New South Wales Supreme Court CITATION : Bennett v Goodwin [2005] NSWSC 513 HEARING DATE(S) : 24/5/05 & 25/5/05 JUDGMENT DATE : 2 June 2005 JURISDICTION : Equity JUDGMENT OF : Campbell J DECISION : Agreement enforceable. Gross amount of plaintiff's claim made out with one exception. Orders to await determination of remaining questions in the proceedings. CATCHWORDS : CONTRACTS - general contractual principles - intention to enter legal relations - effect of "entire agreement" clause - construction of a particular agreement - factual findings concerning quantum Black Uhlans Inc v NSW Crime Commission [2002] NSWSC 1060 CASES CITED : Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd [2001] FCA 1833; (2001) 117 FCR 424 Johnson Matthey Ltd v AC Rochester Overseas Corp (1990) 23 NSWLR 190 Gail Margaret Bennett - Plaintiff PARTIES : Clark Philip Ross Goodwin - Defendant FILE NUMBER(S) : SC 5085/04 A Enright - Plaintiff COUNSEL : P J Pollack, solicitor - Defendant Kingston Swift - Plaintiff SOLICITORS : Beazley Singleton - Defendant LOWER COURT JURISDICTION : IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION EQUITY LIST CAMPBELL J 2 JUNE 2005 5085/04 GAIL MARGARET BENNETT v CLARK PHILIP ROSS GOODWIN JUDGMENT HIS HONOUR: Nature of Claim 1 This is a claim to recover money alleged to have been lent, together with interest and enforcement expenses, and for enforcement of an alleged agreement to give security over certain land for those amounts. This judgment relates to a hearing which was a trial of all questions in the proceedings except the value of a certain spreader, tractor, and accessories. The Factual Background 2 The plaintiff and the defendant met in about 2000. A relationship developed between them, and they became engaged to be married. 3 The plaintiff has at all relevant times lived at a property known as 'Sunning Hill', located at Marshdale Road, Dungog. Title to that property was, prior to January 2003, held by Rodabi Pty Ltd ("Rodabi"), a company controlled by the plaintiff's parents. It had been purchased by Rodabi as trustee for the plaintiff with the proceeds of a life insurance policy on the life of the plaintiff's late husband, who had died in 1995. 4 The defendant at all relevant times has been the registered proprietor of a two-thirds interest as tenant in common in a rural property known as 'Summer Leaves', situated in Clarence Town Road, Dungog. The registered proprietor of the other one-third interest is and at all relevant times has been his mother. 5 The defendant developed a plan whereby 'Summer Leaves' would be subdivided, and various lots within it sold for use as rural weekenders. The defendant and plaintiff planned that when the subdivision and sale was completed the plaintiff, who has a long-standing involvement with horses, would be able to carry out various activities connected with horse breeding and horse riding on the part of the property which the defendant kept. As well, they had a plan to build a house which would be their matrimonial home on part of 'Summer Leaves'. 6 Wadley Holdings Pty Ltd ("Wadley Holdings") is a company of which the plaintiff's parents were directors, and in which Rodabi was a shareholder. Prior to May 2001 'Sunning Hill' had been mortgaged to the National Australia Bank ("NAB") to secure a debt owed by Wadley Holdings. That loan was one of around $15,000, and had been incurred by the plaintiff. The plaintiff's parents had given NAB a guarantee of that debt. 7 In May 2001 a conversation took place between the plaintiff's father, Mr Finn, and the defendant, in which the defendant said that he understood that the company had a debt to the NAB of approximately $15,000, and that he would be prepared to take over the company and pay off the debt. The two men agreed that if the defendant paid off the debt, he could have the company. Documents were then executed to transfer the shareholding in the company to the defendant, and arrangements were made for him to become a director. However, the defendant did not pay off the debt owed by Wadley Holdings to NAB. He promised Mr Finn on several occasions that he would pay off the debt "tomorrow", but never did so. 8 In April 2002 NAB served a formal demand on Wadley Holdings, requiring it to repay the debt, which had by then grown to a little over $41,000. The debt continued unpaid for the whole of 2002. 9 On 23 April 2002 Wadley Holdings purchased a business called 'Just Ride Western Wear', which sold clothing to people involved in activities connected with horses. The defendant provided the whole of the purchase price which Wadley Holdings used to buy that business, $52,500. The plaintiff worked in that business, but derived no personal benefit from it. Ownership of the business name was transferred from Wadley Holdings to the plaintiff on 15 April 2003, in circumstances which were not examined in the evidence. The defendant executed a resignation as director of Wadley Holdings on 1 March 2003, but for reasons not satisfactorily explained by the evidence, that resignation has never been registered. Hence the defendant remains the director and shareholder of Wadley Holdings. 10 Cunningham & Adam are solicitors who acted for the plaintiff's parents. By September 2002 Cunningham & Adam were involved in the problem which had arisen concerning non-payment of Wadley Holdings' debt to NAB. In September 2002 the defendant gave Cunningham & Adam a cheque for $22,000, made out to their trust account, which was not met upon presentation, because the defendant had stopped payment on it. 11 Throughout the time relevant to this case the defendant was short of money. In October 2001 the defendant requested the plaintiff to lease a Jeep in her name, which was substantially for his use, because of his poor credit rating. She did so. In June 2002 the defendant's phone was cut off, and the telecommunications company with which he dealt would not re-connect it. He asked the plaintiff to supply him with a mobile phone, and to use her fax and email for business purposes, on the basis that he paid the entirety of her phone bills. She assented, and supplied him with her mobile phone and, afterwards, the defendant used that mobile phone as his own. The numbers which appeared on the defendant's letterhead for a telephone number, fax number, and mobile phone number were all those of the plaintiff. The defendant was regularly at the plaintiff's home at that time, five or six days a week, and sometimes twice per day, and he made frequent use of her email, fax and land line. However, he did not always pay the telephone bills. He asked the plaintiff to pay one phone bill in April 2003 from money the plaintiff had borrowed, in circumstances discussed later in this judgment, from Westpac, and promised it would be repaid. Over the period 13 September 2002 to 19 January 2004 he paid 16 cheques to Telstra totalling $55,010.70, all of which were dishonoured. He referred to cheques which he knew would be dishonoured as "dumb cheques". By December 2003 Telstra had disconnected the telephone from the plaintiff's house. That led to an agreement between the plaintiff and the defendant that certain cattle of the defendant would be sold to enable the plaintiff to receive the amount of the outstanding Telstra bills. 12 As well, in June 2003 he gave the plaintiff a cheque for $7,500 drawn on the account of a company called 'The Ensemble Group Pty Ltd'. That company was a company of which the defendant had been a director and secretary, but which had been deregistered in June 2001. The bank account on which the cheque was written had, of course, been closed by June 2003, and in consequence the cheque which he gave to the plaintiff was returned unpaid. He could offer no explanation in cross-examination as to why he had done this. 13 In the last few months of 2002 the defendant was associated with Mr John Rhodin in various business deals. One strand of these deals involved the defendant providing finance to Mr Rhodin for dealing in second-hand cars. Another strand concerned the subdivision and development of 'Summer Leaves'. On 26 September 2002, at Mr Rhodin's request, the defendant and his mother executed a joint venture agreement with Mr Rhodin's son concerning the development of 'Summer Leaves', under which Mr Rhodin Jnr would receive one-third of the net proceeds of the development. 