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Bryant v Quinn [2022] NSWCA 163 (26 August 2022)

Supreme Court of New South Wales - Court of Appeal

Bryant v Quinn [2022] NSWCA 163 (26 August 2022)

Last Updated: 26 August 2022

Case Name:	Bryant v Quinn
Medium Neutral Citation:	[2022] NSWCA 163
Hearing Date(s):	19 April 2022
Date of Orders:	26 August 2022
Decision Date:	26 August 2022
Before:	Ward P at [1]; White JA at [124]; Brereton JA at [167]
Decision:	1. Allow the appeal in relation to ground 1. 2. Set aside Order 1 of the orders made by Taylor SC DCJ on 13 September 2021 insofar as it requires that the appellant (Ms Susan Bryant) pay to the respondent (Mr Terence Quinn) the sum of $50,729.24 (see the calculations at [93] of his Honour’s reasons). 3. Remit to the District Court for re-hearing the claim by the respondent (the plaintiff in District Court proceedings 2019/298560) for recovery of payments made by the respondent towards the appellant’s legal costs of the Supreme Court Proceedings involving a dispute between the appellant and her grandmother. 4. Set aside Order 2 of the orders made by Taylor SC DCJ on 13 September 2021 and in lieu thereof order each party to bear her and his own costs of the proceeding at first instance (noting that the costs of any further proceedings in the District Court on the remittal be borne as directed by the District Court). 5. Order the respondent to pay 50% of the appellant’s costs of the appeal. 6. Grant liberty to the parties to apply to my Associate to refer the matter for Court-annexed mediation of the remaining issues in dispute.
Catchwords:	PERSONAL PROPERTY — Gifts — Conditional gifts — Where the respondent advanced moneys to the appellant to assist in the payment of legal fees and the payment of stamp duty — Whether moneys were advanced by way of loan or unconditional gift — Where primary judge held that certain moneys advanced by way of conditional gift — Where conditional gift not pleaded APPEALS — From finding of fact — Credibility of witnesses
Legislation Cited:	Limitation Act 1969 (NSW), s 14 Uniform Civil Procedure Rules 2005 (NSW), rr 14.7, 14.28, 51.53(1), Pt 14
Cases Cited:	Alexander v Vane [1836] EngR 5; (1836) 1 M&W 512; 150 ER 537 Argyll Park Thoroughbreds Pty Ltd v Glen Pacific Pty Ltd [1993] FCA 300; (1993) 11 ACSR 1 Banque Commerciale SA En Liquidation v Akhil Holdings Ltd (1990) 169 CLR 279; [1990] HCA 11 Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334; [1999] HCA 9 Benn v State of New South Wales [2016] NSWCA 314 Bruce v Odhams Press Limited [1936] 1 KB 697 Chaudhary v Chaudhary  [2017] NSWCA 222  Ciaglia v Ciaglia [2010] NSWSC 341 CSR Ltd v Della Maddalena (2006) 224 ALR 1; [2006] HCA 1 Dare v Pulham (1982) 148 CLR 658; [1982] HCA 70 Dranichnikov v Minister for Immigration and Multicultural Affairs (2003) 77 ALJR 1088; [2003] HCA 26 Fox v Percy (2003) 214 CLR 118; [2003] HCA 22 Gray v Gray (2004) 12 BPR 22,755; [2004] NSWCA 408 In re Vandervell’s Trusts (No 2) [1974] Ch 269 Ingot Capital Investments Pty Limited v Macquarie Equity Capital Markets Limited (2008) 73 NSWLR 653; [2008] NSWCA 206 Ingot Capital Investments Pty Limited v Macquarie Equity Capital Markets (No 6) (2007) 63 ACSR 1; [2007] NSWSC 124 Lumbers v W Cook Builders Pty Ltd (In liq) (2008) 232 CLR 635 ; [2008] HCA 27 Nobarani v Mariconte (2018) 265 CLR 236; [2018] HCA 36 O3 Capital Pty Ltd v WY Properties Pty Ltd (2016) 49 WAR 517; [2016] WASCA 82 Oikos Construction Pty Ltd t/as Lars Fischer Construction v Ostin & Anor (No. 2) [2021] NSWCA 98 Paynter v Williams [1833] EngR 186; (1833) 1 C&M 809; 149 ER 626 Pinson v Lloyds and National Provincial Foreign Bank Limited [1941] 2 KB 72 Quinn v Bryant [2021] NSWDC 570 Segal v Waverly Council (2005) 64 NSWLR 177; [2005] NSWCA 310 Vines v Australian Securities and Investments Commission (2007) 62 ACSR 1; [2007] NSWCA 75 Young v Queensland Trustees Ltd (1956) 99 CLR 560; [1956] HCA 51
Texts Cited:	E Bullen & S M Leake, Bullen & Leake’s Precedents of Pleadings 3 ed (1868) Steven & Sons, London
Category:	Principal judgment
Parties:	Susan Bryant (Appellant) Terence Quinn (Respondent)
Representation:	Counsel: A Moutasallem (Appellant) P Wallis (Respondent) Solicitors: Hancock Alldis & Roskov (Appellant) Pryor Tzannes & Wallis (Respondent)
File Number(s):	2021/00286249
Publication Restriction:	Nil
Decision under appeal:
Court or Tribunal:	District Court of New South Wales
Jurisdiction:	Common Law Division
Citation:	[2021] NSWDC 570
Date of Decision:	13 September 2021
Before:	Taylor DCJ
File Number(s):	2019/00298560

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

HEADNOTE

[This headnote is not to be read as part of the judgment]

The appellant in this proceeding is the respondent’s niece. From at least 2011, the appellant was involved in a legal dispute with her maternal grandmother (the respondent’s mother) with respect to a property then owned by the appellant’s grandmother in Blakehurst, New South Wales. The appellant commenced proceedings in the Supreme Court of New South Wales in relation to the dispute with her grandmother. The respondent advanced moneys to the appellant to assist with the payment of legal costs arising from that litigation (in the sum of $55,000), and the costs of defending a subsequent appeal by the grandmother (in the sum of $5,692.57). The appellant was successful in those proceedings, both at first instance and on appeal. In September 2013, two payments totalling over $460,000 were paid into the appellant’s solicitor’s trust account; and in October 2013, the appellant received the sum of $446,405.75, following the verdict in her favour.

In 2013, the appellant acquired a property in Riverwood, New South Wales. The respondent advanced $34,660 to the appellant to assist with the payment of stamp duty on that property. In proceedings commenced by the respondent in the District Court of New South Wales, the respondent (the plaintiff below) alleged that the moneys in question were advanced to the appellant by way of loans made pursuant to oral loan agreements. The appellant alleged that the moneys were advanced by way of unconditional gift.

At first instance, the primary judge held that the payment of $55,000 towards the appellant’s legal fees was a conditional gift, made on the condition that the moneys be used up in the litigation. That condition not being satisfied, the primary judge held that the appellant was liable to repay the sum to the respondent. The primary judge further held that the payment of $5,692.57 towards the costs of the appeal, and the payment of $34,660 towards the stamp duty on the Riverwood Property were loans, and that the appellant was therefore liable to repay those sums to the respondent. The appellant had raised limitations defences in respect of the amounts held to be loans.

On appeal to this Court, there were three principal issues:

(1) Whether the primary judge erred in finding that the $55,000 was advanced to the appellant as a conditional gift, insofar as this was not pleaded by the parties;

(2) Whether the primary judge erred in finding that the $5,692.57 was advanced to the appellant by way of loan; and

(3) Whether the primary judge erred in finding that the $34,660 was advanced to the appellant by way of loan.

