reflect what they believe is actually payable. I understand this process has been a long one, but I would like you to consider our standalone Trade Finance Facility. We can approve $150,000 as a Trade Finance Facility & it will be setup as a true 100% Advance with a flexible repayment structure over 120 days. Working just like a line of credit, the minimum repayments are required on the 28th of each month once the transaction is older than 30 days, and comprise of monthly instalments of 15%, 45% and 40% of the value of the transaction. Therefore, if we pay out Scottish Pacific today & you make some additional supplier payments, there will be a 15% repayment on 28th March, a 45% repayment on 28th April, & a 40% repayment on 28th May. The product is far less restrictive than other competitors trade finance products & shouldn't affect your banking facilities. There's a very simple Trade Finance Platform with access to competitive FX rates and there is no longer any requirement to upload weekly open invoices – the only documentation requirement each time is the supplier invoice. I am frustrated with the Credit Team's decision, but do think that the Trade Finance Facility would be a great fit for your business – this will allow you to be able to collect your debtor invoices each week, but delay paying supplier payments upfront & give you nearly 120 days to completely pay them back each time. Please take the time to consider this approach as you will also not have Scottish Pacific chasing any of your customers for payment & as they pay you back, you can pay off the Trade Finance Facility if you like. Kind Regards, Todd". [44] 1. It can be seen that this proposal is not reflected in the earlier letter of offer or in any security documentation. It may be that Moneytech arrived at the $150,000 "line of credit" by combining one item of the debtor finance facility, the payout of Scottish Pacific (for approximately $50,000), with the approved amount of $100,000 for the trade finance facility, although that is not disclosed in the email. 2. Mr Wheeler indicated that he would accept this new arrangement. [45] Mr Erichsen said: "I'm frustrated that it has come to this because I know originally you wanted the Debtor Finance side to continue as it has been going, but I do think the Trade Finance will be easier to manage on a day to day basis." [46] 1. SAS accepted "the trade offer" later on 7 February 2019. [47] 2. Once Scottish Pacific confirmed a payout figure of $48,466.35, and Mr Wheeler agreed, the matter proceeded to settlement. [48] Although a facility of $150,000 was agreed, only about $95,367.51 was provided by Moneytech by 7 March 2019, and $99,634.41 by 28 March 2019. That is, only about $51,188.06 was provided in addition to the Scottish Pacific payout. [49] 3. Mr Wheeler wrote on 7 March 2019 to Mr Erichsen: "Hi Todd…Can I make the following points about our change to Moneytech in February. The original negotiations were for an import Export Facility of $100,000 & a Factoring facility of $150,000. Following settlement with ScotPak, & an approval for the Import Export facility, which has been reduced to about $58,000. So from the original $250,000 proposal & approval, effectively we have had the facility reduced to $48,000 (SP) & $52,000 left on the Import Export side, an actual reduction in facility of $150,000. Clearly this was not what we envisaged, and I am asking if the original approval can be reinstated including the factoring side, starting with invoices after settlement with ScotPak. Can you please have a look at our situation please Regards Peter Wheeler". [50] 1. Mr Erichsen responded: "Hi Peter, … Credit are looking at a Trade Finance Facility limit increase first & we should have something back from Credit on Tuesday. I've also raised the Debtor Finance with them again & will come back early next week with an update." [51] 1. Despite subsequent discussion, the "increase" did not eventuate. Moneytech recommended SAS apply for some debtor finance with another company, Invoice Money. [52] Mr Wheeler requested a further $5,000 and Moneytech responded as follows: "Hi Peter, Thanks for your email. Based on your request, we are happy to approve a Temporary Credit Limit increase which is subject to following conditions – 1. Credit Limit to be increased to $105,000 to pay attached Vulcan Stainless invoice (current limit is $100k) 2. A fee of $250 will be applied to the facility for the temporary increase 3. Once the Debtor Facility with difference [sic] financier (Invoice Money) is settled, this month's repayment of $13,711.21 (due on 28th March) must be paid-off and Trade Facility Credit Limit will be reduced to current limit of $100,000 4. The amount must be repaid by 10/04/2019 and facility to be reviewed 5. The facility will remain on Credit Hold until the overdue amount is paid-off If you agree to above, please provide us your approval by responding to this email. Once we receive your approval, we will stop tomorrow's direct debit and increase the credit limit to pay the supplier invoice. Kind regards, Lorna Gomes". [53] 1. The evidence gives little detail for the following month. Mr Wheeler made a payment to Moneytech of $13,771.21 on 2 May 2019. [54] 2. On 7 May 2019 Moneytech emailed Mr Wheeler: "Hi Peter, Thanks for sending us invoice funding requests. Currently your facility is delinquent. Credit Limit = $100,000 A/C Balance = $94,898.53 Overdue = $43,076.42 Can you please make urgent payment to clear-off the overdue balance? We are unable to fund any supplier invoices until the due amount is paid off and the facility is brought back within the terms. … Kind Regards Lorna Gomes Senior Money Manager – Moneytech". [55] 1. Mr Wheeler responded: "Hi Lorna, Limit $100,000? This was supposed to be increased to $150,000 upon paying the $13,700 off, that was your advice to me some weeks ago. Another reduction in facility from Moneytech, we were accepted & signed for a facility of $250,000 last September, which became $100,000 without our knowledge when the Factoring facility was denied, which then became a $50,000 when the factored amount was deducted from the purchasing side of the agreement, So now we have, at the full application price of $3000, from a $250,000 prior facility at ScotPak a total facility of $84,000 full drawn, at Moneytech, what a great deal that was. As you may be aware we, after an approach from Moneytech to negotiate a new Factoring deal at Invoice Money, which we did, however it took 2 weeks