OFRIA v MICALLEF SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL STEIN and GILES JJA and FITZGERALD AJA 4 November 1998, 4 November 1998 [1998] NSWCA 166 CONTRACT — loan agreement — trial judge's conclusion (adverse to appellant) based on her assessment of the credibility of witnesses — no justification for this Court's interference with that conclusion. Fitzgerald AJA In April 1984 the respondents made a loan of $8000 to the appellant. A further loan of $4700 was made in May 1984, and a further loan of $4000 was made in July 1984. Each of the loans was repayable with interest. Another loan of $8000 was made by the respondents to the appellant on or about 24 October 1985, when the respondents paid the full deposit of $16,000 in respect of a contract by the respondents and the appellant and his wife as joint purchasers of a property at Rosebery, which was subsequently rented to the appellant and his wife. There is another action on foot seeking the recovery of rent. It is common ground that none of the loans or interest had been paid by 16 January 1986. On that day the appellant signed a document acknowledging that all four loans had been made, that the interest rate in respect of each of the first three loans was 13 per cent for the first year and 15 per cent for the second year, and that the interest in respect of the Rosebery property loan was also 15 per cent. The total purchase price of the Rosebery property was $160,000 and settlement occurred on 24 January 1986. The balance purchase price with adjustments totalled $145,102.24. In order to participate in the completion of the purchase of the Rosebery property, the appellant and his wife had borrowed $90,000 from the Commonwealth Bank earlier in January 1986. That amount was credited to their joint cheque account, which on 22 January, after their previous overdraft was satisfied, showed a credit balance of $81,645.94. A total of $81,037.37 was withdrawn from the cheque account of the appellant and his wife on 23 January 1986, the day before completion of the purchase of the Rosebery property, leaving a credit balance in the joint account of only $277,031. The difference between $81,037.37, the amount withdrawn from the appellant and his wife's cheque account on 23 January 1986 and $72,555.12 which was half the adjusted balance purchase price in respect of the Rosebery property is $8,426.25. Apart from the appellant's assertion, there is no evidence that he had more than that amount available to repay the respondents any part of what he owed in January 1986. On 29 January 1986, the male respondent made a note on the document of 16 January 1986 in the following terms, "PS, a loan of $8000 was paid in full plus the interest on 29 January 1986". The respondents say that that entry referred to the repayment of the loan of half of the deposit in respect of the Rosebery policy. It seems plainly to be correct that that loan was then satisfied, even if the appellant's claim that he paid an additional $8000 to the vendors in respect of that purchase be accepted. 2 UNREPORTED JUDGMENTS The appellant's case is that he not only repaid the half of the Rosebery property deposit with interest, which he says was effected by him and his wife paying an additional $8000 to the vendors and the respondents paying only half of the adjusted balance purchase price less the appellant's and his wife's overpayment, but that he also repaid the initial loan which he had borrowed in April 1984 plus interest. The respondents denied that that April 1984 loan or the interest on that loan has been repaid. The trial judge found that the respondents were truthful witnesses and that the appellant was not. The appeal against her Honour's finding that the April 1984 loan has not been paid consisted of an attempt to point to combine various bits of evidence which it was submitted should have led the trial judge to the opposite conclusion. Complaint was also made of her Honour's discretionary rejection of the appellant's tender of certain of the respondent's bank documents from which it was apparently hoped to establish that the respondents did not provide their full half share of the adjusted balance purchase price of the Rosebery property, seemingly on the footing that that would somehow bolster the appellant's case. The documents had not been put to the respondents during their evidence and only emerged as the appellant's case was drawing to a close. Their potential significance was limited since the critical issue on this part of the parties' dispute was how much the appellant had paid the respondents in January 1986, not the mechanics by which payment was effected, a matter which occupied a disproportionate significance in the trial. No sufficient reason was established for this Court's interference with either the trial judge's discretionary rejection of some of the respondent's bank documents, or her finding that the appellant repaid only the Rosebery property deposit loan plus interest in January 1986. There was ample evidence to support that finding which of course only required her Honour to be satisfied that it was more probable than not that the appellant had not repaid the April 1984 loan plus interest at that time. Such matters as the appellant could point to did not cast any real doubt on that finding, especially when the evidence of the appellant's financial position strongly suggested that he did not have funds available to repay the April 1984 loan and interest as well as the loan in respect of the Rosebery property and interest in January 1986. In his evidence the appellant gave inconsistent versions concerning the source of the money which he allegedly paid, except for the single amount of approximately $8000 which remained from the bank loan to the appellant and his wife of $90,000. The appeal on this aspect of the matter must fail. The appellant's case in respect of the May and July 1984 loans is that he repaid them with interest on 12 June 1990. The respondents then accepted and banked a cheque for $20,409.46 from the appellants, but some days later repaid the appellant $20,000. The parties' evidence concerning the circumstances of those payments differed. At that time there were disputes between them concerning the loans, rent for the Rosebery property, and repairs to that property which were the basis of a monetary claim by the appellant against the respondents. The trial judge found that the appellant insisted that the cheque of $20,409.46 was for rent, and that it was neither offered nor accepted as payment of any loans. Her Honour obviously considered that the appellant should and would receive any appropriate benefit with respect to what occurred on 12 June 1990 in the separate action by the respondents against the appellant for rent. URJ OFRIA v MICALLEF (Stein JA) 3 Once again the trial judge's conclusion adverse to the appellant was based on her assessment of the credibility of the witnesses, as she expressly stated. The appellant's attempts to construct theories to impeach her Honour's findings were not without substance on this aspect of the case. However her Honour's findings of credit were undoubtedly influenced by reference to both the demeanour of the witnesses and the implausibility of the appellant's testimony, especially in relation to the events of January 1986. I am not satisfied that this court would be justified in interfering with her Honour's findings in respect of the payment of $20,409.46, which was made by the appellant to the respondents on 12 June 1990. In the circumstances therefore the appellant has failed on all grounds and the appeal should be dismissed with costs. Stein JA I agree. Giles JA I also agree. Stein JA The order of the court will be that the appeal is dismissed with costs. Appeal dismissed with costs. Counsel for the appellant: M S Zammit Solicitors for the appellant: Tony Vella Counsel for the respondent: L Tyndall Solicitors for the respondent: J L Burrell