The Court (per Ward P, White JA, Brereton JA) held, allowing the appeal in part:

As to issue (1):

1. The primary judge erred in finding that the moneys were advanced as a conditional gift, in the absence of pleadings to that effect. The appellant was entitled to proceed on the basis of the pleadings, in which the respondent alleged that the moneys were recoverable pursuant to the oral loan agreement (and pursuant to which the moneys were repayable on demand). The fact that the appellant contended that the moneys were given to her as a gift does not give rise to any issue of a conditional gift. Any conditions attaching to the alleged gift would be required to be pleaded. Deciding the issue on the basis of unpleaded claims, over the objection of the appellant, caused prejudice to the appellant, insofar as the appellant was not provided with an opportunity meaningfully to respond to the claim.

Ingot Capital Investments Pty Limited v Macquarie Equity Capital Markets Limited (2008) 73 NSWLR 653; [2008] NSWCA 206, applied.

As to issues (2) and (3):

1. The primary judge did not err in finding that the moneys were advanced by way of loan. In order to succeed on issue (2) and (3), the appellant was required to demonstrate that credibility assessments arrived at by the primary judge were glaringly improbable or contrary to compelling inferences. The appellant failed to satisfy this onus.

Fox v Percy (2003) 214 CLR 118; [2003] HCA 22, applied.

JUDGMENT

1. WARD P: In this matter the appellant (Ms Susan Bryant) appeals from a decision in the District Court (Quinn v Bryant [2021] NSWDC 570) in which judgment was awarded in favour of the respondent to the appeal (the plaintiff below) (Mr Terence Quinn) in the sum of $108,853.10, inclusive of interest.

Background

2. The appellant is the niece of the respondent. From at least 2011, the appellant was involved in a dispute with her grandmother (the respondent’s mother) in relation to a property owned by the grandmother in Blakehurst (Blakehurst Property) (apparently involving a failed arrangement for the appellant to care for the respondent’s mother in return for a share of a property purchased by the respondent’s mother – see the summary of the dispute as set out in the primary judgment at [5]-[14]).
3. The appellant commenced proceedings in the Supreme Court in relation to her dispute with the respondent’s mother (the Supreme Court Proceedings). The respondent seems to have sided with the appellant in relation to that dispute (certainly, he acknowledges as much in the submissions made by him on this appeal), which may well explain the respondent’s willingness to assist the appellant to meet her legal costs of those proceedings as he did (see below). The dispute between the appellant and the respondent largely relates to the respondent’s claim that the moneys he provided to the appellant towards her legal costs of those proceedings and of the subsequent appeal (in total $60,592.57) were by way of a loan, whereas the appellant contended that the moneys were a gift.
4. The appellant was successful in the Supreme Court Proceedings against her grandmother, and in defending the subsequent appeal; and the appellant obtained costs orders in her favour. In September 2013, two payments totalling over $460,000 were paid into the appellant’s solicitor’s trust account and on 8 October 2013 the appellant received the sum of $446,405.75, following the judgment in her favour.
5. The appellant then acquired a property in Riverwood (the Riverwood Property), and the respondent provided to the appellant in 2013 a bank cheque for $34,660 for the stamp duty payable in respect of the purchase by the appellant of that property.
6. Payment of the costs orders in both the Supreme Court Proceedings and the appeal proceedings was received by the appellant in late 2016 or 2017.
7. The dispute that arose between the appellant and respondent, which led to the District Court proceedings the subject of the present appeal, was as to whether the appellant was obliged to refund to the respondent the moneys that he had provided in respect of her legal costs and stamp duty.
8. The respondent sued the appellant in the District Court (the statement of claim being filed on 24 September 2019 and an amended statement of claim being filed on 27 May 2020) for the repayment of moneys provided by him to the appellant between 14 February 2011 and 24 October 2013, alleging that he made a series of loans to the appellant (totalling the sum of $103,352.57) in the relevant period. There was no dispute that the moneys claimed had been provided (save for a sum of $8,000 that was not admitted by the appellant, but which was found by the primary judge to have been paid by the respondent on about 3 May 2013).
9. The respondent alleged that the moneys were advanced by way of loan, pursuant to an oral loan agreement entered into by the parties in or about late 2010 to early 2011, which oral loan agreement was said to be the subject of two subsequent alleged oral amendments (the first in or about September 2013 and the second in or about August 2014). In the respondent’s affidavit evidence, the agreement was asserted to be to the effect that the respondent would lend the money to the appellant and that the appellant would then pay the respondent back if she was successful in the proceedings. (The respondent’s oral evidence in cross-examination was problematic, to say the least, in establishing any such agreement.)
10. The appellant denied the alleged loan agreement and maintained that the moneys provided to her were a gift (i.e., an unconditional gift).
11. There was no claim by the respondent based on restitution or unjust enrichment arising out of the retention by the appellant of moneys recovered by way of her legal costs in the earlier successful proceedings involving her grandmother in circumstances where the respondent had funded at least a proportion of those costs. (The irony of the present proceeding is that the appellant seems to have recognised that, had the claim in the District Court been one for restitution based on unjust enrichment, then she may have been hard pressed to defend such a claim – yet the consequence of success in this appeal may well be that on a remittal of the matter there could be just such a claim raised against her.)
12. There was also a dispute in the District Court proceeding as to whether the respondent’s claim for return of the moneys (apart from the sum of $34,660 paid for the stamp duty on the Riverwood Property in 2013) was statute-barred pursuant to the provisions of the Limitation Act 1969 (NSW) (Limitation Act) on the basis that, as the loan agreement was pleaded as being one payable on demand, the cause of action accrued the moment the funds were received by the borrower.
13. The primary judge largely upheld the respondent’s claims (see below) albeit that his Honour did so (at least in relation to the amounts paid towards legal costs) on the basis that the moneys were provided by way of a conditional gift (as opposed to by way of a loan, as the respondent contended, or by way of an unconditional gift, as the appellant contended). The nub of the appellant’s present complaint is that such a claim (i.e., a claim that there was a conditional gift) was not pleaded; and that to determine the proceedings and grant relief on a claim that was not pleaded amounted to a denial of procedural fairness.

Primary judgment

14. At [19], the primary judge noted that the moneys claimed by the respondent fell into the following groups: first, moneys paid to the solicitors acting for the appellant in the Supreme Court Proceedings and appeal therefrom ($55,000 paid between 14 February 2011 and 31 May 2011 in relation to the costs of the Supreme Court Proceedings; and a further payment of $5,692.57 by way of cheque provided on 12 June 2012 to cover the costs of the appeal against the Supreme Court decision); second, a claimed $8,000 loan which the respondent said that he paid to the appellant on 3 May 2013; and, third, the sum of $34,660 which the respondent paid on or about 24 October 2013 which covered the stamp duty for the purchase of the Riverwood Property.
15. The primary judge’s findings depended in large part on his Honour’s assessment of the credibility of the parties to the dispute, and the various other witnesses in the proceedings. It is apposite to note his Honour’s findings in this regard at the outset.
16. As to the credit of the respondent, the primary judge said (at [20]) that:

Mr Quinn was not always a careful witness. He was at times hasty with his answers without giving careful regard to the questions. As a result, on some occasions his evidence was inconsistent with his affidavit. He did on occasions make concessions, including that his recollection of long ago conversations was unlikely to be accurate. Whilst I accepted him to be honest, his occasional lack of care with his evidence, and his difficulty recalling matters long ago, and some oral evidence inconsistent with his affidavit, meant that it was difficult to rely on his evidence.

17. By contrast, as to the appellant, the primary judge said (at [21]) that:

Ms Bryant appeared to be a more careful witness, and not argumentative, but as indicated, some of her answers conflicted with the documentary evidence, particularly on amounts of money. If demeanour were determinative, I might have been inclined to favour Ms Bryant. But Ms Bryant’s credit was damaged by her erroneous statements to Mr Quinn with regard to her financial position at the time of the Riverwood purchase, where she asserted without explanation that she told Mr Quinn she had received $360,000 from the Blakehurst property when she had received over $446,000.