to get a release of Deed over the Debtors from Moneytech sent to Invoice Money. Moneytech reneged on the Factoring Deal totally, offered a Trade deal, without advising that the Factoring buyout would reduce the Trade facility by half, then included the buyout amount $48k into the Trade Agreement, subject to the same payment terms, apparently now reneging on your advice to increase the Trade facility. Upon payment of those & other credit invoices, we have about $15k to process in the next few says, with about the same next week, this mainly will go to Moneytech reducing the account I await your response with interest Regards Peter". [56] 1. Moneytech continued to assert that there was an "actual approved limit of $100k". [57] 2. On about 18 June 2019, Moneytech lodged a caveat on Mr Wheeler's home at Wamberal in respect of the debt. 3. Mr Wheeler on about 4 July wrote to the Australian Financial Complaints Authority. The "Complaint summary" was as follows: "In about August 2018 my company through a broker approached Moneytech for 2 facilities, a Factoring Facility based on my company's debtor invoices, and secondly a Trade Purchase facility, to purchase stock on extended terms. The Debtor facility was originally for $150k, the Trade for $100k., we were approved for both facilities, however, Moneytech had difficulties both confirming balances with some customers & settling with our prior credit provider Scottish Pacific, where we had a Factoring Facility of $250k. We were than advised that Moneytech were withdrawing the Trade Debtor facility, but would proceed with the Trade Purchasing Side to $150k. After the delays in settlement, when we were really unable to sell, the pressure on the business was enormous, so I accepted the Trade Facility only, Moneytech paid a range of creditors, however combined the $48k payout figure to Scotpak into the Trade Facility, then reduced the Trade Facility to $100k, this mean our overall trading facilities were reduced from $250k as agreed to $100k, now fully drawn. Without credit the Company has had tremendous difficulty trading, we lost virtually a month of Sales over settlement, then had the Trade Purchase Facility virtually halved without any negotiation. We managed to pay the first payment of $13k, expecting to be able to purchase a further $50k to convert to approx. $70k to repay part 2 of $37k, without the facility we have been trading on a COD basis. This has practically destroyed the Company." [58] 1. In late July 2019, a document was executed by Moneytech, Mr Wheeler and SAS in the following terms: "To: S.A.S (Sales) Pty Limited (ACN …) Unit 4, 15 pacific Street, Wamberal, NSW 2260 (the 'Borrower') and Mr. Peter Wheeler Unit 4, 15 Pacific Street, Wamberal, NSW 2260 (the 'Guarantor') Date: 25 July 2019 Re: Trade Facility Agreement dated 9 February 2019 (as amended from time to time) (the 'Trade Facility') and the Guarantee & Indemnity dated 29 January 2019 (as amended from time to time) (the 'Guarantee & Indemnity') entered into by the Borrower, Guarantor and Moneytech Finance Pty. Limited (ABN 112 110 906) ('Moneytech') (as well as other related security documents) - Without Prejudice A. Whereas the Borrower agrees that as of the date of this letter agreement: i. it is in continuing default of the terms and conditions of the Trade Facility; and ii. an amount of AUD$100,183.07 remains outstanding and is due and payable to Moneytech (the 'Outstanding Debt'). B. The Borrower undertakes to pay to Moneytech all the required repayments (each a 'Scheduled Payment') in reduction of the Outstanding Debt on each scheduled payment date (each a 'Scheduled Date') as required by the attached Scheduled Repayment Plan. C. Provided always that the Borrower makes all Scheduled Payments on every Scheduled Dates to Moneytech, Moneytech agrees to the following: 1. upon receiving this letter agreement from the Borrower and the Guarantor duly executed, the Borrower may draw from the Trade Facility an amount equal to AUD$10,0000 (Australian Ten Thousand Dollars) specifically for the purpose of purchasing business goods; 2. on 28 August 2019, the Borrower may re-draw from the Trade Facility an amount equal to AUD$5,000 (Australian Five Thousand Dollars) provided that Moneytech on such date properly receives from the Borrower AUD$15,000 (Australian Dollars Fifteen Thousand Dollars); 3. on 28 September 2019, the Borrower may re-draw from the Trade Facility an amount equal to AUD$5,000 (Australian Five Thousand Dollars) provided that Moneytech on such date properly receives from the Borrower AUD$12,000 (Australian Dollars Twelve Thousand Dollars); 4. thereafter, the Borrower makes to Moneytech each subsequent Scheduled Payments on every Scheduled Dates; 5. if Moneytech is satisfied in its sole opinion that the overall balance of the Outstanding Debt is reduced to an amount equal to AUD$70,000 (Australian Seventy Thousand Dollars) (the 'Partial Pay-Down'), the Borrower may make further re-draws not exceeding the available credit limit of the Trade Facility on and from the date of the Partial Pay-Down (the 'Partial Pay-Down Date'); 6. on the strict condition that, in the sole opinion of Moneytech: • the Borrower is not in default of any of its required minimum monthly payments due on the Trade Facility for a period of three (3) consecutive months after the Partial Pay-Down Date, Moneytech agrees to remove the following caveat: • Caveat No.: #AP323884 in relation to the residential property located in [Wamberal] D. The Borrower acknowledges and agrees that the items listed in paragraph C above are subject to the strict conditions set out in this letter agreement including that: i. the Borrower does not fail to pay any Scheduled Payments due on each Scheduled Dates; and ii. the Borrower does not fail to pay the required minimum monthly payments due on the Trade Facility on and from the Partial Pay-Down Date. E. Further, the Borrower acknowledges and agrees that if: 1. the Borrower fails to pay a Scheduled Payment due on a Scheduled Date; or 2. the Borrower fails to pay the required minimum monthly payments due on the Trade Facility on and from the Partial Pay-Down Date; or 3. Moneytech in its sole and absolute discretion determines that the Borrower is unable, or is likely to become unable, to comply with the Scheduled Repayment Plan or the terms of this letter agreement, then the following will occur: a) the Outstanding Amount then remaining shall immediately become due and payable in full together with