14 'Summer Leaves' had two mortgages on it in the latter months of 2002 – a first mortgage to a mortgagee associated with Stacks Finance, and a second mortgage to, or to some entity associated with, Mr Russell Cupit. The plaintiff did not know about these two mortgages at that time. She was aware, however, that the defendant "had a bad credit rating and no-one would touch him". The Oral Loan Agreement 15 The plaintiff had a conversation with the defendant, at a time she fixes as being approximately November 2002, to the following effect: GOODWIN: "As you are aware I wish to develop my property but am unable to do so because I do not have the funds and am unable to obtain the necessary finance. My property is unencumbered. I need approximately $200,000 to proceed with the development. Will you loan me this amount? You could finance it by obtaining a loan from the bank that would need to be secured over your property. My business partner, John Rhodin, expects to be in funds to the sum of approximately $300,000 in three months time. I really need to proceed with this development immediately. You will be repaid in three months when I receive funds from John Rhodin. I will reimburse you for all expenses associated with obtaining the loan from the bank including legal fees and interest. It will not cost you anything." BENNETT: "How on earth will I get this loan, I'm on a pension." GOODWIN: "I will take care of that." 16 At that time, the plaintiff was not working, and her only source of income was a carer's pension, arising from her having responsibility for her teenage son who suffers from a medical condition called "Aspergers Disease". 17 After considering the matter she told the defendant she would give him the loan, saying that she would pay his development expenses as they were incurred rather than giving him the $200,000 in a lump sum. 18 It is possible that the plaintiff was a little out in her estimating the time of the conversation as "approximately November 2002", because there is a tax invoice dated 16 September 2002 for the valuation of the plaintiff's property for the purpose of obtaining the loan. However, if there was any mis-estimation of the date on the plaintiff's part, it is of no consequence. 19 Mr Rhodin, at the defendant's request brought documents from Sydney to the plaintiff's home to sign concerning the Westpac loan application. Those documents were filled out by the plaintiff and the defendant together over the course of twenty to thirty minutes, though Mr Rhodin was not privy to their discussion. The documents then were given to Mr Rhodin, who took them back to Sydney for delivery to Westpac. 20 The plaintiff's evidence is that she did not fill in an amount in the loan application. The defendant's evidence is that he did not in any way know of the amount of loan which had been applied for. Mr Rhodin's evidence is that he did not read the loan application and had no idea how much they were applying to borrow. I find that the defendant was aware that the plaintiff had made an application for a loan supported by information sufficient to justify a bank in making a loan of the order of $200,000. 21 At some stage in the last couple of months of 2002 the plaintiff received a loan offer from Westpac. The loan offer document bears a footer date of 29 November 2002, so it is likely that she received it on or soon after that date. It offered a loan of $196,000, secured by first mortgage over 'Sunning Hill'. 22 Around this time the defendant also asked the plaintiff whether she would be able to discharge the debt which Wadley Holdings owed to NAB from the loan monies which she would receive from Westpac. The plaintiff agreed to that. I mention that it would in any event have been necessary for the loan of Wadley Holdings to NAB to be discharged if NAB was to release its mortgage over 'Sunning Hill', and thereby clear the way for a grant of a first mortgage over 'Sunning Hill' to Westpac. The defendant had promised the plaintiff's father than he would discharge the debt of Wadley Holdings to NAB, but had not done so. Thus, by the plaintiff discharging that debt she was discharging an obligation of the defendant, at his request. That in itself is enough to create an implied obligation on the defendant to repay her. As well, I accept the following evidence of the plaintiff: "Q. …So did he not promise to you that he would pay it out? A. He promised to me that he would pay it out for my father. Q. He promised to you that he would honour the commitment to your father? A. Yes." 23 The plaintiff then instructed Cunningham & Adam to negotiate with NAB. The guarantee which the plaintiff's parents and Rodabi had given to NAB concerning the debts of Wadley Holdings had been, it seems, limited to $15,000. Cunningham & Adam reminded NAB of this limitation on the guarantee, and said that their clients had not agreed to any increase in the original guarantee, and indeed had specifically told the bank not to permit an extension of the debt beyond $15,000. Cunningham & Adam submitted that the guarantors were responsible only for $15,000 plus accrued interest. That argument resulted in NAB agreeing to discharge the loan for an amount of $19,390. 24 Settlement of the loan from Westpac took place on 10 January 2003. On that date 'Sunning Hill' was transferred from Rodabi to the plaintiff, the NAB mortgage was paid out, and the plaintiff granted a fresh mortgage to Westpac. After payment of NAB and the legal costs associated with the transaction, the plaintiff received $174,272. 25 The plaintiff and the defendant travelled together to the office of Cunningham & Adam at Raymond Terrace to collect the cheque for $174,272. They then travelled to the Westpac bank at Maitland, where the defendant had arranged for the plaintiff to open an account, and deposited it into that account. 26 Around that time, the defendant told the plaintiff that Brenton Tong was co-ordinating the financial aspects of the development application. Mr Tong is the managing director of Phillips Dean Brickwood Pty Limited, a financial services firm. The defendant asked the plaintiff to pay a cheque to Phillips Dean Brickwood in the sum of $90,000, and told her it would be used in the development application to Dungog Council. The plaintiff drew a cheque for $90,000 in favour of Phillips Dean Brickwood, and gave it to the defendant. 27 The defendant had, in about December 2002, told Mr Tong that he was helping the plaintiff to refinance her property. While Mr Tong cannot recall the exact words of what else the defendant told him, the impression the conversation made on him was that the plaintiff was lending the proceeds of re-finance to the defendant for the development of 'Summer Leaves'. In around January 2000 Mr Goodwin telephoned Mr Tong again, and said words to the effect: "Gail has refinanced her property for me. She has requested that you hold the funds in your account." 28 Shortly after, the defendant telephoned Mr Tong and asked him to pick up a cheque for $90,000 from the defendant's former wife at Clovelly. Mr Tong collected the plaintiff's cheque for $90,000, and deposited it into his firm's account. From time to time, he made disbursements from that $90,000 at the request of the defendant. The precise amounts disbursed were later described by Mr Tong as follows: Date Sum Desc Dr Cr Item Description 20/01/03 Deposit $90,000 Deposit from Ms Bennett 21/01/03 Cheque Clearance Fee $15 Clearance fee for above transaction 22/01/03 Esanda $37,903 Payment to Esanda for "Black Mercedes" as instructed by Mr Goodwin 23/01/03 Stacks Finance $22,000 Payment of interest and arrears to Stacks Finance as instructed by Mr Goodwin 24/01/03 Fees – B Tong $5,000 Payment of outstanding debt to Brenton Tong as instructed by Mr Goodwin 28/01/03 Russell Cupit $10,000 Payment of interest and arrears to Russell Cupit as instructed by Mr Goodwin 04/02/03 DC Bourke $12,500 Payment for road building by DC Bourke as instructed by Mr Goodwin 07/03/03 Coopers Lawyers $840 Payment to Coopers Lawyers for agreement between Mr Rhodin & Mr Goodwin as instructed by Mr Goodwin 07/03/03 Tim Mooney $270 Payment to Tim Mooney for overhead photography relating to marketing of "Summerleaves" property. Cheque given to Tim Mooney via Mr Rhodin under instruction of Mr Goodwin. 