18. The primary judge considered (at [22] of the primary judgment) the appellant’s evidence that she did not seek assistance from the respondent, in the context of the payments received by the appellant from the respondent in June 2012, May 2013 and October 2013 and the appellant’s own evidence as to her statement to the respondent in June 2012 that she was “struggling to cope emotionally and financially” and that her lawyer had asked her for money and she was “struggling to pay it”. His Honour further considered the precise amount of the cheque then provided by the respondent (from which his Honour inferred that the appellant must also have informed the respondent of the precise amount that she was to pay her solicitors), and the statement which the appellant deposed she had made to the respondent about her inability to afford the stamp duty in respect of the Riverwood Property and misstatement as to the amount she had received from the Blakehurst Property. In light of the foregoing, his Honour concluded (at [24]) that the appellant’s evidence (about not asking for money or discussing her financial affairs, and receiving only $360,000 from the sale of the Blakehurst Property) appeared disingenuous and misleading. At [25], the primary judge said he found the appellant’s evidence about the timing of her conversation about an inability to pay the stamp duty (that is, prior to any proposed price being determined, offered or agreed, or the liability for or amount of stamp duty being determined) unlikely.
19. At [26], his Honour concluded that in those circumstances (and in the absence of any explanation for those statements) he was not inclined to regard the appellant as a witness of credit.
20. As to the evidence of the appellant’s family members (which corroborated the appellant’s account to a degree), the primary judge said (at [83]) that:

This evidence from Ms Bryant’s family has similarities and differences, but none are especially confirmatory or troubling. There is a consistency of Mr Quinn saying he would give Ms Bryant the stamp duty when they were at the open house. However, the effect of the passage of time, the circumstance that any recollection was of family members overhearing a conversation between Ms Bryant and Mr Quinn which they were neither directly involved nor aware of the details of the stamp duty, that the account each gives does not expressly preclude there being a loan, the corrupting effect of likely conversations about the subject matter in the intervening years, and their common interest in supporting their mother or partner, Ms Bryant, all leaves this evidence less than compelling.

21. The primary judge found (at [38]) that the evidence did not establish a loan vis-à-vis the moneys paid by the respondent to the appellant’s solicitor in respect of the appellant’s legal costs of the Supreme Court Proceedings, referring to the observation of Young CJ in Eq, as his Honour then was, in Gray v Gray (2004) 12 BPR 22,755; [2004] NSWCA 408 at [16] to the effect that “there is no presumption of an obligation to repay from the fact of payment to a stranger and that the burden of proof in such circumstances lay upon the plaintiff to establish that the money was lent and not given”.
22. That is not surprising, given the respondent’s evidence in cross-examination (at T 39.12-48), that, at the time he paid the money to the solicitors he had not informed the appellant that he was expecting any of the money to be repaid to him (rather, that came later, once the proceedings had finished); that there was not an agreement at that time that the appellant would pay him back following the determination of the proceedings, but rather that such an agreement arose after the appellant was successful in those proceedings; and that the appellant never said things like “yes, I will pay you back” (but had instead simply nodded and grunted). The respondent said that the appellant did not make any promises regarding the repayment of the putative loans in relation to the costs of the appeal and the stamp duty at the time at which they were made, but rather that the appellant simply nodded and grunted in the course of those conversations too (see at T 40.1-7). When re-examined about the content of that discussion, the respondent said (at T 57.41-43) “[w]ell, just like I said. After I knew we’d won, I just said, ‘great, we’ll get our money’”.
23. Nor, however, did the primary judge find that the moneys were paid as an outright or unconditional gift. Rather, having referred to the decision in Chaudhary v Chaudhary  [2017] NSWCA 222 , the primary judge found (at [41]) that the appropriate characterisation of the moneys provided by the respondent towards the appellant’s legal costs was that this was by way of a conditional gift, the condition being that the funds “be used up in the litigation”. The primary judge noted that, in the ultimate result, that did not occur (as the funds were ultimately recovered, or largely recovered, some years later when the costs orders were met) and said that ‘[l]ike in Chaudhary, those unexpended funds provided by Mr Quinn belonged to Mr Quinn and he remained entitled to them when they were recovered”.
24. His Honour said at [42] that:

Had the litigation not been successful, Mr Quinn would have had no claim against Ms Bryant in respect of the fees of Mr Tsolakis that he paid. When the action was successful, and an order for payment of Ms Bryant’s costs was obtained, the funds refunded belonged to Mr Quinn because the condition of expenditure in the litigation was unfulfilled.

25. Thus, the primary judge found that the sum of $55,000 advanced to the appellant’s solicitor for the legal costs in the Supreme Court Proceedings was recoverable by the respondent from the time that the appellant recovered payment for her costs in those proceedings.
26. As to the sum of $5,692.57 paid in respect of the appeal costs, the primary judge found that this was advanced by way of a loan; that the obligation to repay the loan arose when the appellant received funds from the litigation; and that this sum was therefore also recoverable from the appellant (see at [61] of the primary judgment).
27. Third, the primary judge accepted that the advance of $8,000 was a loan (see at [65] of the primary judgment), as asserted by the respondent, but held that (as a loan repayable on demand) it was statute-barred and not recoverable by the respondent.
28. Fourth, the primary judge held that the sum of $34,660 paid by the respondent for the appellant’s stamp duty on the Riverwood Property was advanced by way of a loan repayable on demand; and was recoverable by the respondent (see at [92]-[93] of the primary judgment).
29. Accordingly, the primary judge awarded the respondent (see at [94] and [97]): $50,729.24 on account of the costs of the solicitors for the Supreme Court Proceedings paid to Mr Tsolakis, the appellant’s solicitor (that amount being adjusted to reflect the proportion of legal costs recovered by the appellant from her grandmother as a result of the costs order made in those proceedings); $5,692.57 on account of the costs of the appeal; and (see at [96]) $34,660 on account of the stamp duty that the respondent had paid.

Appeal

30. The appellant appeals on the following grounds:

1. The trial judge at [51] erred in awarding the respondent plaintiff $50,729.24 on the basis of a conditional gift.

Particulars
a. The respondent did not plead a conditional gift but rather pleaded his case as being one founded on a breach of loan agreement/s payable on demand.
b. No application was made by the respondent to amend his pleadings.
c. The trial judge erred in failing to consider the appellant’s submissions that the respondent ought to be confined to his pleadings and that the case ought to be decided on the basis upon which the parties pleaded their case.
d. The trial judge decided the case on a basis outside the pleadings and particulars of the parties
e. The trial judge granted relief not available on the pleadings.
f. The trial judge denied the appellant procedural fairness.
g. The findings were otherwise plainly wrong in that the evidence did not establish the existence of any conditional gift.
h. Otherwise, that aspect of the respondent’s claim was statute barred by reason of the Limitation Act 1969.

2. The trial judge erred at [62] in awarding the respondent $5,692.57.

Particulars
a. The trial judge erred in finding that money was advanced by way of a loan.
b. The finding was plainly wrong.
c. Otherwise, that aspect of the respondent’s claim was statute barred by reason of the Limitation Act 1969.

3. The trial judge erred at [96] in awarding the respondent $34,060.00.

Particulars
a. The trial judge erred in finding that money was advanced by way of a loan.
b. The finding was plainly wrong.

31. Ground 1 thus relates to the sum of $55,000 advanced in respect of the appellant’s legal costs at first instance in the Supreme Court Proceedings; ground 2 to the costs of the appeal; and ground 3 to the stamp duty.