any applicable interest (including default interest); b) Moneytech shall without further notice to the Borrower employ whatever action it deems necessary to recover the Outstanding Amount then remaining, including any legal cost in recovering; c) the Borrower will be liable for any and all related fees and charges incurred by Moneytech in recovering the Outstanding Amount then remaining including legal costs on a full indemnity basis; and d) Moneytech will exercise its rights against the Guarantor(s) pursuant to the terms of the Guarantee and Indemnity. F. Additionally, the Borrower: i. acknowledges and agrees that this letter agreement together with the Scheduled Repayment Plan are fair and acceptable in accordance with their terms; ii. warrants that it has sought independent professional and legal advice prior to entering into this letter agreement and the Scheduled Repayment Plan; and iii. agrees that neither this letter agreement nor the Scheduled Repayment Plan affect or amend the terms and conditions of the Trade Facility or the Guarantee and Indemnity which both remain applicable and in full force and effect. This letter is governed by the laws applicable in the State of New South Wales and the parties submit to the non-exclusive of the courts of the State of New South Wales and the courts of appeal therefrom. Executed as an agreement with effect from the date specified on the first page of this agreement. By: S.A.S. (Sales) Pty. Limited (ACN …) [signature] [signature] Signature of Sole Director Signature of Witness Name: Peter Allen Wheeler Name of Witness: Brian Fullarton Dated: Dated: 26-7-2019 PETER ALLEN WHEELER By: Mr. Peter Allen Wheeler [signature] [signature] Signature of Mr. Peter Allen Signature of Witness Wheeler Name of Witness: Brian Fullarton Name: Peter Allen Wheeler Dated: 26-7-2019 Dated: 26th July 2019 By Moneytech Finance Pty. Limited (ACN …) in accordance with s.127(1) of the Corporations Act 2001 (cth.) [signature] [signature] Signature of Director/ Signature of Director/Company Secretary Name: MARK CAMERON Name: Peta de Michele Dated: 29-7-19 Dated: 29.7.2019". [59] 1. There was no evidence of the circumstances surrounding this document or its execution. However, Mr Wheeler at 3.17pm on 29 July 2019 sent an email to Peta de Michele, [60] the Moneytech General Counsel and Company Secretary, [61] and signatory of the document, that appears to be incomplete and is related to an illegible email trail. [62] In that email, Mr Wheeler writes: "Hi, Thank you for your email regarding the above Complaint Number & would advise the following - 1) Yes I have signed an agreement that enables us to move forward. 2) I have concerns that the new arrangement may not be workable, due the time it has taken to establish, & the fact that it only gives us an extra $10k plus $5k on the 1st of August. Still a long way short of the original $250k. 3) Delays in settling with Scottish Pacific, change of limits etc have cost us many customers & Sales. We may not be able to get them back. I would seek you confirmation that this case can be re opened should the agreement not work out". [63] 1. The email from Ms De Michele to which Mr Wheeler is responding was not in evidence. Nor was any response by Ms De Michele to the above email. It may be noted that if Mr Wheeler is speaking of the letter agreement, as the dates indicate, it makes no provision for "$5k on the 1st of August". Rather, it provided for $5,000 on 28 August so long as $15,000 was paid by SAS on that same day. [64] 2. On an unspecified date Ms De Michele wrote, presumably to AFCA, stating: "To whom it may concern We are yet to be allocated a case officer in this matter. However, in consultation with the Mr Wheeler (the complainant) a Repayment Deed has been agreed between the parties and the dispute resolved. Attached please find a copy of the Repayment Deed executed by the parties. It is our understanding the complaint will now be closed? Please confirm by way of receipt. Kind regards moneytech". [65] 1. A copy of the "Repayment Deed" is not in evidence, nor is any subsequent confirmation to this email, nor is there any direct evidence that the "letter agreement", not executed as a deed, is the Repayment Deed. 2. With some further advances in July and August 2019, it appears that Moneytech paid $48,446.35 in respect of the Scottish Pacific debt, [66] further amounts totalling $60,086.09, [67] and a further payment of $935 in respect of an invoice paid by Mr Wheeler. [68] These amounts total $109,467.44, not including any legal or account fees, or interest charged to Mr Wheeler. Mr Wheeler paid $13,771.21, [69] and an amount of $3,000 for establishment fees. [70] D. Issues 1. Accordingly, the issues between the parties appear to be: 1. Is it appropriate to draw Jones v Dunkel inferences from the absence of the various Moneytech personnel involved in the arrangement? 2. Did the audit procedure, agreed by the parties, include authorising Moneytech to engage in the telephone interrogation of SAS customers? 3. Was the condition precedent of audit findings satisfactory to Moneytech satisfied on 4 or 5 February 2019, or not? 4. What, if any, consequence arose from the further "verification" enquiries of customers after the notified satisfaction of Moneytech? 5. What was the consequence of the alternative arrangement between SAS and Moneytech, proposed by Moneytech and agreed to by SAS on 7 February 2019. 6. What, if any, consequence attached to Moneytech confirming no intention to caveat? 7. What amount was owed by SAS on the new trade facility? 8. What, if any, loss was suffered by SAS as a result of any breach by Moneytech? 9. What was the consequence, if any, of the document executed in late July 2019? (a) Jones v Dunkel 1. As indicated, none of Mr Erichsen, Ms Chapman, Mr Barroreo, Ms Lorna Gomes, the director, Mr Mark Cameron, and the General Counsel and Company Secretary, Ms Peta De Michele, gave evidence. These are all the relevant Moneytech persons involved in the dealing with Mr Wheeler so far as the records reveal. Nor was there any evidence tendered by Moneytech of the emails surrounding or connected with the signed letter of 29 July 2019. No explanation was given as to the absence of witnesses or emails which must have existed. [71] 2. SAS and Mr Wheeler did not ask for a Jones v Dunkel inference. This is unsurprising since Mr Wheeler had no legal training and would, I infer, be ignorant of the principles attaching to a Jones v Dunkel inference. I do not see this as precluding an inference. I think it is open to the Court to draw a Jones v Dunkel inference where these persons could have explained some uncertainty in the evidence, and no explanation was given as to why they were not called. I would draw that inference. One consequence is that I would infer that their evidence would not have assisted Moneytech. 