07/03/03 John Rhodin $340 Payment to John Rhodin for expenses relating to marketing of "Summerleaves" property with Mr Goodwin's knowledge $88,868 $90,000 Balance $1,132 Awaiting instruction from Ms Bennett At some stage during 2004 Mr Tong sent the balance of $1,132 to the plaintiff. The Written Loan Agreement 29 During the period from January to late March 2003 the plaintiff asked the defendant on a number of occasions when he expected to receive the funds from John Rhodin, but did not receive any precise reply. She therefore telephoned Mr Tong, and told him of her concerns about repayment of the loan. Mr Tong offered to have a legal document drawn up for her and the defendant to sign. He emailed a document to the plaintiff, which he adapted from a precedent which he had on his computer system. On a day which is probably 25 April 2003 the plaintiff and the defendant had a heated discussion, in which she said words to the effect: "You have still not repaid me the monies I have loaned you, even though its coming up to three months. I will not give you any more money unless you sign this document." The defendant signed the document, but wrote under his signature "Under Protest 25/4/03 7:45 pm". He left the document on the plaintiff's kitchen table. 30 A few days later, the plaintiff found that the document was missing, and said to the defendant "The document you signed is missing. I need you to sign another copy. Unless you sign it I will not loan you any more money." The defendant then signed another copy of the document. This time, no date was placed under his signature, nor any notation about it being "Under Protest". The second document was signed when the defendant called at the plaintiff's house in the morning. Donna Tickle, a young woman who now lives at the plaintiff's house, saw him sign it (although she was in the next room at the time), and later signed the document herself as a witness to the signatures of both the plaintiff and the defendant. 31 The agreement has a date on it, in the same typescript as the body of the agreement, of 14 April 2003. It follows from what I have said so far that both occasions when the defendant signed it were in fact after 14 April 2003. 32 The loan agreement document is poorly drafted. It refers to the plaintiff as "Lender" or "Us". It refers to the defendant as "Borrower" or "You". It recites: "A This agreement contains the terms and conditions upon which You (the Borrower) agree to borrow money from Us (the Lender) B The Loan to be provided by Us is to comprise the Facility detailed in the Schedule." 33 Clause 1.1 contains definitions, including the following: ""Date of Advance" means the date on which the Loan is provided by Us and disclosed in the schedule. "Facility" means the Loan unless this agreement provides for the Loan to be divided into separate component parts when Facility means each such designated part and "Facilitates" [sic] has a corresponding meaning. "Facility Limit" means the amount set forth as the Facility Limit for a Facility as set forth in the Schedule and subject to reduction as provided in this agreement. "Loan" means the loan of the Facility Limit set forth in the Schedule "Secured Moneys" means all principal moneys, interest thereon and all fees and charges payable in accordance with the terms of this agreement. "Security Property" means any property that is the subject of a Security." 34 The document has only the following to say about the plaintiff making the facility available to the defendant: "2. CONSIDERATION You acknowledge that at the Date of Advance the Loan was provided and drawn-down in part and you have provided us (a) with an unregistered Second Mortgage registered by Caveat over the Security Property as security for the Advance …" It was inaccurate to say that at the date of execution of the document any second mortgage had been provided to the plaintiff, nor was there any caveat over 'Summer Leaves'. 35 The Loan Agreement also provided: "4. GENERAL FEES AND CHARGES You agree to indemnify Us against, and must pay on demand to Us or as We direct all fees and charges (including but not limited to, legal costs and expenses on a full indemnity basis) which We pay, or are liable to pay, in connection with: · the negotiating, preparing, stamping and registration of this agreement and the Security, · the making of the Loan, · protecting, improving or exercising a right, power or remedy of ours hereunder or under a Security, · the discharge of a Security, · any valuation fees, lenders mortgage insurance premiums or other amounts payable by Us in respect of the Loan, · any establishment fees previously advised to You, and · a receipt or payment of money hereunder. … 6.1 Security for the Loan You agree that the security can be held by Us as security for the Loan. … 8.2 Enforcement expenses If You breach the terms of this agreement or of any Security, You will be required to pay all expenses which are incurred by Us, in enforcing or preserving our rights under the Loan or the Security including any goods and services tax payable by Us in respect hereof. These expenses include all or our expenses incurred in preserving or maintaining the Security Property (including paying insurances, rates and taxes) after a default and collection expenses. Enforcement expenses may be debited to the Loan, and will attract interest at the same rate and in the same manner as principal moneys. … 10. ENTIRE AGREEMENT This agreement contains all of the terms and conditions of the proposed loan by Us to You and supersedes any prior letter of offer and all prior negotiations, communications and agreements in respect of the Loan. … PRINCIPLE AMOUNT ADVANCED AND SCHEDULE OF COSTS Principle amount advanced $196,000 Add: Costs - Brokerage Fees [Mercantile Lending Pty Ltd] $ - - Valuations Fees $ - $ (Preparation of loan agreement etc..) - Cost of Caveats and Mortgage Stamping $ - - Legal Fees (Advise to Lender) $ - Total Loan Advance $196,000 Interest Charges of 6.5% per year $ 12,740 Total Amount to be Re-Paid at 12 months $208,740 Total Amount to be Re-Paid at 24 months $222,308 SCHEDULE FACILITY TYPE OF FACILITY Variable Interest (see NAB Std Variable rate) 12 or 24 Months TERM FACILITY LIMIT $196,000 (Total Loan Advance) DRAWDOWNS DATES 20th January 2003 INITIAL HIGHER RATE 13.0% pere annum INITIAL LOWER RATE 6.5% per annum Unregistered Second Mortgage over property described as Folio Identifiers: Lot 1 DP 366722 & SECURITY Lot 2 DP 206527 & Lot 3 DP 206527 And known as: "Summerleaves" 4515 Clarence Town Road, Dungog NSW 2420 REPAYMENT DATE 20th January 2004 or 20th January 2004 Term: 12/24 months Loan Advance $196,000 Interest Amount $12,740 / 26,308 Total Due $208,740 / 222,308 Date Due 20th January 2003 or 20th January 2004 36 The first line of the part of the Schedule relating to "repayment date" contains an obvious typographical error, so that the second reference to "20th January 2004" should be read as a reference to 20th January 2005. The "Date Due" line should also read "20th January 2004 or 20th January 2005". 37 This agreement, like all agreements, is to be construed against the background of the information known to the parties at the time of execution. Both parties were perfectly well aware that $196,000 had not been advanced as at the date of the agreement. The only "drawdowns date" stated in the Schedule, 20 January 2003, is the date when Mr Tong received the cheque for $90,000. It is only that date of 20 January 2003 which could meet the definition of "Date of Advance" in Clause 1.1, as it is only 20 January 2003 which is a date "disclosed in the schedule". However, recitals A and B, when read with the Schedule, acknowledge an agreement by the defendant to borrow. There would be an implied obligation on the plaintiff to lend. The precise amount which is to be borrowed and lent is not stated, but it is to be within a facility limit of $196,000. Clause 2 contains an acknowledgement that the total loan of the Facility Limit was drawn down in part on 20 January 2003. That statement was accurate, as it was on 20 January 2003 that Mr Tong deposited the cheque for $90,000 into his firm's bank account. The agreement is silent as to the manner in which other draw downs, up to the Facility Limit, might occur in future, or had already occurred. However, it is the total amount advanced which is to be secured by the Security. 