Ground 1 – $55,000 paid to the appellant’s solicitors

Appellant’s submissions as to ground 1

32. Although a variety of particulars are put forward in respect of ground 1, in essence the complaint by the appellant is that the trial judge granted the respondent relief which was not founded on the pleadings, and thus the appellant says she was denied procedural fairness. There is also a complaint that the primary judge failed to consider the submission made at the hearing to the effect that the respondent should be confined to his pleadings.
33. The appellant emphasises that there was no pleading by the respondent of a claim based on a conditional gift; that there was no evidence to that effect; and that, up until the final submissions (and after the evidence had closed), the respondent’s case in relation to the moneys paid to the appellant’s solicitors was one founded on a breach of an oral loan agreement (referring to the amended statement of claim filed on 27 May 2020 at [1]-[4]). The appellant emphasises that the respondent pleaded that the loan was “repayable on demand” and says that, on the pleaded case, the respondent’s claim in relation to the $55,000 would have been out of time.
34. The appellant points to the affidavit evidence of the respondent which dealt with alleged oral conversations that gave rise to the alleged loan agreements (see at [20], [21] and [24] of the respondent’s affidavit sworn 8 October 2020), noting that (at [20]) the respondent gave evidence of having a conversation with the appellant to the effect that he said “Susan, I will pay the remaining solicitor’s fees for this case and you can repay me if you are successful which I think you will be” in response to which the respondent deposed that the appellant said “OK and thank you”; which evidence was undermined by the evidence in cross-examination to which I have referred above. As to the appellant’s affidavit evidence, it is said that this was directed towards addressing the alleged conversations that were said to have given rise to the loan agreement or its alleged amendments; and that there was no reason by the time the trial commenced on 24 February 2021 to suspect that the respondent’s claim for the $55,000 paid to Mr Tsolakis was founded on a claim of conditional gift.
35. The appellant says that, had she (the appellant) been on notice of such a claim, one matter that the appellant’s evidence could have dealt with was the issue of detrimental reliance on the assumption that the gift was unconditional (such as evidence to the effect that, given the failure of the respondent to do anything for so many years following the payment of the moneys, the appellant was left with the impression that the gift was “completely and unequivocally unconditional” and that, in reliance on that conduct, the appellant made financial decisions to her detriment). Reference was made in this context to the fact that the appellant had sold the Riverwood Property and purchased another property.
36. The appellant notes that, at the commencement of the trial, the respondent’s counsel confirmed that the respondent’s case was one founded on a loan agreement payable on demand (see at T 1.33-40); and that it was not suggested to any of the witnesses in cross-examination (on 24 February 2021) that the respondent had made a conditional gift of the moneys. It is submitted that it is clear from the transcript of the hearing below that the objective of the appellant’s cross-examination of the respondent was to undermine his evidence about the purported conversations to which the respondent deposed in his affidavit, and that he relied upon to assert the existence of a loan agreement (those conversations being denied by the appellant).
37. The issue of a conditional gift was not raised until closing submissions. Those submissions commenced on 25 February 2021, and the appellant points out that in the context of discussion of the respondent’s case, the primary judge referred to questions of equitable entitlement, raising the issue of unjust enrichment (the appellant referring by way of example to exchanges at T 106.21-34, T 108.1-22, and T 110.13ff). At that point the appellant’s counsel complained that the matters to which the primary judge had there referred (such as an argument as to an equitable entitlement or a claim for unjust enrichment) had not been pleaded (see at T 108.15-22) and submitted that (the evidence having closed) it would be unfair for the appellant to be required to meet such a case.
38. The appellant emphasises that the respondent did not make an application at that stage further to amend his amended statement of claim to raise any such claim (the respondent here says that it was not necessary to do so, having regard to the matter as pleaded and the evidence that had emerged – see the respondent’s submissions below).
39. On 25 February 2021, the proceedings were adjourned to allow the parties to prepare written submissions with the benefit of the transcript. The appellant notes that the respondent’s subsequent submissions dated 26 March 2021 made no reference to conditional gift (rather, the respondent maintained that there was an agreement arrived at as to the repayment of the moneys, albeit one reached at the end of the Supreme Court Proceedings, not at the time the moneys were advanced – reference being made to [3.1.2]-[3.1.3] of the respondent’s submissions below).
40. There were then final oral submissions on 8 April 2021, in which the primary judge (having put to counsel for the respondent that there was never a loan arrangement agreed in respect of the moneys paid to Mr Tsolakis for the costs, to which counsel for the respondent did not seemingly demur) raised the proposition that the money paid to the solicitors was in the nature of a conditional gift, referring in this context to the decision in Chaudhary v Chaudhary (see T 3.27-49, and T 4.3-38 (8.4.21)) and suggesting that there seemed to be a number of possibilities (unconditional gift or conditional gift or loan).
41. The appellant notes that the transcript records that the respondent then adopted the suggestion of the conditional gift (see at T 5.1-20; T 6.20-29 (8.4.21)). The appellant emphasises that at no point had the respondent pleaded a conditional gift; and it is said that the notion of a conditional gift caught the appellant by surprise. The appellant’s counsel argued that the respondent ought to be confined to his pleadings.
42. The appellant here relies on the pleading requirements in the District Court (see Pt 14 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR)), in particular the requirement that a party must plead its case in such a manner as will enable the opposite party to identify the case he or she is required to meet and so that it is not embarrassing (see UCPR r 14.28); and points to the accepted function of pleadings and particulars (as articulated by the Court in Dare v Pulham (1982) 148 CLR 658; [1982] HCA 70 (Dare v Pulham) at 664).
43. The appellant emphasises the observation by the High Court in Dare v Pulham at 664 that “[a]part from cases where the parties choose to disregard the pleadings and to fight the case on issues chosen at the trial, the relief which may be granted to a party must be founded on the pleadings”; and that the circumstances in which a case may be decided on a basis different from that disclosed by the pleadings are limited to those in which the parties have deliberately chosen some different basis for the determination of their respective rights and liabilities (here citing Banque Commerciale SA En Liquidation v Akhil Holdings Ltd (1990) 169 CLR 279; [1990] HCA 11 (Banque Commerciale) at 286-287 per Mason CJ and Gaudron J). Reference is also made in this context to Benn v State of New South Wales [2016] NSWCA 314 (Benn v State of New South Wales) at [62]-[63] per Gleeson JA.
44. The appellant says that there can be no suggestion that the parties chose to disregard the pleadings and fight the case on the issues chosen at trial, asserting that “every forensic decision” made on behalf of the appellant in the preparation of the evidence and the running of the trial up until the notion of conditional gift was raised by the trial judge was geared towards defeating the respondent’s case of an asserted loan agreement that arose from oral conversations and referring in this context to the ambit of the cross-examination of the respondent being to discredit the respondent’s evidence of the asserted oral agreement. The appellant points to many submissions made to the primary judge to the effect that the respondent should be confined to his pleadings.
45. The appellant argues that, by the time the concept of conditional gift was raised (after the evidence had closed and the parties were well into submissions), it was far too late for the appellant to be able fairly to deal with the new issue raised by the primary judge; and that the appellant was thus deprived of the opportunity to: prepare her evidence in chief with a view to addressing the conditional gift claim; cross-examine the respondent on the new issue of conditional gift; elicit further evidence that could undermine that suggestion; and consider any amendment to her defence.
46. It is thus submitted that the primary judge erred in deciding this aspect of the claim outside of the pleaded case and that, in so doing, the primary judge denied the appellant procedural fairness in the circumstances of this case. The appellant emphasises that there was never an amendment sought by the respondent to the amended statement of claim to plead the issue of a conditional gift and says that, until the primary judge delivered judgment, it was not clear to her that the primary judge was going to allow the respondent to depart from its pleaded case. It is submitted that no opportunity was afforded to the appellant to argue that any amendment should not be made; seek an adjournment; or consider an application to amend the defence or reopen the evidence.
47. As to the complaint in relation to failure by the primary judge to consider the submissions made by the appellant that the respondent ought to be confined to his pleadings (see for example at T 31.50; T 32.1-50; T 33.8-50; T 36.15-50; T 51.21-40; (8.4.21) and in particular the submission at T 36), the appellant says that nowhere in the judgment (or transcript) does the primary judge address this submission; notwithstanding that the primary judge acknowledged that the pleading point was made (see at T 50.40; (8.4.21)). It is submitted that such a failure amounts to an error of law at least in the form of a failure to afford natural justice (Dranichnikov v Minister for Immigration and Multicultural Affairs (2003) 77 ALJR 1088; [2003] HCA 26 (Dranichnikov) at [24] per Gummow and Callinan JJ) and a failure to consider an aspect of the appellant’s claim (Segal v Waverly Council (2005) 64 NSWLR 177; [2005] NSWCA 310 at [43] per Tobias JA (Beazley JA (as Her Excellency then was) and Basten JA agreeing).
48. The appellant submits that the proper course of action would have been for the primary judge to decide the issue of whether the respondent ought to be confined to the pleadings before delivery of judgment; which would have allowed the appellant to consider whether she would seek an adjournment, amend her defence or make an application to reopen the evidence.
49. If the appellant’s arguments in relation to ground 1 are upheld, then the appellant says that the matter should be remitted for retrial. If grounds 1(a)-(f) are not upheld, then the appellant presses the contention in ground 1(g) that the primary judge erred in finding that the evidence established that the $55,000 was paid by the respondent as a conditional gift.
50. The appellant says: first, that the evidence did not establish objectively that the gift of $55,000 had conditions attached to it; and second, that there was no evidence from the respondent that the $55,000 was a gift of any kind.
51. As to the first of those matters, the appellant argues that Chaudhary v Chaudhary is distinguishable on its facts, noting that that case involved the provision of funds provided by a father for a deposit for the purchase of a property and that at [99] Emmett AJA (with whom Payne JA and Sackville AJA agreed) held that “the conditional nature of the gift allowed the character of the payment to change by reason of subsequent agreement between the parties”. It was there held that the character of the relevant payment changed by the parties’ agreement that a particular sum paid be treated as part of the loan, such that the amount of the deposit was treated as part of the loan in that case. The appellant says that in Chaudhary there was evidence that the character of the payment of the deposit had changed by agreement; whereas there is no such evidence in the present matter.
52. Moreover, it is noted that in Chaudhary v Chaudhary Emmett AJA (with whom Payne JA and Sackville AJA agreed) (at [100]) made clear that whether or not the advances were to be properly characterised as loans or gifts depended upon a consideration of what was said and done (by the donor – although in submissions the appellant suggests that it is by reference to what is said and done by the donee) and is not to be determined by reference to any uncommunicated subjective state of mind about which inferences may or may not be drawn.
53. The appellant submits that in the present case the objective evidence does not establish a conditional gift. The appellant says that the evidence clearly established that the respondent never discussed his expectation of being repaid following the successful conclusion of the Supreme Court Proceedings and the recovery of any costs order; and that this was conceded by the respondent in oral and written submissions. The appellant says that the respondent’s evidence from T 39 onwards made it clear that, not only did he not discuss an expectation of being paid but also, the appellant never said she would be repaying the respondent any money (but rather nodded or grunted in response to the respondent). It is submitted that, given the predicament that the appellant was left in as a result of the matters that came before the Supreme Court Proceedings with her grandmother (matters for which the respondent felt responsible), it is said that there was a perfectly plausible reason why the gift by the respondent would have been made as an unconditional gift.
54. The appellant contends that there was never any evidence of an objective meeting of the minds with respect to any agreed conditions to any gift; and points to the length of time it took for the respondent to commence legal proceedings to recover the moneys as being not consistent with there being a conditional gift.
55. It is submitted that, absent any evidence from the respondent that the $55,000 paid to the appellant’s solicitor was a conditional gift, it was not open to the primary judge to conclude that he had made a conditional gift.