3. Further, where the evidence is ambiguous or unclear, I would not be inclined to draw an inference in favour of Moneytech, and would more easily be persuaded by SAS and Mr Wheeler. That is not to say that the absence of these witnesses cures an absence of evidence or provides evidence in favour of SAS and Mr Wheeler. (b) The audit and customer interrogation 1. Moneytech undertook a "preliminary assessment to determine credit worthiness" prior to making the offer contained in the letter of offer. [72] That procedure involved a review of the SAS financial documentation. Presumably the results of that assessment were satisfactory, as Moneytech issued the letter of offer. 2. Moneytech retained the right to conduct a further "working capital finance field audit … at the premises of [SAS]". [73] However, Moneytech decided on 26 November 2018 to forgo that entitlement, both to save SAS "time & money" and to "avoid outsourcing the audit". In "lieu" of the audit, Moneytech proposed that it would "need to complete verifications on some of your debtors and a mini 'desktop audit'". [74] 3. This new proposed procedure required further information from SAS, both financial documentation and "some of the paper trails for your top debtors". [75] 4. Mr Wheeler provided the requested information, but otherwise is not shown to have agreed to this change to the audit that was a condition precedent to the finance facilities. In any event, the description of the change as a need to finish "verifications on some of your debtors" together with a request for Mr Wheeler to provide "paper trails for your top debtors" does not fairly describe the procedure ultimately adopted, which involved Moneytech telephoning SAS customers of its choosing, without approval or notification, and interrogating them about invoices. I do not accept that a "working capital finance field audit … at the premises of [SAS]", properly construed, authorised Moneytech to conduct telephone interrogations of SAS customers without notice to SAS. 5. And neither does the proposed alternative procedure "[i]n lieu of the audit" of having "verifications on some of your debtors and a mini 'desktop audit'" authorise these interrogations in the context of a saving of time and money and an avoidance of outsourcing. 6. In these circumstances, Mr Wheeler has not agreed to this telephone interrogation procedure, and additionally, has not agreed to it as a condition precedent to the facilities. Moneytech was not authorised by SAS to contact SAS customers in the manner it did, nor to treat its interpretation of the results of that unauthorised procedure as a condition precedent to settlement of the agreed facilities. 7. However, Mr Wheeler had not, at that stage, properly executed the security and documentation requirements in the letter of offer. Rather, he had ruled through a provision for a caveat fee in the "trade finance fee schedule". So there was no proper execution of the facility documentation, as required in the conditions precedent, so as to constitute acceptance and formalise the agreement. [76] Although Mr Wheeler subsequently signed the unamended fee schedule, that did not occur until 5 February 2019. As there was no agreement, not subject to conditions precedent, in place at the time of the customer telephone interrogation process in late January or early February 2019, it could not be a breach of the agreement. Whether it was authorised may be another matter. 8. It appears that initially Moneytech was satisfied with its enquiries. On 4 February 2019 "[b]ased on results of [its] confirmation attempts" Moneytech "agreed to approve settlement today" on certain conditions, which were not asserted to be unsatisfied. This was confirmed the following day, on 5 February 2019, the same day the executed documents were properly completed by Mr Wheeler signing and sending an unredacted copy of the Trade Finance Fee Schedule. (c) The caveat correspondence 1. There was no evidence of any conversations about a caveat fee either before or after Mr Wheeler struck out the reference in the Trade Finance Fee Schedule to a fee for the lodgement of a caveat, and returned the signed document on 21 November 2018. [77] Whether it was intended to avoid another fee, or perhaps more likely an ineffective attempt by Mr Wheeler to manifest disagreement with Moneytech having the power to lodge a caveat on his property, was not explained. Moneytech seemed to understand it to be the latter, and on 5 February 2019, sometime after the amendment was discovered and noted, it wrote: "We do not intend on lodging a caveat, but still need it to be listed in the fees." [78] Mr Wheeler asserted that this constituted an agreement not to lodge a caveat. Moneytech submitted that it was no more than a statement of intention. It also asserted that this intention was subject to there being no default by SAS. 2. For reasons to which I will come, I do not think the resolution of this issue makes a difference. However, lest I am mistaken, in the circumstances, it seems to me that the statement by Moneytech was tantamount to a statement that Moneytech would not lodge a caveat. The acknowledgement by Moneytech that it intended only to lodge a caveat in circumstances of default came close to admitting an assurance about not lodging a caveat, conditionally. But the email did not make any reference to default, and I would not infer it. This submission by Moneytech may have its genesis in a later executed document on 25 July 2019, which refers to a removal of the caveat in the event of no default. [79] That may become important, but the later conduct cannot convert, as at 5 February 2019, the unconditional statement to a conditional one. The reasonable third party, viewing the correspondence, would not read the concession by Moneytech in the way suggested. In my view, Moneytech waived any entitlement to lodge a caveat on the property by confirming in writing, unconditionally, that it had no intention to do so in circumstances where Moneytech understood Mr Wheeler to have manifested disagreement with such an entitlement. Neither party submitted that the reference to a fee was relevant to this conclusion. 