38 The defendant places reliance upon the entire agreement clause in the Loan Agreement. Such a clause: "… excludes what is extraneous to the written contract: but it does not in terms exclude implications arising on a fair construction of the agreement itself, and in the absence of definite exclusion, an implication is as much a part of a contract as any term couched in express words.": Hart v MacDonald (1910) 10 CLR 417 at 430 per Isaacs J. 39 In Johnson Matthey Ltd v AC Rochester Overseas Corp (1990) 23 NSWLR 190 at 196 McLelland J said: "The effect of any particular clause will of course depend on its own terms and context, but in general it may be said that … an "entire contract" clause will bind the parties in accordance with its terms, properly construed." It seems to me that in the present agreement, Clause 10 says that there are no agreements about the subject matter with which the Loan Agreement deals which are not to be found within the document: cf Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd [2001] FCA 1833; (2001) 117 FCR 424 at [440], 542. The subject matter with which this Loan Agreement deals is (appropriately enough for an agreement which establishes a facility limit) one which sets out a framework within which borrowing can occur, but does not state all details concerning that borrowing. Necessarily, there must be requests for borrowing, within the facility limit, on occasions other than the entering into of the Loan Agreement. In my view, the existence of the "entire agreement" clause does not provide a reason for denying the plaintiff's claim in the present case. 40 The account of the facts that I have given so far is one which in substance accepts the plaintiff's evidence. The defendant gave evidence that in approximately November 2002 he told the plaintiff that Mr Rhodin told him they needed approximately $90,000 to keep going with the development of the property, that he was mortgaged up to the hilt and could not raise the finance and was a couple of months behind on his own mortgage, and that Mr Rhodin said that he could raise $90,000 against 'Sunning Hill'. He said that he told the plaintiff that the $90,000 would be used for development application costs, consultant's fees, and about $20,000 to pay the arrears on his mortgage. 41 The defendant is so unreliable a witness that I would not be prepared to accept anything he said unless it was corroborated or inherently probable or against his interest. I accept Mr Rhodin's evidence that he denies having told the defendant at any stage that a sum of $90,000 would be needed to keep going with the development on the property. I also accept Mr Rhodin's evidence that he denies ever saying to the defendant anything to the effect that he expected to be in funds to the sum of $300,000 in three months time (as the defendant had told the plaintiff was the case – see para [15] above). The defendant is not even particularly clear in his evidence that the $90,000 was to be a loan. His view of the financial transactions between the plaintiff and himself appears to be that they were part of the ebb and flow of monetary payments, not intended to have legal consequences, which occur between people intending to marry and have a life together. 42 The defendant denies that he knew the amount inserted in the loan application, and says that it was only after settlement of the mortgage took place that he became aware that the plaintiff had in fact signed a mortgage of approximately $200,000. 43 On 1 October 2002 a draft document was prepared, entitled "Sunning Hill Funding Conditions". It is mostly in typescript, and includes the following: · Cross caveat security on "Summerleaves" title. · Funds raised to be controlled by GMB and Brenton Tong. · "Sunninghill" debt retirement to be 1st priority settlement (in full) as soon as funds are available. … · All establishment fees, commissions and valuation costs to be paid by the "Summerleaves" development consortium." "GMB" in this document is clearly a reference to the plaintiff. The document also makes reference to the plaintiff having two blocks on the proposed subdivision in her name. The provenance of this document is not established, but it bears a post-it note in the defendant's handwriting addressed to Mr Rhodin, saying: "Would you photocopy any document given to Westpac so we have a back-up if Westpac have questions to ask or clarify." From this document I conclude that the defendant had a close interest in following and assisting the progress of the Westpac loan application. 44 The defendant also says that after settlement of the Westpac mortgage in January 2003, at the same time as he asked the plaintiff to pay $90,000 to Phillips Dean Brickwood, he told her that Mr Rhodin knew of a proposal for making money involving a black Mercedes that had been repossessed, which should produce a quick $20,000. The defendant says that she authorised him to pay about $40,000 from the $90,000, and that it was pursuant to that authority that he instructed Mr Tong to make the payment of $37,903 to Esanda on 22 January 2003. The plaintiff, for her part, denies knowing anything about the black Mercedes, or authorising any such payment. 45 I accept the plaintiff's denial. As well, Mr Rhodin has given evidence that, as part of one of the car deals that he and the defendant had entered into, it was necessary for the defendant to pay out a loan to Esanda on a black Mercedes. As early as 21 November 2002 the defendant asked Mr Rhodin to arrange for Mr Tong to pay out the Esanda loan on the black Mercedes. Mr Rhodin sent a fax to Mr Tong on 21 November 2002 asking him to pay out an amount of $37,159.64 to Esanda "From the Westpac advance due approx 26/11/02." The date of this communication does not sit well with the defendant's evidence that it was only after the advance had been made that he discussed with the plaintiff the possibility of making a payment connected with the black Mercedes from the $90,000. 46 On 1 July 2003 the defendant sent a handwritten fax to the plaintiff, following a telephone conversation with her. In it he said: "I am ashamed of what has happened – not for being found out – but because I have inflicted this on you, my best friend! I am currently doing all I can to rectify the situation – it should have all been concluded months ago but people and circumstances created unexpected delays at every point. … This may sound strange but I am pleased it has all come out, I know I have the necessary solutions in place to fix the money side. I am not at all sure on the emotional side – hopefully when all is 'said and done' there will be spare for you and I to re-build. I will call you later – at present I am too ashamed." 