Respondent’s submissions as to ground 1

56. As to grounds 1(a)-(f), the respondent argues that the authorities on which the appellant relies deal with proceedings where a party has attempted to claim relief outside the bounds of its claim (Banque Commerciale; Benn v State of New South Wales); or where a party has failed to address a claim articulated by the other party (Dranichnikov); and that the present is not such a case.
57. The respondent says that he pleaded his case as a loan or series of loans noting that the appellant, by her defence, denied that the advances were loans, asserted that they were gifts, and said that, even if they were loans, recovery of those loans was statute barred. The respondent draws from this that the question of the advances being gifts (subject to conditions or otherwise) was clearly in issue between the parties; and he argues that the appellant cannot now complain that the primary judge made a finding in respect of part of the moneys advanced (in line with the appellant’s defence) that the advances were gifts (merely because his Honour also found that those advances were conditional gifts). It is said that the issue of whether the advances were loans or gifts was one of the two principal live issues (together with the issue of limitations if the advances were found to be loans) between the parties.
58. The respondent further says that the appellant’s submissions misconceive the purpose of pleadings, noting that UCPR r 14.7 provides that pleadings are to contain only a summary of the material facts on which the party relies; and that the inferences of law to be drawn from the pleaded facts need not be stated. The respondent argues, in effect, that having pleaded the relevant facts, it was open to the respondent to “present, in argument, any consequences of which the facts permit” (see In re Vandervell’s Trusts (No 2) [1974] Ch 269 at 321-322 per Lord Denning MR and at 324 per Lawton LJ); and the respondent notes that a submission to that effect was made by him on 8 April 2021.
59. Pausing here, there is a difference between a party being permitted to make submissions as to the legal consequences of the facts as pleaded; and the judge being permitted to deal with the issues in the proceedings beyond those which were pleaded by the parties (without consent or acquiescence by the parties of a departure from the pleadings).
60. The respondent argues that the primary judge made findings that were clearly within the issues pleaded by the parties; and that the appellant cannot claim to be taken by surprise merely because the primary judge found, on the evidence before him, that the legal consequence of the facts as there found was that those advances, while being gifts (as the appellant contended), were gifts subject to conditions.
61. The respondent argues that the evidence given by the parties as to the character of the advances as loans or gifts ought not to have been different had the respondent filed a reply asserting that, if the advances were gifts, they were conditional gifts. The respondent says that the full circumstances of the advances, and details of the conversations that took place in relation thereto, were given by the parties as best they could recall them, and the limited documents relevant to the transactions were in evidence. (This submission fails to take into account the possibility that the appellant could have raised other defences had the issue of a conditional gift been squarely raised on the pleadings; or that the appellant could have filed evidence going to the issue of detrimental reliance as the appellant here contends it would have sought to do.)
62. The respondent notes that the primary judge raised the issue of the advances being conditional gifts during oral submissions on 8 April 2021 (being the final day of the hearing) and says that counsel for the appellant had an opportunity to address the issue based on the evidence before the Court. (That rather begs the question in circumstances where the appellant’s counsel had made clear his objection to the issue being determined outside of the pleadings.)
63. The respondent says that he did not try to run a case or call evidence that was outside the case he pleaded. Rather, he says that both parties put on their cases and that the primary judge found, on the basis of all the evidence presented to his Honour, that most of the advances made were loans as the respondent submitted (the $5,692.57 for the contribution to legal costs of the appeal by the appellant of her Supreme Court Proceedings, the advance of $8,000 made on 3 May 2013 and the stamp duty of $34,660), but that the advances of moneys in relation to the legal costs of the Supreme Court Proceedings were a gift that was conditional.
64. The respondent says that it is incorrect for the appellant to assert that the primary judge erred when he “granted the respondent relief not founded on the pleadings”; rather, that the requirement is that the trial judge grant relief based on his findings as to the evidence and the legal consequences that flow from that evidence. The respondent appears to accept that he could not call evidence outside his pleaded case but argues that it was open to the primary judge to make his own findings as to the whole of the evidence and to determine the legal result that follows from those findings.
65. The respondent says that the transcript of 8 April 2021 demonstrates that the primary judge considered (without having come to a concluded view) that on the evidence one of the legal consequences possibly flowing from the advance of funds was that the advance was not a loan, nor was it an outright gift but, rather, a conditional gift – the condition being that if the legal proceedings were successful, and the costs were recovered, the moneys advanced would be repaid. It is submitted that the appellant could hardly have objected if the primary judge had found that the advance was a loan but a loan subject to conditions that arose from a comprehensive examination of the evidence; and says that it would be commonplace for a judge to find, at the end of the hearing, a term of a contract that neither the plaintiff nor the defendant had pleaded.
66. As to the appellant’s submission (at [31]) that the appellant was surprised by the suggestion of a conditional gift that was raised by the primary judge only during oral submissions on 8 April 2021 (and was disadvantaged in the running of her case by not being able to prepare her evidence in chief to meet a claim for a conditional gift, not being able to cross-examine as to a conditional gift, nor being in a position to call further evidence), the respondent says that this contention is implausible. The respondent says that the parties had each presented all the evidence at their disposal (and within their respective pleaded cases) as to the circumstances of the advance of moneys for the legal fees; and the primary judge had found a third alternative legal consequence to flow from the evidence as he found it, that lay between the case of the respondent (that the advances were a loan) and the case of the appellant (that the advances were a gift), namely, that the advances were a conditional gift.
67. Similarly, it is said by the respondent that the appellant’s submission (at [33]) based on the fact that the respondent did not seek to amend his pleading (so as to allow the appellant to argue that the amendment ought not to be allowed and to seek an adjournment to call further evidence), is also misconceived. The respondent maintains that he never sought to call evidence about any factual matters that went beyond his pleaded case; and argues that no amendment to the amended statement of claim was required, as the facts had not changed. The respondent says that he was prepared to accept the consequences that the primary judge was contemplating might flow from the facts he found on the evidence that was presented (i.e., that there was a conditional gift).
68. As to the complaint by the appellant (at [35]) that the primary judge fails in the transcript or the judgment to address the argument that the respondent had to be confined to his pleadings, the respondent says that the primary judge raised the issue that the advances may be a conditional gift similar to that referred to in Chaudhary v Chaudhary at an early stage of the oral submissions on 8 April 2021 and went on to deal with the submission of the appellant (at T 32.29-50; (8.04.21)), when his Honour questioned counsel for the appellant as to the particulars in the pleading (see at [2](i) of the amended statement of claim) and said:

... Whatever that means precisely, it encompasses, perhaps, more than conversation, but does this point, Mr Moutasallem, mean that if the plaintiff alleges there’s a loan payable on demand, you say there’s a gift, and the Court, on the evidence, for example, thinks that it was a loan repayable only in a certain circumstance, say, for example, success on the proceedings, recovery of costs, or, to use different terminology, a gift, but repayable if the money is recovered from the other party, you say the proper order in that situation is the plaintiff hasn’t proved it’s an unconditional loan? Whatever the defendant has or hasn’t proved, the plaintiff should recover nothing. Is that the point?

If, for example, I concluded, say, to put it at its simplest, which it’s not quite - can’t be quite this, but that Mr Quinn paid the money, and he was only to recover it if the money was received back as a result of the success in the litigation, you say if that’s the end result, that’s not alleged. So that’s not available. So why, then, I might ask, does the Court have evidence of the amounts of moneys recovered pursuant to the costs order? Because whether the moneys were recovered or not could have been the subject of objection as irrelevant to the issues on the pleading on that analysis, but they’re put in not over objection but, in fact, put in by you.

69. The respondent thus maintains that there was no failure to consider an aspect of the appellant’s case and no failure to afford the appellant natural justice.
70. As to the appellant’s submissions that the evidence did not establish a conditional gift, the respondent says that it was open to the primary judge to find that there was a conditional gift of the advances used to assist with the legal costs of the Supreme Court Proceedings.
71. Insofar as the appellant contends that the case is distinguishable from Chaudhary v Chaudhary, the respondent points to the finding by the primary judge (at [41]) that it was the purpose for which the moneys were advanced that led to the characterisation of them as a conditional gift and to his Honour’s reasons at [42]-[43].
72. The respondent says that the submission that the evidence was insufficient to establish that the moneys advanced for the legal costs were a conditional gift must fail.

Determination as to ground 1

73. As to the pleading complaint (i.e., that the primary judge erred in determining the claim for the $55,000 on a basis not pleaded – i.e., on the basis of a conditional gift), I consider that this is made good.
74. It is well recognised that there is a distinction between pleadings and particulars (see Scott LJ in Bruce v Odhams Press Limited [1936] 1 KB 697 at 712-713 per Scott LJ; Pinson v Lloyds and National Provincial Foreign Bank Limited [1941] 2 KB 72 at 75-76 per Scott LJ); and that the requirement for pleading is that the statement of claim state the material facts (and need not plead the conclusions of law to be drawn from those facts, if established). However, it is also well known that the issues to be determined at hearing are those as framed by the pleadings and that departure from the case as pleaded is not permitted unless the parties have consented or acquiesced in such a departure (see Ingot Capital Investments Pty Limited v Macquarie Equity Capital Markets Limited (2008) 73 NSWLR 653; [2008] NSWCA 206 (Ingot NSWCA) at [424] per Ipp JA; see also the decision at first instance: Ingot Capital Investments Pty Limited v Macquarie Equity Capital Markets (No 6) (2007) 63 ACSR 1; [2007] NSWSC 124 (Ingot) per McDougall J).
75. In Ingot, McDougall J implicitly recognised that in some circumstances the parties might, by their conduct of the case, acquiesce in the widening of the pleaded case. There, however, various of the counsel for the various defendants had repeatedly stated that they were responding to the plaintiff’s pleaded case from which the plaintiff ought not be allowed to depart. The same can be said of the present case. Counsel for the appellant made plain on a number of occasions that the appellant objected to a departure from the pleaded case (and that the pleaded case did not raise a claim for equitable relief or relief on the basis of unjust enrichment or the like). That included complaint in the course of final closing submissions on 8 April 2021 to the claim in effect being recast as a claim for a conditional gift.
76. On appeal, in Ingot NSWCA, Ipp JA considered the authorities and principles relevant to whether a party would be allowed at trial to depart from its pleaded case, noting that there may be a departure from the pleadings where adherence to them would be unjust or unfair (citing Banque Commerciale at 286-287 per Mason CJ and Gaudron J). Here, however, it is the departure from the pleadings that is said to be unjust or unfair to the appellant.
77. In Banque Commerciale, it was said that, ordinarily, the question of whether the parties have chosen some issue different from that disclosed in the pleadings as the basis for the determination of their respective rights and liabilities is to be answered by inference from the way in which the trial was conducted. It was there accepted that, in a clear case, mere acquiescence by one party in a course adopted by the other will be sufficient to ground such an inference. There was certainly no such acquiescence in the present case.
78. Ipp JA noted in Ingot NSWCA (at [424]) that the rule that, in general, relief is confined to that available on the pleadings secures a party’s right to a basic requirement of procedural fairness; and that, apart from cases where the parties choose to disregard the pleadings and to fight the case on additional issues chosen at the trial, the relief that may be granted to a party must be founded on the pleadings.
79. In Vines v Australian Securities and Investments Commission (2007) 62 ACSR 1; [2007] NSWCA 75 at [57], Spigelman CJ stated the test as being whether the parties “have chosen to fight the case on a different basis”.
80. In the present case, as the issues were framed from the pleadings, the appellant was entitled to proceed on the basis that the respondent was alleging that the moneys were recoverable pursuant to the oral loan agreement that was alleged (and pursuant to which the moneys were repayable on demand). The fact that the appellant contended that the moneys were given to her as a gift does not give rise to any issue of a conditional gift (any more than did the claim based on the alleged loan agreement give rise to an issue that there was a conditional loan). Any conditions attaching to the alleged loan (or conversely the alleged gift) would be required to be pleaded. I do not accept the respondent’s submission that the case as determined by the primary judge was one that was encompassed within the pleaded claim.
81. It is apparent from a review of the transcript that the primary judge was grappling with the seeming injustice inherent in the proposition that the respondent had advanced funds to permit the appellant to meet the legal costs of the Supreme Court Proceedings but had not been reimbursed to the extent that those legal costs were subsequently recovered by the appellant pursuant to the costs orders made in those proceedings. That concern is understandable. However, with respect to the evident concern of the primary judge to resolve the controversy before him having regard to what might be seen to be the overall merits of the case, it is clear that the primary judge impermissibly went beyond the pleaded claim in circumstances where the appellant had staunchly resisted any departure from the pleadings and the respondent had (for whatever reason) chosen not to seek leave to amend his pleaded claim in order to encompass an alternative claim from that which had been pleaded.
82. The fact that the appellant had the opportunity to make submissions as to the issue is not to the point (nor is the fact that the appellant did not seek an adjournment during final closing submissions to address the new case being advanced in argument with the primary judge). The respondent had seemingly made a forensic decision (notwithstanding the difficulties occasioned by his evidence in cross-examination) to rest his case on the pleading as to a loan agreement repayable on demand (the only apparent expansion of that claim being the submission to the effect that the loan agreement was not made until the conclusion of the Supreme Court Proceedings). The acceptance by the respondent in the course of closing submissions of the propositions put by the primary judge as to the concept of a conditional gift as emerging from Chaudhary v Chaudhary was reminiscent of the “enthusiasm of a shipwreck finding an unexpected life-raft on a stormy sea” (to borrow from the words of Kirby J in dissent in Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334; [1999] HCA 9 at [78]).
83. Once it is accepted that the appellant may have chosen to raise other defences had a claim for conditional gift been raised (such as an estoppel based on a change of position arising from the assumption that it was an unconditional gift), there is obvious prejudice to the appellant from the respondent being permitted at the close of the hearing to embrace a claim not properly raised on the pleaded case. While it may well prove to be a Pyrrhic victory for the appellant (if, say, the respondent were now to raise claims based on unjust enrichment or the like, as were debated in the Court below and on this appeal), the position remains that each case must be fought on the issues as framed by the pleadings (absent consent or acquiescence to a departure therefrom – and here there was no such consent nor acquiescence).
84. Therefore, in my opinion ground 1 is made good and this aspect of the matter should be remitted for re-hearing in the District Court.
85. I note that part of the complaints raised in ground 1 is as to the failure of the primary judge to address the objection raised by the appellant to the perceived departure from the pleadings. I do not accept that failure to address a submission orally in the course of argument (i.e., on the transcript) gives rise to a ground of appeal. It was not incumbent on the primary judge to give reasons during the course of argument for matters that might be dealt with in final reasons. The real complaint of the appellant is that, having failed to give some kind of ruling (or advance warning) of an intention to determine the issue otherwise than on the pleadings, the primary judge proceeded to do so. That is amply addressed in the conclusion as to the remaining grounds of appeal in 1(a)-(b) and (d)-(f). Ground 1(c) to my mind adds little to the argument.
86. Nor is it necessary in light of the conclusion reached above (and it would not in my opinion be appropriate, given that the issue may arise in due course on a re-hearing) to consider ground 1(g) of the grounds of appeal.