3. Almost immediately after the 5 February email giving the assurance about the caveat, Mr Wheeler returned the correct, unamended, signed fee schedule on 5 February 2019 at Moneytech's request. At that stage, SAS and Mr Wheeler had satisfied the conditions precedent insofar as they could. The repeated assurances of Moneytech [80] are evidence that the audit findings were satisfactory to Moneytech, thereby satisfying the audit precondition. But the Scottish Pacific security had not been released, or that debt paid. That awaited Moneytech settlement to occur. (d) Further verification calls 1. Later on the afternoon of 5 February 2019, Moneytech requested information to do further "telephone verifications" [81] in response to Mr Wheeler's earlier expression of concern about this practice. [82] The evidence did not contain a response to this email, let alone agreement to its proposal, so again I am not satisfied that these calls were authorised or formed any part of the agreement. And yet the evidence suggests that they were the reason why the debtor finance facility did not proceed. 2. Moneytech was not entitled to reject the agreement on the basis of the "verification calls". Until payout of the Scottish Pacific loan on settlement, there remained an unfulfilled condition precedent. And yet the evidence does not disclose any reason for the non-fulfilment of that condition other than the failure of Moneytech to settle. Moneytech had an obligation to act in good faith and reasonably to ensure each party received the benefit of its bargain. [83] That indicates that Moneytech was bound at this stage, and its subsequent failure to settle and pay out Scottish Pacific, a refusal because "our Credit Team are not comfortable", [84] appears to be a breach and repudiation. 3. However, whether Moneytech was in breach of the agreement in acting on the later telephone interrogations and regarding them as part of the contractually mandated audit procedure may ultimately be of little significance. The agreed facility did not proceed, an alternative agreement was reached, and Moneytech never executed all of the agreed and earlier identified documentation. [85] Questions of damages are dealt with below. (e) The alternative arrangement between SAS and Moneytech 1. On 7 February 2019 Moneytech offered an alternative arrangement: a $150,000 trade finance facility that operated as a line of credit. [86] This proposal was not reflected in the documentation, conflicted with specific provisions of the letter of offer of the trade finance facility of $100,000, and ignored the other signed documentary material. 2. But Mr Wheeler, on behalf of SAS, accepted it, [87] and Moneytech acted in accordance with the acceptance. 3. What were the terms of that agreement? I do not think it is correct to identify any of the earlier executed documents as part of the agreement. Those documents were executed as part of an earlier arrangement that seems to have been repudiated and, in any event, did not proceed. Even the agreed trade finance facility was altered. Neither the email correspondence containing the offer, nor the acceptance, refers to, picks up or adopts those earlier executed documents. The reasonable third party would understand from the email that a $150,000 line of credit trade facility was to be provided, but no document regulating the terms of that facility had been signed, and no signed document had been referred to and incorporated. Accordingly, the only terms are those which are reflected in Moneytech's email of 7 May 2019. [88] This email can be compared and contrasted with the letter of 12 November 2018, which expressly identifies the terms and documents to which the original facilities were to be subject. 4. In particular, there was no reference to this line of credit being subject to a guarantee: the guarantee was not specified to be part of the new arrangement, and the proposed substantial change to the SAS borrowings would require an acknowledgement from Mr Wheeler that the existing guarantee would apply to the new facility. Mr Wheeler's acceptance on behalf of SAS says nothing about the applicability of the guarantee, or any other security documentation. Moneytech did not dispute that the 7 February email and its acceptance [89] created an agreement between the parties that did not depend upon the execution of further documentation. 5. Further, the Trade Facility Agreement is dated 9 February 2019. Yet the Trade Finance Account Acceptance Form is dated 21 November 2018 and is unsigned by Moneytech. [90] The Trade Finance Fee Schedule is dated 21 November 2018, and the unamended one is dated 25 February 2019. Both are unsigned by Moneytech. No other document is labelled a Trade Facility Agreement, nor is one referred to in Mr Dyer's affidavit, nor is any document signed 9 February 2019. On 8 February the trade finance facility was "set up" [91] in accordance with the email agreement on 7 February 2019 for a trade finance line of credit of $150,000. 6. Notwithstanding this new agreement, Moneytech did not provide a facility of $150,000. The facility it provided was subsequently asserted to be for $100,000, and approximately that amount was provided. By not providing the $150,000 trade finance, Moneytech was in breach of this new agreement. Nevertheless, Moneytech provided moneys by way of loan and was entitled to be repaid its loan monies, subject to a set-off for any damages suffered by Mr Wheeler resulting from Moneytech's breach. (f) Loss suffered by SAS 1. SAS argued that the failure to provide the agreed funds of $150,000, and the subsequent lodgement of a caveat (and perhaps also the failure to provide the original $250,000) caused it substantial loss. 2. SAS did not prove any substantial loss as a result of the failure by Moneytech to honour the original agreement or the alternative $150,000 trade finance facility. The tax returns of SAS in evidence establish that SAS suffered a loss in all but one of the preceding seven years, [92] and a total loss of $187,000 over that period. [93] The tax returns also show that Mr Wheeler did not draw a salary from SAS. [94] Thus, it could not be inferred that the continuation of the SAS business would produce profits. That SAS had traded for many years, and sometimes it had substantial revenue, [95] is insufficient to prove a profitable operation where the tax returns show otherwise. The evidence rather suggests that the conclusion of trading by SAS was the end of an unprofitable company. 