47 The defendant also sent a fax to the plaintiff dated 5 July 2003, which included the following: "Not withstanding how ashamed I feel about all the deceit and stories concocted over the past months whilst waiting for my things to fall into place with some sort of assemblage of order and sanity, had it happened within the original time scale it would have triggered the necessary mechanisms to at least bolster my lost credibility as well as going someway to address my very very low self-esteem. Hopefully some good will come from this nightmare! On a practical and positive note we should take this opportunity, whilst we are in subjective frames of mind, take the time to examine our relationship and decide to either sever it or re-build it from here on! You may have already done so! I found it an interesting phenomenon today talking with you, when you stated that "I have risked my property to save yours!" I recall asking for your assistance to raise some necessary money so as to progress the development of "Summerleaves" which was to include the building of our own residential home on the property, allowing you to retain your property for leasing purposes and market capital growth – my how things change! To further confirm this understanding was the fact that you and your sister, Sue, designed a perfect floor plan layout. If you recall this request to you was made in consideration of my poor standing financially. It also necessitated a settlement with the East Maitland National Australia Banking which had a fully drawn overdraft facility of some $15,000+ through Wadley Holdings Pty Ltd, well prior to my relationship with you. This debt was secured by your property as well as your parents property and their personal guarantees – which, as we discussed on a number of occasions, resembled a 'total security over-kill!' The facility finally negotiated with Westpac was for $196,000 against the value of your property as well as your personal income assessment, based on ATO tax returns provided. An immediate pay-out to NAB on settlement of this loan facility for $22,000 odd dollars facilitated the title deeds to your property to be handed to Westpac for their security. The exact amount you can substantiate within the reconciliation. Gail, you have been the most trusting and supportive partner I could wish for and to learn of the real 'state of the nation' this week, via Brenton Tong, in the way you did is unforgivable from my position. What started off as a simple cover-up has mutated itself into the most heinous outcome imaginable, the blame lands directly at my feet. You gave me every opportunity to open-up but I kept up the ridiculous repartee of scenarios, which if it were not so tragic, took an extraordinary amount of creativity and presumed plausibility that I wish I had put the energies into something far more productive! The Business Side of where we are: I am currently taking all steps to ensure you are not disadvantaged any further with this loan facility as well as liquidating the Jeep lease facility. I am continuing on with the Chev and Gooseneck procurement, Jeep replacement vehicle, 'Ima Cool Seeka' purchase and the Greg McNamara horses. Hopefully, these should be concluded in the coming week. So as to fully address the Westpac loan facility, I will need you to provide a fully accounted and itemised reconciliation of all the monies spent as a result of this facility as well as your Visa card. This reconciliation should have a commencement date from January 10th; 2003 and conclude at (say) June 30th; 2003. This is a reasonable base requirement considering the fact you are requesting that I fully pay-out the $196,000 facility in addition to your Visa card which, if I recall, has a balance owing of some $14,500, totalling $210,500. If my memory serves me correctly you issued the initial payment on January 16th; payable to CoePlan Pty Ltd for an amount of $10,000. The condition of this payment was that Geoff Hawke, the principal of CoePlan, was to provide a receipt for this amount as well as a scheduled and itemised cost breakdown for scope of work within the Development Application preparation and lodgement. Your cheque and its conditional release details was given to, non-less than John Rhodin. To this date and after many requests by myself as well as Brenton Tong, to John Rhodin, was to have Geoff Hawke provide a receipt and a scheduled scope of work with associated costs – nothing has been forthcoming. An electronic transfer some days later into the Westpac Trust Account of Phillips Dean Brickwood, administered by Brenton Tong as Managing Director, was made for $90,000. At the time of compiling this memo, I am unable to provide a detailed reconciliation of distribution of these monies. In late March or early April you provided an additional $10,000 by deposit into my Westpac account to cover earthworks part payment. This would bring the major support payments to $110,000. No doubt there are additional support out-goings such as Jeep lease payments as well as repairs to the same, all which need to be identified within the whole loan facility funds drawer down process. As you are aware, Brenton Tong provided you with a contractual undertaking for me to sign. This document secured your financial assistance against myself and the "Summerleaves" property. If you recall, I initially signed this document 'under protest' as I had no control or discretion for the distribution of the funds or an opportunity to have legal representation or opinion on it. As well it required that I undertake to compensate you to the sum of $220,000+ in total. The 'Just Ride Western Wear' business which is operated and registered under your name will some how have to be factored into our work out, as it had a tangible cash cost to me of $52,500 back in March 25th; 2001. As you well appreciate, I did not make the same contractual demand for security for this amount of money from you, the payment was made in good faith and, as I thought, provided you with an alternate income source from the 'hard and gruelling yards of physical horse training' . 48 The defendant in cross-examination, immediately before this document was put to him, denied that he had ever said to the plaintiff that he had been deceitful about his dealings with her. Later in cross-examination he explained the "deceit and stories" to which this document referred as being that he had kept on being told stories by Mr Rhodin about when money would be coming from the car deals, which he had passed on to the plaintiff, and which had repeatedly proved incorrect. I do not accept that explanation. He had deceived her about his property being unencumbered, and had deceived her by using a large part of the $90,000 paid to Mr Tong for purposes different to those she had authorised. It is likely that those two matters were at least part of what he was referring to. 49 In cross-examination he was asked: "Q. Now, first of all, what had you been found out about? A. Well, on the basis that our whole relationship was collapsing around us. Q. So, it was just the collapse of the relationship? A. Absolutely. Q. It wasn't the fact that you had lied to her about the property being unencumbered? A. No, I had not stated that to her. Q. What were you ashamed about? A. That our relationship was falling apart because of the pressure we found ourselves in. Q. The words: "Not for being found out, but because I have inflicted this on you." Inflicted what on her? A. The pressure of our relationship. Q. That is the best you can do, is it? A. Yes." I do not believe any of those answers, and the fact that they were given at all is yet another matter seriously detrimental to the defendant's credit. 50 I note that this document refers to two specific payments from the Westpac facility, of $10,000 to CoePlan Pty Ltd, and of another $10,000 to cover earthworks part payment, which were "support payments". When the defendant was cross-examined about that phrase, the evidence was: "Q. I said, are you agreeing that Miss Bennet lent you $110,000, you said "yes support payments"? A. Yes. Q. So the 'support payments' to you means 'lent'? A. Well, yes, okay." He retracted that concession almost immediately, but in my view it was a correct concession. 51 That acknowledgement is inconsistent with the defendant's case that "the only amount discussed between myself and the plaintiff was the said amount of $90,000". 