Ground 2 – $5,692.57 on account of the appeal costs

87. The appellant notes that the evidence with respect to the payment of the sum of $5,692.57 was brief: the appellant deposed in her affidavit that the respondent had handed her a cheque for $5,692.57 in about June 2012 which she used for the appeal costs; the respondent had contemporaneously written on his cheque butt “LOAN” against this payment.
88. The primary judge (at [61]) said that the matter was finely balanced; but concluded that the payment was a loan. The appellant submits that this finding was plainly wrong and is not supported by the respondent’s oral evidence. Reference is made again to the evidence given by the respondent in cross-examination (at T 39ff) to the effect that there was no discussion about the repayment of the moneys paid to the solicitor, including the smaller amount of $5,692.57 in relation to the appeal costs; the respondent’s statement as to the lesser sums (after having said that the appellant never said anything about repayment of money) being “[w]ell, they were proceeding at the time, it was an ongoing loan” (see at T 40.6-7).
89. It is noted that, later in cross-examination (at T 43.10-32) with respect to the $5,692.57 paid towards the appeal costs, there was the following evidence:

Q. I’m going to suggest that at no point did you say, “I’m going to give you this $5,692.57, but I want the money back.”

A. Not at that point, I’d already told her that.

Q. I’m going to suggest to you, at no point did Susan agree to pay back the $5,692.57.

A. At that point, I was lending Susan money all the time. She was running out of money for paying bills and everything else. I was lending her money, the little amounts I lent her, she paid back. But anything over more than $2,000, she never paid back.

Q. Let’s focus on this amount - $5,692.57. Would you agree with me when I say that there was never a conversation to the effect of--

A. I’m agreeing with that, yeah.

Q. And I’m going to say that when she asked for that money, she didn’t say, “Uncle Terry, can you please loan me $5,692.57?”

A. Yes.

Q. There was never a conversation when you gave her the cheque where she said, “Uncle Terry, I will one day repay the $5,692.57.”

A. Susan never, ever said anything like that. But she knew what I had previously said.

90. The appellant further contends that, even if the primary judge did not err in his characterisation of the payment as a loan, the claim for this amount was statute-barred from 12 June 2018 (being six years after the money was paid). It is said (by reference to the above evidence of the respondent in cross-examination) that there was no clear evidence of the repayment terms. The appellant says that the primary judge was wrong to conclude (at [62]) that any obligation of repayment did not arise until the recovery of the funds from litigation. The appellant says that this finding is not consistent with the evidence nor with the manner in which the respondent pleaded his case (as a loan repayable on demand).
91. It is noted that, where a loan agreement contains a stipulation as to repayment that is such as to leave it to subjective determination, incapable of objective determination or is otherwise uncertain, the six-year time limit begins when the money is advanced (the appellant here citing Argyll Park Thoroughbreds Pty Ltd v Glen Pacific Pty Ltd [1993] FCA 300; (1993) 11 ACSR 1 per Drummond J at 4).
92. The appellant submits that the law is clear, namely that if the loan is repayable on demand the cause of action accrues from the date the money is received by the borrower (citing Young v Queensland Trustees Ltd (1956) 99 CLR 560; [1956] HCA 51 at 566 per Dixon CJ, McTiernan and Taylor JJ).

Respondent’s submissions as to ground 2

93. The respondent maintains that the finding that the advance of $5,692.57 was a loan is not plainly wrong, noting that the primary judge reviewed the evidence given by each of the parties and found that the advance was a loan, including by having regard to the contemporaneous note made by the respondent on the cheque butt of “LOAN”. The respondent says that the extract by the appellant from the respondent’s cross-examination (at [44] and [45] of the appellant’s submissions), demonstrates that the respondent’s evidence was that there was “an ongoing loan” and that the matter had been previously discussed between them (“I’d already told her that” – see at T 43.10-12).
94. Similarly, it is submitted that his Honour’s finding that the terms of the loan included that the loan was repayable only when the appellant received funds from the litigation (which occurred on 13 September 2013) was open on the evidence presented.

Determination as to ground 2

95. The circumstances in which findings based on credibility assessments may be found to be erroneous are well established (Fox v Percy (2003) 214 CLR 118; [2003] HCA 22 at [28] per Gleeson CJ, Gummow and Kirby JJ; as further explained by Kirby J in CSR Ltd v Della Maddalena (2006) 224 ALR 1; [2006] HCA 1 at [19]- [21]).
96. Insofar as the submissions on the present appeal effectively seek to revisit the credit findings made by the primary judge or suggest that they, or the conclusions drawn from them, were erroneous, there is nothing in my view to warrant the conclusion that his Honour’s findings were glaringly improbable, contrary to compelling inferences, or inconsistent with incontrovertible evidence nor is there any evidence to support the proposition that there was a misuse of (or failure to use) the advantage his Honour had in assessing the witnesses before him.
97. The complaint made by the appellant is that the primary judge relied on what was written on the cheque butt (by the respondent) as to the characterisation of the payment and submitted that this was reliance on an uncommunicated subjective state of mind that would not be determinative of the issue as to whether or not a loan had been made. However, that was simply one of the factual matters to which his Honour must have had regard. Highly relevant in the present case was his Honour’s assessment of the credit of the witnesses when considering the evidence of the appellant and respondent as to the circumstances in which this amount was advanced. Insofar as the appellant relies upon the respondent’s cross-examination (as extracted in the appellant’s submissions) and submits that this does not support the conclusion that this was a loan or that it was not repayable unless and until there was success in the proceeding (and also points to the uncertainty as to what would objectively be understood by success in the proceeding), I accept that there was little objective contemporaneous evidence. Ultimately, the primary judge accepted the account given by the respondent (albeit one which was not wholly consistent as between his affidavit and oral evidence). However, I am not persuaded that the factual finding (as to the existence of the loan and when it was repayable) has been shown to be plainly wrong. Therefore, in my opinion ground 2 is not made good.