3. I accept the inference, arising from the contemporaneous failure of SAS with the delay and non-provision of the agreed settlement monies, that the failure of SAS resulted from the absence of the agreed funding and the lodgement of the caveat preventing Mr Wheeler from obtaining alternative funding. But the consequence was the cessation of a loss-making business. In the result, whilst these tax returns were not conclusive, in the absence of other persuasive evidence, I was not satisfied that SAS suffered a substantial loss as a result of any conduct by Moneytech. 4. However, although SAS has failed to prove any substantial loss or lost profit, it is entitled to the wasted costs of the facility. Not unlike in McRae v Commonwealth Disposals Commission, [96] the promise of a facility on the fulfilment of the conditions, which facility was not provided in breach of the agreement, entitled SAS "to recover the expense which [it] has incurred" [97] in attempting to secure the facility. 5. SAS paid the establishment fee of $3,000. It has made a payment of $13,771.21 on 2 May 2019 against the asserted amount due. SAS is entitled to recover those sums as the cost of a facility not provided, either the $250,000 facility initially agreed, or the $150,000 facility subsequently agreed. (g) The executed letter agreement of 25 July 2019 1. An untitled document dated 25 July 2019 was signed by the parties and is quoted earlier. [98] The document was referred as a "this letter agreement" in Item A of its terms and elsewhere. [99] It is "[e]xecuted as an agreement with effect from the date specified on the first page of this agreement". [100] It speaks of undertakings by the Borrower, [101] and refers to Moneytech [102] and the Borrower [103] agreeing to certain matters. 2. Yet there are a number of other matters which militate against this document constituting a binding agreement between the parties. It is not headed as an agreement. [104] It is referred to as a "letter", [105] and bears some indicia of mere correspondence, such as its reference at the outset that it is "To" SAS and Mr Wheeler and a specified subject matter following the abbreviation "Re". It has a "Scheduled Repayment Plan"; and terms like "scheduled" and "plan" in this context might not themselves be words of obligation. And it is marked "Without Prejudice" at the outset. [106] It is also relatively brief as a representation of a formal agreement. [107] 3. In Iacullo v Remly Pty Limited; Iacullo v Iacullo, [108] the formal signing and witnessing of a document was not enough to constitute an enforceable agreement, [109] and a "without prejudice" reference being added after much of the writing militated against the finding of an enforceable agreement. [110] 4. There was no evidence of discussions or correspondence showing the extent to which areas had been the subject of agreement, which has been held to be a matter of some relevance. [111] There is no reference to the dispute before AFCA or evidence that the letter agreement involved a settlement of that dispute, despite the Further Amended Statement of Claim calling it a Settlement Agreement [112] and despite the assertions of Ms De Michele quoted earlier. [113] 5. But there is evidence that Moneytech fulfilled the promise in cl C.1 by making further funds available, though only about $10,000, an amount well short of the additional $50,000 agreed on 7 February 2019. 6. The letter agreement proposed that Moneytech could immediately seek to recover the whole of the amount outstanding "in its sole and absolute discretion" [114] if it determined SAS was "unable, or is likely to become unable, to comply", [115] a matter readily able to be inferred by Moneytech in view of the acknowledgement of "continuing default" in cl A.1 of the letter. This clause E.3 conferring the discretion, and the reference to continued funding in an amount of approximately only 20% (that is, $10,000 of $50,000) of the amount agreed, raises a real question as to whether any consideration for the letter agreement was real or illusory. In substance, the obligations on Moneytech appear to attach at its option or discretion, and these obligations are a reduction on obligations already agreed. As it is less than that previously agreed, the asserted further provision of funding in the letter does not establish consideration. 7. After July 2019, Moneytech agreed to provide finance of a sum to SAS so long as SAS paid a greater sum to Moneytech: $15,000 was required to be paid by SAS on 28 August in return for the ability to redraw $5,000; [116] $12,000 to be paid by SAS on 28 September in return for the ability to redraw $5,000; [117] and there were to be subsequent payments with no additional drawings permitted, [118] with the result that there was to be a 30% reduction in the drawn down amount by SAS, to a total debt of $70,000, before any further redraws were permitted, subject to the "sole opinion" of Moneytech. And, as indicated, all monies to be provided by Moneytech were subject to Moneytech in its sole and absolute discretion not determining that SAS "is unable, or is likely to become unable, to comply with the Scheduled Repayment Plan". [119] 8. As there is no evidence or reference to the agreement being in consideration for Moneytech refraining from suing, or to settle the AFCA complaint, those matters cannot inform a decision on consideration. 9. I have earlier found that none of the executed documentation was applicable to the $150,000 facility agreed between the parties. Moneytech was already in breach of that agreement. The Borrower, SAS, and presumably Moneytech have in the letter agreement mistakenly assumed the contrary – that the Trade Facility Agreement and the Guarantee – are "applicable and in full force and effect". [120] 10. Thus, there are real questions of common mistake, consideration, and whether the text, especially the term "without prejudice" in the "letter", constitutes a final agreement between the parties. The absence of any correspondence or discussions makes a determination of this question more difficult; the Jones v Dunkel inference tends to militate against a formal agreement. 