52 The defendant repeatedly suggested in evidence that he and the plaintiff were involved in a "joint venture" concerning 'Summer Leaves'. In a loose and colloquial sense that was true – they had plans about the way in which they would develop the property together, and eventually live there. However, the only legally binding joint venture which related to the property was that which had been entered between the defendant, his mother, and Mr Rhodin's son. 53 Nor do I accept that the conversations recounted in paras [15] and [17] above were ones concerning which there was no intention to enter legal relations. The topic of the conversations was an important one to both of them. It was the type of topic – provision by one to the other of a large sum of money – concerning which it is not at all unusual for parties to intend to enter legal relations. While they were intending to marry, each had his or her own property, and each had a child from a previous marriage. There is nothing unusual in parties so situated making a legally binding agreement about their financial dealings one with the other. The substance of the conversations deals, with precision, with all the elements involved in an agreement for loan of money – it is characterised as a "loan", a time for repayment is stipulated, and those extra amounts beyond repayment of the principal which the defendant undertakes an obligation to pay are identified. While there was imprecision at that stage about the precise amount to be lent, agreement was reached on a mechanism by which loans would be made, namely by the plaintiff paying the development expenses as they were incurred. Once the amount of the Westpac loan was known, to both plaintiff and defendant, they thereafter proceeded on the basis that that was money which could be drawn upon pursuant to the agreement. The fact of the amount of the Westpac loan facility, and the parties' conduct thereafter, provided certainty as to the upper limit which the plaintiff had agreed to advance. The terms arrived at in those conversations, and in what was done following on from them, differ in substance from the agreement executed in April only in that the agreement executed in April made provision for the plaintiff to have security over 'Summer Leaves'. 54 The defendant submitted that there was no consideration for the giving of that security. On both occasions the April document was executed the plaintiff made clear that unless the defendant signed it she would not lend him any more money, and once he had signed it, she did indeed lend him more money. That provides adequate consideration for the agreement. Quantum of the Plaintiff's Claim 55 A subcategory of the amounts which the plaintiff claims to be entitled to, as payments made from the money obtained from Westpac, is as follows: Item Date Amount (a) 10/1/03 $19,390.00 Amount paid to the National Australia Bank on behalf of Wadley Holdings. (b) 16/1/03 $10,000.00 CoePlan – firm retained by defendant to lodge development application. (c) 16/1/03 $275.00 Brorson Valuations – for valuing of plaintiff's property in order to obtain Westpac loan. (d) 16/1/03 $1,189.00 Cunningham & Adam solicitors – paid to solicitors in relation to the discharging of the Wadley Holdings debt to the NAB and the financing of the Westpac loan (e) 18/1/03 $90,000.00 Phillips Dean Brickwood – firm retained by defendant to assist in relation to development application. (f) 18/1/03 $5,178.00 Peter Roberts Motors – repairs to defendant's car (g) 28/1/03 $2,344.79 UFJ Finance – Jeep repayments (h) 31/1/03 $101.08 KP & DC Machinery – oil for defendant's tractor (i) 19/2/03 $509.65 Hunter Rural – farm machinery ordered by defendant. (j) 22/2/03 $390.00 Payment made at defendant's request at Avalon Beach. (k) 23/2/03 $377.30 Newport Mirage – payment at defendant's request for accommodation expenses. (l) 4/3/03 $463.40 Registration/CTP – registration of Jeep. (m) 5/3/03 $235.20 Peter Roberts Motors – repairs to Jeep. (n) 5/3/03 $10,000.00 Doug Bourke – payment for road works on defendant's property (o) 28/1/03 $220.00 diesel fuel for defendant's tractor (p) 1/4/03 $54.00 Mascot parking expenses. (q) 1/4/03 $704.00 Virgin Blue – airline tickets. (r) 5/4/03 $1,151.05 Telstra – defendant's mobile telephone bill (s) 12/5/03 $200.00 Wadley Holdings – payment made on behalf of defendant at his request. (t) 12/5/03 $200.00 Peter Roberts Motors – deposit on new Jeep. (u) 20/5/03 $323.50 Barker Lodge – defendant's accommodation expenses in Sydney. (v) 22/5/03 $130.00 Defendant's expenses whilst at Barker Lodge. (w) 25/7/03 $2,283.37 Turnbull Hill solicitors – legal fees incurred by plaintiff in relation to obtaining advice regarding her rights and obligations concerning the Westpac loan. (x) 10/1/03 $1,149.00 Westpac Bank charges on settlement Total $146,868.34 56 Some of these items require further explanation. In October 2001 the defendant said to the plaintiff: "I need a car to get about so that I can organise the Summer Leaves development. I can arrange finance for the purchase of a vehicle if you will agree to obtain a loan in your name. I will make all the repayments." The plaintiff said she was prepared to do that. On 26 October 2001 the defendant filled out a finance application form relating to a Jeep motor vehicle, which the plaintiff signed. The defendant took delivery of the Jeep in November 2001, after the plaintiff had entered into a commercial hire purchase agreement with UFJ Finance Australia Limited relating to it. While the plaintiff drove the Jeep occasionally, it was usually garaged at 'Summer Leaves', where the defendant continued to live with his mother. The defendant made some of the repayments relating to the Jeep, but not all of them. At some date not well established by the evidence, it was repossessed, but was somehow salvaged, perhaps by the defendant paying out the arrears and expenses, and came to be in the defendant's custody again. It was repossessed for a second time and sold. There was a shortfall on the sale, which resulted in the plaintiff owing the finance company $12,340.70. She paid that sum off by small amounts, until she refinanced the Westpac loan, when she was able to pay off the entire balance owing. A payment to the financier of the Jeep is part of the total of $146,868.34 at para [55] above (item (g)). The payment to the finance company following repossession is part of the $40,363.37 listed at para [60] below (item (viii)). Various items for registration, third party insurance, and repairs of the Jeep are also included in the plaintiff's claim (items (f), (l) and (m) in para [55] above. I accept the plaintiff's evidence that before each of items (f), (g), (l) and (m) were paid, the defendant asked her to make the payment, and to charge it to the Westpac loan. 57 Concerning each of items (h), (i), (j), (k), (n), (o), (p), (q), (s), (t), (u) and (v) in this list the plaintiff has given evidence the substance of which is that the defendant asked her to make the payment, and to charge it to the Westpac loan. It was submitted for the defendant that there was considerable improbability about the same sort of conversation occurring so many times between the plaintiff and the defendant, particularly when they were planning to marry. However, the plaintiff was not shaken from her evidence on this topic in cross-examination. As well, the payments were made over a period of time. Further, the situation which the defendant was in was that he was repeatedly asking the plaintiff to pay for quite small expenses, when he knew that she was a widow with a handicapped child, who would be providing him the money in consequence of having mortgaged her home. It does not strike me as improbable that a man who wished to preserve an appearance of decency would offer to repay. Particularly is that so when the defendant described how he saw his role in his relationship with the plaintiff as that of "the intended provider". Some of the items related to travel and accommodation when the plaintiff and defendant went away together, but even in relation to those payments the defendant offered to pay. One trip was in connection with a boat the defendant wanted to buy, another in connection with a truck and gooseneck the defendant wanted to buy. The plaintiff was asked in cross-examination: "Q. Did it create some tension between you and Mr Goodwin that you would have this sort of conversation before any moneys were paid? A. No, not at all. Q. No? A. Not at all because it was at his, he always promised to repay it. He was the one who actually would be the one to say: "Could you charge this to the loan account? I will repay it. I'll pay you back."" Q. Always? A. Always. Q. Any payment he requested you to make? A. Absolutely. Q. Even if you ended up with part of the benefit of the payment? A. Yes, because I could not afford to do things like that. Q. Sorry? A. I could not afford to do things like that, so he always clarified that it would be repaid because it was too much for me to be concerned with." I accept that evidence of the plaintiff. 