Babscott Pty Ltd (In Liquidation) v Sharron Ruth Rosenberg [2013] NSWSC 889

Supreme Court New South Wales

Medium Neutral Citation: Babscott Pty Ltd (In Liquidation) v Sharron Ruth Rosenberg [2013] NSWSC 889 Hearing dates: 17 - 18, 21 June 2013 Decision date: 04 July 2013 Jurisdiction: Common Law Before: Barr AJ Decision: 1. Verdict for the defendant 2. Order the plaintiff to pay the defendant's costs. Catchwords: CONTRACT - undisclosed principal Legislation Cited: Evidence Act 1995 Cases Cited: Siu v Eastern Insurance Co. Ltd. [1994] 2 A.C. 199 Category: Principal judgment Parties: Babscott Pty Ltd (In Liquidation) (Plaintiff) Sharron Ruth Rosenberg (Defendant) Representation: Counsel: A W Smith (Plaintiff) S Lipp (Defendant) Solicitors: Jones King Lawyers (Plaintiff) Robinson Legal (Defendant) File Number(s): 2012/241810

Judgment 1By its statement of claim filed on 3 August 2012 the plaintiff, Babscott Pty Ltd (In Liquidation), sues the defendant, Sharron Ruth Rosenberg, for $1,000,000.00 as repayment of a loan, together with interest and costs. It pleads that it lent the money to the defendant on 27 February 2007. 2The defendant denies that there was any loan from the plaintiff to herself. She says that she had a loan agreement with a director of the defendant, Scott Higginbotham, and pleads that any money paid to her was by Mr Higginbotham and not by the plaintiff. She denies that the plaintiff advanced $1,000,000.00 to her on 27 February 2007. 3In its reply the plaintiff adopts the defendant's admission that she entered a loan agreement with Mr Higginbotham and pleads that when Mr Higginbotham entered into the loan agreement he did so as the agent of his undisclosed principal the plaintiff. 4Mr Scott Higginbotham was the sole shareholder and director of Babscott Pty Ltd. He died on 23 November 2010. On 25 May 2011 Stephen Wesley Hathway was appointed joint and several liquidator of the company. He is now the sole liquidator. He is a director of SV Partners (NSW) Pty Ltd (SV) which conducts a specialist insolvency and accountancy practice. It keeps records of the administration of the plaintiff. Mr Hathway produced documents from those records. So did Ms Mali Thaggard, a senior manager of SV. The plaintiff's case depends on documents so produced. 5On 12 April 2005 Mr Higginbotham made a written application on behalf of the plaintiff to the Commonwealth Bank of Australia (CBA) to borrow $500,000.00. A copy is exhibited at pp 30-42 to Mr Hathway's affidavit of 25 March 2013. Mr Higginbotham signed the application as director of the plaintiff. Particulars were handwritten on at least seven pages of the application form. Almost every such entry was made in capital letters. The word BABSCOTT, as part of the plaintiff's name, was written no fewer than eight times. The handwriting, distributed over almost all the 23 pages of the document, appears to have been made by the one hand. The signature of Mr Higginbotham appears five times on the document, always in conjunction with the handwriting I have described. 6On 15 April 2005 CBA wrote to the plaintiff acknowledging the receipt of the application and attaching a 4-page document for completion and signature so that CBA could register the anticipated charge. Four such pages were received into evidence, being pp 056-059 of an exhibit to the affidavit of Ms Thaggard. All the pages contained handwriting in capital letters, similar to the handwriting on the loan application form, in conjunction with four further signatures of Mr Higginbotham. 7I have considered the subject-matter of the forms, the fact that the plaintiff was the applicant and that Mr Higginbotham was its sole director. I am satisfied that all the handwriting I have described was written by the one person. I am of the opinion that that person was Mr Higginbotham. A peculiar feature of the handwriting is that whenever the word BABSCOTT appears the last two letters are joined by the use of a single cross-stroke, thus: π. 8On p 15 of the loan application form the CBA stated: When you withdraw funds from your loan account we will pay you by Direct Credit to your Bank Account. Provision followed for the insertion of particulars. In the same hand there were these entries - Bank Name Commonwealth Branch Tamworth Bank State Branch (BSB) No 062-602 Account Number 10XXXXX7 Account Name BABSCOTT PTY LTD 9The plaintiff did not take up the facility until February 2007. In a document called Margin Loan Statement, issued by the Bank in February 2007, this entry appears - 23 Feb 2007 Loan Advance 1,000,000.00 10An Investment Loan Statement issued by the Bank contained an interest summary for the period 4 May 2005 to 13 May 2013. Like the last mentioned document it recorded a loan of $1,000,000.00 on 23 February 2007. 11A document produced by the defendant shows that she maintained an account at the National Australia Bank. It is exhibit MT6 to Ms Thaggard's affidavit. It shows that the sum of $1,000,000.00 was credited to that account on 27 February 2007. The entry bears these details - Internet Banking Transaction History Rtgs(CBA 000936) Mr Scott Higginbothan (sic) Tamworth 2340