11. Moneytech's claim under this "letter agreement" was not initially maintained. It first surfaced in the Further Amended Statement of Claim filed 10 November 2021. In its Defence, SAS asserted that there were negotiations between Moneytech and SAS "to try to resolve the matter", [121] that "[i]n time an arrangement was secured, however Moneytech continued to demand full payment, during these negotiations." [122] Whether this "arrangement" is a reference to the letter is unclear: the Defence refers to conduct apparently after the arrangement, but before the date of execution of the letter, [123] but the only arrangement in the evidence is the "letter agreement". 12. The term "arrangement" does not clearly indicate that SAS accepted the result of a legally binding agreement. Mr Wheeler, in an email to Moneytech at 3.17pm on 29 July 2019, [124] referred to signing "an agreement that enables us to move forward". He expressed concerns about the arrangement and sought confirmation from Moneytech that "the case" (presumably the AFCA dispute) could be "re opened should the agreement not work out". [125] 13. There is no evidence that the letter was signed by Moneytech by 3.17pm on 29 July 2019, when this email was sent (and presumably received). As the evidence as to what time on 29 July 2019 they signed the letter lay in the minds or mouths of the Moneytech directors, and they gave no evidence about it, I would infer that it occurred after the email was received. 14. Did Mr Wheeler's email operate to withdraw consent to the arrangement manifested by the earlier execution by SAS and Mr Wheeler? I think it did. In the email, [126] Mr Wheeler is: 1. Saying the "arrangement may not be workable"; 2. Saying it is "a long way short of" what was originally agreed; 3. Saying due to delays SAS has lost a lot of custom; and 4. Asking for acknowledgment or "confirmation" that the case can be reopened, or in other words, that the agreement does not preclude the dispute before AFCA being maintained. 1. The dispute in AFCA relied upon the terms agreed on 5, or perhaps 7, February 2019. It can be inferred that in the concluding paragraph of Mr Wheeler's email, SAS was seeking a concession that the proposed agreement was subject to the existing one, and that SAS would seek to follow the rescheduled plan but its rights were to be governed by the earlier agreement. 2. The response of Moneytech was, on the evidence and the inferences, to sign the agreement. That was not effective to create an agreement without the rights sought by SAS since the further caveats and conditions had been added by SAS and Mr Wheeler before execution. 3. In the result, contrary to what was asserted by Ms De Michele, [127] a Repayment Deed was not agreed and the dispute was not resolved. The different dates of execution by Mr Wheeler and SAS, on the one hand, and by the Moneytech representatives, on the other, together with the email by Mr Wheeler at 3.17pm on 29 July 2019, lead to the inference that any agreement reached was withdrawn before it was executed by Moneytech, and the executions were therefore ineffective to consummate the written agreement. 4. In these circumstances, I am not satisfied that a binding agreement resulted from the letter in late July 2019. 5. This is sufficient to dispose of the liability on the guarantee. 6. But even if SAS is bound by this agreement, contrary to my finding, there are other reasons why the guarantee is not enforceable. The guarantee in the letter agreement is identified by the date, 29 January 2019, and "as amended". This does not correspond with the relevant guarantee asserted by Moneytech, which is expressly undated and unamended. While this is a matter that could have been explained by evidence from Moneytech, there was no such evidence elicited. 7. Further, the letter does not contain any acknowledgement by the guarantor that he is bound. That "the Borrower" agreed [128] to the letter not amending the terms of the trade facility, says nothing of the guarantor so it is not binding on him. Likewise, the Borrower agreeing the Guarantee to be "in full force and effect" [129] does not enliven obligations against the guarantor that did not then exist? It is not enough that the Borrower, SAS, acknowledges that Moneytech "will exercise its rights against the Guarantor(s)", [130] since on my findings, none then existed. And the text contains only an acknowledgment by the Borrower not the Guarantor. The same consequence results from the Borrower agreeing that the Guarantee and Indemnity remains "applicable and in full force and effect", where no such acknowledgement is given by the Guarantor. 8. Mr Wheeler has signed the letter as guarantor, but the obligation and undertaking is only given by the Borrower. In this regard, his execution is an acknowledgement of his knowledge of what the Borrower, SAS, has done, agreed to or acknowledged; but an express undertaking, acknowledgment or agreement by the Borrower is expressly not one by the Guarantor. 9. Finally, the issues of mistake, lack of consideration and the "without prejudice" quality of the letter, considered above, operate at least as much in favour of the Guarantor as they do in favour of the Borrower. 10. It follows that the guarantor, Mr Wheeler, is not made liable by the letter. He could only be liable under the guarantee, as originally signed. Indeed cl F.iii says as much, and for the reasons earlier given, because the guarantee was in respect of a different agreement that was abandoned, that liability did not arise. E. Quantum 1. Accordingly, Moneytech is entitled to recover its loan funds of $109,467.44, the amount proved, [131] plus interest at court rates. 2. SAS is entitled to recover on the cross-claim and to a set-off in respect of the amount of $13,777.21 paid, and the $3,000 for the establishment fee plus interest. 3. Interest is to be awarded on at court rates until today. 4. In view of the relatively modest amounts and the uncertainty as to the starting dates of interest, an approximate date of payment from which interest is to date has been chosen. Principal amount ($) Period Amount of interest ($) Principal plus interest ($) 109,467.44 1 March 2019 to 3 August 2022 17,042.43 126,509.87 13,771.21 2 May 2019 [132] to 3 August 2022 2,015.31 Less: 15,786.52 3,000 1 January 2019 to 3 August 2022 493.73 Less: 3,493.73 Total: 107,229.62 1. The net amount payable is $107,229.62. F. Costs 1. Moneytech has largely succeeded against SAS in respect of its loan, and is entitled to its costs. Were the late July letter enforceable against SAS, I would need to consider whether it should receive indemnity costs pursuant to cl E.3.c). [133] But in view of the breaches by Moneytech, and the circumstance that much of the specific claims on the pleadings have failed, I would not, in any event, order costs on an indemnity basis. If there is thought to be some other reason for an alternative costs order, the parties can make application by email to my associate within two weeks under r 36.16 of the Uniform Civil Procedure Rules 2005. 