58 Item (b) was an amount which the plaintiff paid pursuant to the defendant's instructions. Item (r) is an item which was the defendant's responsibility under the agreement referred to in para [11] above. It was paid after the defendant requested the plaintiff to pay it from the Westpac loan money, and said she would be repaid. All the other items have a clear and direct connection with the obtaining of the loan. 59 Each of the items (a) to (x) inclusive in para [55] above is an item which falls within the scope of the Loan Agreement. 60 After the loan agreement was signed, the plaintiff claims to have made various loans to the defendant, made up as follows: (i) Loans from Account No. 1 $13,111.00 (ii) Loans from Account No. 2 $7,236.37 (iii) Loans from Account No. 3 $1,656.37 (iv) Loans from Account No. 4 $4,271.64 (v) Cash payments $420.80 (vi) Visa card payments $947.49 (vii) Payments dishonoured cheques $379.00 (viii) Finance company payment for repossessed Jeep 12,340.70 Total $40,363.37 61 At the time the plaintiff filed her Statement of Claim, she also claimed to be entitled to an amount of $1,904.29, which was the amount of certain Telstra bills which she had paid, minus an amount which she had recovered by selling certain cattle of the defendant. Closer attention to the accounting during the course of the trial has resulted in the plaintiff no longer claiming that additional amount, and conceding she owes a credit to the defendant by reference to the amount of the Telstra bills, minus the amount received from cattle sales. 62 The plaintiff had four different bank accounts. The one she refers to as "Account No. 1" is a Business Cheque Plus Account at Westpac, Maitland. The account she refers to as "Account No. 2" is a Cash Management Account at Westpac, Maitland. The account she refers to as "Account No. 3" is a Classic Plus Account at Westpac. The account she refers to as "Account No. 4" is a Streamline Account with the Commonwealth Bank. It is amounts paid from those accounts, to or for the benefit of the defendant, which make up items (i) to (iv) inclusive in para [60] above. 63 Each of those accounts was operated with both a chequebook, and a keycard. The defendant was not authorised to sign cheques on any of the accounts, and did not ordinarily have possession of a keycard relating to any of the accounts. However, from time to time the plaintiff would give the defendant a keycard relating to one or other of the accounts, and he would use it to withdraw money. I accept that, on each occasion when the plaintiff first gave the keycard relating to each of the four accounts to the defendant, she said to him words to the effect of: "any payments you make from this account you will have to repay. They will have to be treated as part of the loan money and I want them repaid when you pay out the loan.", and the defendant agreed to that. 64 Always, when the defendant had made a withdrawal from one of those accounts, he gave the keycard back to the plaintiff, together with vouchers relating to the withdrawal he had made using it. When the use he had made of the keycard was by making a withdrawal of cash from a bank or building society, the voucher which he gave back was the voucher generated by the automatic teller machine from which the cash had been withdrawn. When the keycard had been used to pay a retailer or supplier of services, he always handed over the type of voucher generated by the machine at the premises of the retailer or service supplier through which the plaintiff's account was debited using the keycard, and sometimes also included a cash register docket issued by that retailer or service provider. Sometimes, but not always, those cash register dockets itemised the goods or services which had been provided. The evidence includes the bank statements showing the various debits which the plaintiff claims being made to her various accounts, and each of the vouchers which the defendant gave to her in relation to the items claimed. 65 The amount which the plaintiff claims as cash payments (item (v) in para [60] above) are amounts where the plaintiff spent cash at the defendant's request. Concerning those amounts, the plaintiff has provided an itemised list, with each item on the list supported by a tax invoice. There are ten individual items claimed for in total, over the period 30 January 2003 to 26 November 2003. The plaintiff gives evidence that concerning each of those expenses, prior to incurring the expense the defendant asked for her to pay for it, and charge it to the loan account, to which she agreed. I accept that evidence. 66 The items which the plaintiff claims as "Visa card payments" (item (vi) in para [60] above) comprise seven items, over the period 14 January 2003 to 31 March 2003. She gives evidence that, concerning each of those items, the defendant likewise asked her to pay for the amount, and charge it to the loan, to which she agreed. I accept that evidence. The payments on the Visa card are each vouched with a voucher from the retailer or service provider concerned, which shows the transaction being charged to a Visa card, and at least some of those items are shown as appearing on a statement of the plaintiff's Visa card. The documentary proof on this head of claim is not particularly impressive when considered by itself, but when coupled with the plaintiff's evidence which I accept, it is sufficient to discharge the onus of proof. It follows that each of items (i) to (vi) in para [60] above is an item to which the Loan Agreement applies. 67 Item (vii) in para [60] above is not completely made out by the evidence. The evidence establishes that an amount of only $297 was paid in dishonour fees to Telstra. 68 There is no evidence of any specific request for the defendant to pay those dishonour fees (whether from the Westpac loan account or otherwise), or of any promise that he would reimburse them. However, they are fees which were incurred as a consequence of the breach by the defendant of his obligation to pay all of the plaintiff's Telstra phone bills. The Loan Agreement is quite imprecise about the way in which money will be borrowed pursuant to it. The expression "borrow money" can cover a situation where 'A' actually receives money from 'B' with an obligation to repay it, the situation where 'B' discharges an obligation of 'A's at 'A's request, and also the situation where 'B' carries out some other action which gives rise to an obligation for 'A' to make good expense or loss which 'B' suffers. In the context of the present Loan Agreement, I see no reason why examples of all three types of transaction should not fall within the scope of Loan Agreement. In my view, any dishonour fees which the plaintiff paid as part of a Telstra bill, would fall within the scope of the Loan Agreement. 69 I mention that I am uncertain whether this item of dishonour fees has been caught up in the agreement which has been arrived at between the parties concerning the quantum of the off-set between Telstra bills and cattle sale proceeds. If it has been caught up in that agreement, it would be double-counting to allow it again. 70 Item (viii) in para [60] is also a payment which the plaintiff made without any specific request from the defendant, and without any specific promise on his part to repay it. However, the need for her to make the payment arose because of the defendant's breach of his obligation to meet all repayments concerning the Jeep. In my view, that payment also falls within the scope of the Loan Agreement. 71 To this day, the defendant has not paid a cent towards repayment of the principal, or payment of any interest, concerning the plaintiff's loan from Westpac. The Defendant's Admissions on Quantum 72 Paragraph 28 of the Statement of Claim contains a summary of the quantum of the plaintiff's claim. It starts out by showing the three amounts – $143,731.47 (being most, but not all, of the amounts identified in para [55] above), $40,363.37 (being the amount identified in para [60] above), and $1,904.29 (being the amount identified in para [61] above) – which the plaintiff claimed at the time the Statement of Claim was filed. It then totals those amounts, to $185,999.13. From that amount, it then set out various credits which the plaintiff allows, derives a balance of the principal amount of her claim by subtracting those credits from $185,999.13, and then calculates interest on that amount of principal to come to a net amount of her claim. 73 At the conclusion of the defendant's cross-examination the following occurred: "Q. Could I just show you the copy of the statement of claim, paragraph 28. I will tick the amount I am referring to. That is before credits are given, less interest (shown)? A. Right. Q. You have been aware that is the extent of Miss Bennett's claim from the time - at least the time that statement of claim was prepared and served? A. Yes." 74 The defendant was then cross-examined about the part of his document quoted at para [47] above which, referring to the Loan Agreement, said: "This document secured your financial assistance against myself and the 'Summerleaves' property." The cross-examination continued: "Q. What do you mean by the expression "financial assistance"? A. What it says, it was part of our project to develop Summer Leaves into a horse stud. Q. What do you mean by "financial assistance"? A. Providing $90,000. Q. She provided a great deal more than that? A. Yes I know. Q. She provided according to her claim 185,000, with the potential to provide $196.000? A. Um. Q. You acknowledge that she provided you with $185,000? A. To be reconciled against what I provided. Q. Well subject to it being reconciled against what you provided, you agree that she provided you with $185,000, do you not? A. Yes Q. And do you agree that that was financial assistance? A. Yes. Q. In terms of the second sentence which begins "This document"? A. Yes. Q. And you agree that the document, that is the loan agreement, secured that financial assistance? A. Um. Q. Is that right? A. Yes." 75 After dealing with some other matters, the cross-examiner then returned to the topic: "Q. And you agree that as of quarter to one today, you have been provided by her with a full explanation and reconciliation amounting to $185,000? A. Yes, I have yet to reconcile my side of the affairs." 76 Those concessions in cross-examination suffice to provide an independent ground for accepting very nearly all of the plaintiff's case of the gross amount of the quantum which she now claims. The case as presented at trial added items (s) to (w) inclusive, of those listed in para [55] above, to those which had been identified in the Statement Claim, so the defendant's concession in cross-examination is not enough to provide that independent ground for items (s) to (w). Apart from item (vi) in para [60] above, the plaintiff's claim on quantum is also made out independently of the defendant's concession. Insofar as the defendant's concession went too far by allowing all of the amount claimed in item (vi) in para [60] above, I will not act on the defendant's concession. 77 The defendant's Defence did not assert any set-off or other reason to reduce the quantum of the plaintiff's claim by reference to what he described as "my side of the affairs". The defendant's cross-claim asserts a set off by virtue only of the plaintiff having converted the defendant's spreader and tractor, and by virtue of the plaintiff having executed a deed on 24 December 2004 which resulted in her having an obligation to credit $7,500 against her claim. 78 Cross-examination was not the first time the defendant acknowledged an obligation to pay to the plaintiff the amount he had received from the Westpac loan. In April 2004 the plaintiff was served with a Statement Claim from Westpac, which sought possession of her property because repayments had not been made on the loan. Before she was served with the Statement Claim she had various discussions with the defendant concerning the loan repayments, and he had said: "I am looking after the Westpac loan. It will be alright." After she was served with the Statement of Claim, she had a conversation with the defendant, and he arranged for her to meet a solicitor in Sydney. The defendant told her that that solicitor would liaise with the bank and that he (the defendant) would pay out the loan. He did not perform that promise, and the plaintiff has now refinanced the loan. 79 The evidence establishes that the plaintiff spent part of the money raised from the Westpac loan on tutor's fees for her son, totalling of the order of $2,000. As well, she spent some of the money in buying some electrical appliances. However, her making that type of expenditure from the $196,000 borrowed from Westpac is consistent with her making a claim, in the quantum she does, against the defendant. 80 It is now common ground that the plaintiff must give credit, against the gross amount of $184,094.84 which she has established, for the amount of $1,132 which she received back from Mr Tong (para [28] above), for an amount of $133 which is now agreed to be the amount by which the proceeds of sale of the defendant's cattle exceeded the amount of the Telstra bills (para [61] above), and also for an amount of $7,500 which the defendant paid to the plaintiff in December 2004 as the price of her consent to a rearrangement of the mortgages on 'Summer Leaves'. As well, it is accepted that the plaintiff has converted a spreader, tractor and accessories of the defendant by selling them and keeping the proceeds. The plaintiff offers a credit of the amount she actually received on sale of those items. The defendant asserts she sold them for less than their true value, and in consequence he is entitled to a greater credit than she offers. That question will be the subject of a separate hearing, fixed for 19 July 2005, unless the parties can resolve their differences concerning that matter before 19 July 2005. 81 Concerning the sale of the spreader, the plaintiff signed a statutory declaration that she was the unencumbered owner. That statement was false. In submission, the solicitor for the defendant relied upon this as a defence of unclean hands. That defence had not been pleaded. No application to amend the Defence was made. The circumstances of her signing the statutory declaration were not explored in evidence. In those circumstances I decline to consider the submission. I mention, however, that on the principles which govern a defence of unclean hands, it does not seem to be a defence with particularly bright prospects as an answer to the whole of the plaintiff's claim: Black Uhlans Inc v NSW Crime Commission [2002] NSWSC 1060 at [157] – [183]. 82 The defendant contends that a case of this kind should not be in the Equity court at all. I do not agree. While many aspects of the case are of a type suitable for trial in the District Court, one of the plaintiff's prayers for relief is an order for sale of 'Summer Leaves'. That is relief which only this Court can give. 83 In principle, as between the plaintiff and the defendant it would be appropriate to make an order for sale of 'Summer Leaves', to enforce the amount of the debt owing under the Loan Agreement. That would include the various principal amounts which I have here held are recoverable under it, interest which has accrued under it, and any enforcement expenses which have accrued under it and have not already been claimed as part of the amounts which I have held are recoverable. However, it is not only the plaintiff and defendant who have an interest in 'Summer Leaves'. The plaintiff's mother, and the mortgagees of the property, should also be heard about whether it is appropriate to enforce, by order of sale, the debt which is owing by the defendant to the plaintiff. 84 As quantum cannot be established until the hearing on 19 July 2005 has taken place, and interest calculations have been carried out, and as it will be necessary to give the defendant's mother and the mortgagees an opportunity to be heard before a decision is made about whether an order for sale is actually made, it is not appropriate to make any orders at this stage. ********** 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. 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