2. As SAS has succeeded in achieving a small set-off by way of the cross-claim, there should be no order as to the costs of the cross-claim. 3. Mr Wheeler has succeeded on the guarantee claim and is entitled to an order for the costs of the proceedings. As he is self-represented, those costs would generally include only disbursements and not any time-based costs. [134] If there is some reason why an order that Mr Wheeler's costs are not limited to disbursements, he can avail himself of the same application procedure under r 36.16. G. The caveat 1. This Court is not asked, nor does it have the power, to make an order removing the caveat. This judgment may be of relevance in respect of a lapsing notice if the caveat continues to be maintained. H. Orders 1. The orders of the Court are: 1. Judgment for the plaintiff against the second defendant in the sum of $107,229.62. 2. All other claims dismissed. 3. The second defendant to pay the plaintiff's costs of the claim against the second defendant. 4. The plaintiff to pay the first defendant's costs of the proceedings, limited to the first defendant's disbursements. 5. No order as to the second defendant's costs of the cross-claim. ********** Endnotes 1. Exhibit A, CB p 85. 2. Exhibit A, CB p 85. 3. Exhibit A, CB pp 87-151. 4. Affidavit, R J Dyer, 23/8/21, at [15(c)]. 5. Affidavit, R J Dyer, 23/8/21, at [25]. 6. Exhibit A, CB p 152. 7. Exhibit A, CB p 153, see also p 158. 8. Exhibit A, CB pp 154-156. 9. Exhibit A, CB p 154. 10. Exhibit A, CB p 155. 11. Exhibit A, CB pp 155-156. 12. Affidavit, R J Dyer, 23/8/21, at [16]-[17]. 13. Exhibit A, CB p 157. 14. Exhibit A, CB p 157. 15. Exhibit A, CB p 166. 16. Exhibit A, CB p 304. 17. Exhibit A, CB p 221. 18. Exhibit A, CB p 223. 19. Exhibit A, CB p 224. 20. Exhibit A, CB p 227. 21. Exhibit A, CB p 228. 22. Exhibit A, CB pp 235-268, especially 267. 23. Exhibit A, CB p 269-279. 24. Exhibit A, CB p 340. 25. Exhibit A, CB p 233. 26. Exhibit A, CB p 234. 27. See Exhibit A, CB p 85. 28. Exhibit A, CB p 306. 29. Exhibit A, CB pp 226-337. 30. Exhibit A, CB p 308. 31. Exhibit A, CB p 338. 32. Exhibit A, CB p 361. 33. Affidavit, R J Dyer, 23/8/21, at [56]. 34. Exhibit A; CB p 359. 35. See affidavit, R J Dyer, 23/8/21, at [54] and Exhibit A, CB pp 341-358. 36. Exhibit A, CB pp 360-361. 37. Affidavit, P A Wheeler, 31/10/21 at CB 731.8, email of 15/7/19 at 12:49:17pm at items 2)-3). 38. These emails can be identified by where the footnote reference is to Mr Wheeler's affidavit. 39. Affidavit, P A Wheeler, 31/10/21 at CB p 713. 40. Affidavit, P A Wheeler, 31/10/21 at CB p 703. 41. Affidavit, P A Wheeler, 31/10/21 at CB p 714. 42. Exhibit A, CB p 366. 43. Exhibit A, CB p 365. 44. Exhibit A, CB 365, email 7/2/19 at 9.14am. 45. Exhibit A, CB pp 364-365. 46. Exhibit A, CB p 364. 47. Exhibit A, CB p 362. 48. Exhibit A, CB p 362. 49. Exhibit A, CB p 367. 50. Exhibit A, CB p 378. 51. Exhibit A, CB p 375. 52. Exhibit A, CB p 377. 53. Exhibit A, CB, p 378. 54. Exhibit A, CB p 379. 55. Exhibit A, CB p 384. 56. Exhibit A, CB p 388. 57. Exhibit A, CB pp 386-387 58. Exhibit A, CB p 302. 59. Affidavit, P A Wheeler, 31/10/21 at CB 728. 60. Exhibit E; CB pp 697-699. 61. Affidavit, P A Wheeler, 31/3/21, at CB p 735. 62. Affidavit, P A Wheeler, 31/3/21, at CB p 737. 63. Affidavit, P A Wheeler, 31/3/21, at CB p 737. 64. Affidavit, P A Wheeler, 31/3/21, at CB p 735. 65. See Exhibit E, CB p 697 at cl C2, and p 700. 66. Affidavit, P A Wheeler, 31/3/21, at CB p 737. 67. Affidavit, R J Dyer, 23/8/21, at [67], [73(a)]. 68. Affidavit, R J Dyer, 23/8/21, at [73(c)]. 69. Affidavit, R J Dyer, 23/8/21, at [73(d)], see also Exhibit C, CB p 507. 70. Affidavit, R J Dyer, 23/8/21, at [89]. 71. Exhibit A, CB p 166. 72. See affidavit, P A Wheeler, 31/10/21 at 735.7. 73. Affidavit, R J Dyer, 23/8/21, at [15]; CB p 65. 74. Exhibit A, CB p 156. 75. See [13] above, Exhibit A, CB p 306. 76. Ibid. 77. Exhibit A, at CB p 161 at "Conditions Precedent 2.". 78. Exhibit A, CB p 227. 79. Affidavit, P A Wheeler, 31/10/21, at CB 714. 80. Exhibit E at cl C.6; CB p 698. 81. See [20]-[22] above. 82. Exhibit A, CB p 360. 83. Exhibit A, CB p 361 emails 1/2/19. 84. Burger King Corporation v Hungry Jack's Pty Limited [2001] NSWCA 187 at [152]-[153], Peters (WA) Ltd v Petersville Ltd [2001] HCA 45 at [36] referring to Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596 at 607-608 and Shepherd v Felt and Textiles of Australia Ltd (1931) 45 CLR 359 at 378. 85. Exhibit A, CB p 364. 86. See Exhibit A, CB pp 223, 267. 87. Exhibit A, CB pp 364-365. 88. Exhibit A, CB p 362, email 7/2/19. 89. Exhibit A, CB pp 364-365. 90. Exhibit A, CB pp 362-365. 91. Exhibit A, p 228. 92. Exhibit A, CB p 369. 93. In 2017, SAS made a profit of $6,923 but Mr Wheeler drew no salary. 94. Exhibit A, CB p 95. 95. Exhibit A, CB p 96, 99 and 108. 96. Exhibit A, CB p 99, affidavit, P A Wheeler, 31/10/21 at CB p 706.9. 97. (1951) 84 CLR 377. 98. McRae at 413. 99. See [37] above. 100. Exhibit A, p 697 at Items A, C.1, D and F. 101. Exhibit A, p 699. 102. Cl B. 103. Cl C. 104. Cl D. 105. Iacullo v Remly Pty Limited; Iacullo v Iacullo [2008] NSWSC 1176 at [138(1)]. 106. Exhibit A, p 698 at Item F. 107. Exhibit A, p 697, Iacullo at [165]. 108. R T & Y E Falls Investments Pty Limited v The State of New South Wales & ors [2001] NSWSC 1027 at [50] and [53], Iacullo at [82] and [146]. 109. [2008] NSWSC 1176. 110. At [166]-[167]. 111. Iacullo at [165]. 112. Australian Broadcasting Corporation v XIVth Commonwealth Games Limited (1988) 18 NSWLR 540 per Gleeson CJ at 548. 113. FASOC at [16A]. 114. At [40] above. 115. Cl E.3. 116. Cl E.3. 117. Cl C.2. 118. Cl C.3. 119. Cl C.4. 120. Cl E.3. 121. Cl F.iii. 122. Defence at [8]. 123. Defence at [8]. 124. See Defence at [9]-[12]. 125. Affidavit, PA Wheeler, 31/10/21, at CB 735. 126. See [38] herein. 127. Quoted earlier at [38]. 128. See [40] herein. 129. Exhibit A, p 698 at Item F.iii. 130. Exhibit A, p 698 at Item F.iii. 131. Cl E.3.d). 132. Affidavit, R J Dyer, 23/8/21, at [68], [70]; CB pp 72-75, which was marginally less than the amount in the 29 July letter in that it did not contain some minor administration fees. 133. Exhibit A, CB p 384. 134. See at [37] above. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 21 October 2022