Ground 3 – payment of $34,660 towards stamp duty

Appellant’s submissions as to ground 3

98. The third ground of appeal relates to the finding by the primary judge (at [93]) that the moneys paid in respect of the stamp duty were a loan. The appellant contends that this finding was plainly wrong, being against the weight of the evidence. The appellant argues that: first, the evidence of the respondent on this point was severely undermined during his cross-examination; and second, the evidence of the appellant was corroborated by a number of other family members present at the time of the conversation where the stamp duty was discussed and it is said that there was nothing in the cross-examination of these witnesses that suggested that there was any issue with their reliability or credibility.
99. The appellant says that the “high-water mark” of the respondent’s case with respect to the stamp duty was the evidence to which he deposed at [35] of his affidavit but that the cross-examination of the respondent (at T 39ff, to which I have already referred) exposed a number of difficulties with this account. The appellant says that this oral evidence was completely inconsistent with what is deposed to at [35] of the respondent’s affidavit.
100. Reference is made by the appellant as to the respondent’s cross-examination at T 48.45ff, in which the respondent first said at [35] of his affidavit was half wrong and then said that it was entirely wrong (see T 49.5-27):

Q. You depose to a conversation that you say you had with Susan at para 35. Do you want to read it to yourself?

A. Yes.

Q. That’s a conversation that you say you would have had about six and a half years ago.

A. Once again, it’s hard to remember exactly, but I’ll agree with you.

Q. Would you agree with me when I say that when it comes to your recollection of what was actually said six and a half years ago, you might be mistaken about what you have said?

A. No, I didn’t read it, I’m sorry. Yes, yes. I said that. No, no, I disagree with the granny flat bit of it, because we had already decided - that was one of the reasons why we bought the house in the first place, that it had a granny flat.

Q. So, is this conversation wrong?

A. Well, 50% of it is, yes.

Q. Can you tell the court what 50% of that conversation is wrong?

A. No, I’m sorry. Reading it again, no, none of it’s right.

Q. None of that’s right.

A. No.

HIS HONOUR: I’m sorry, do you say you agree with 35 or you disagree with it?

WITNESS: I disagree with it, your Honour. I’m sorry, I didn’t read it carefully.

MOUTSALLEM

Q. So just so we’re clear, what you’re telling the Court now is p 35 of your of your trial affidavit is wrong.

A. No, I don’t remember saying that in those words, but I’ll accept - I’ll say yes.

Q. No, no, you don’t have to accept something if you don’t want to. Can you go to para 38, please, of your affidavit, which is towards the bottom of the page? Have a read through that. And let me know when you are done.

A. Well, I’ve said it, so I must agree with that.

Q. Well, you don’t have to. I’m going to suggest to you that that conversation did not occur.

A. No, it did, yes it did.

Q. Is it possible that you might be mistaken?

A. No.

101. The appellant says that the above responses of the respondent unequivocally confirm that he understood that he was being questioned about his affidavit evidence at [35]; and that this evidence is fatal to the respondent’s case with respect to the stamp duty loan.
102. The appellant notes that, in response to questions from the primary judge in relation to this issue (at T 52.8-48), the respondent then gave the following evidence:

Q. You were asked about para 35 of that affidavit.

A. Yes.

Q. I think you said that you disagreed with that happening in your evidence. Is that right?

A. Yes.

Q. I just wanted to understand what it is that you say that you didn’t have a conversation or that there are things in this conversation which weren’t said or what is wrong with para 35?

...

Q. And I think you said that you disagreed with that paragraph, and I’m wanting to ask you if you can tell the Court what it is that is wrong with what is recorded there.

A. No, I’m sorry, your Honour. I disagree with Susan’s part, unfortunately. No, I’m sorry. I do agree with that. Yes, I accept what I said.

Q. Sorry?

A. I accept what I said here.

Q. So, are you now saying that everything in 35 you accept?

A. Yes, yes. But I don’t know how I put that in, because Susan never said, “thank you”. I don’t know why I put that in.

Q. So you disagree with the last line of 35, do you?

A. Yes. She never ever said that.

Q. Is that what you are saying? I’m sorry, I’m just trying to understand what you say about para 35.

A. Yes, I’m sorry your Honour, I’ve been a bit vague.

103. The appellant says that the above exchange casts doubt on the reliability of the respondent’s evidence (particularly his affidavit evidence).
104. It is noted that (at [90] of his Honour’s reasons) the primary judge said that he was “compelled to choose between the accounts of Mr Quinn and Ms Bryant”. The appellant says that the situation was not so simple, noting that her evidence as to the gift of the stamp duty was corroborated by the evidence of a number of family members (who it is said gave consistent evidence about seemingly unimportant matters like the presence of other people and where on the property the conversation occurred). The appellant says that the fact that they consistently gave evidence about these matters is highly relevant, in that it added to the credibility of her evidence that there was an important conversation about the gift of stamp duty in relation to the Riverwood Property. The appellant points to the fact that the accounts were not identical; and says that differences in the accounts of these witnesses so many years later would be expected.
105. It is submitted that, to succeed on the stamp duty claim, the respondent must have established that the appellant’s family members all lied, concocted their evidence or otherwise were all coincidentally mistaken about the same matter; and that there was nothing about their evidence that would allow such a conclusion.
106. Referring to [83] of his Honour’s reasons (see as extracted above at [26]), the appellant says that there was nothing in the cross-examination of the evidence of her family members that would allow the trial judge to conclude, as he did, that “the corrupting effect of likely conversations about the subject matter in the intervening years, and their common interest in supporting their mother or partner, Ms Bryant, all leaves this evidence less than compelling”. The appellant says that none of these matters was put to the witnesses in cross-examination; and that there was no evidentiary foundation to allow the primary judge to make such a finding. In particular, it is noted that it was never put to these witnesses that they had discussions about this conversation in the intervening years, nor that they had a common interest in supporting their mother or partner.
107. With respect to the evidence of the alleged stamp duty agreement, the appellant says that there were difficulties accepting the respondent’s version of these conversations. In this regard, it is noted that the respondent conceded that he only had one conversation with the appellant about stamp duty (T 46.37-39), whereas several members of the appellant’s family gave evidence of a conversation about stamp duty where it is said that the respondent offered the money as a gift. It is submitted that it is not possible to discredit all of the appellant’s family members who gave consistent evidence about this critical fact. Second, the appellant says that the respondent’s delay in claiming from her personally the moneys paid with respect to stamp duty (there being no evidence of any demand for any of the money until about 2015 and the statement of claim not being filed until September 2019) supports the appellant’s assertion that she had no expectation of repaying those funds as she had never agreed to repay the money.

Respondent’s submissions as to ground 3

108. In response to the two arguments relied upon by the appellant in asserting that the primary judge was plainly wrong in finding that the moneys advanced for the stamp duty were a loan, the respondent submits as follows.
109. As to the first of the two arguments (i.e., that the evidence of the respondent was undermined in cross-examination), the respondent says that the extract from the transcript of his cross-examination relied upon by the appellant is inconclusive. It is submitted that it shows that the respondent was confused about precisely what was being put to him and who it was alleged had said what; reference being made to the following evidence in that regard (at T 49.36-38):

Q. So just so we’re clear, what you’re telling the Court now is p 35 of your of your trial affidavit is wrong.

A. No, I don’t remember saying that in those words, but I’ll accept - I’ll say yes.

110. The respondent also places emphasis on the statements made by him in cross-examination to the effect that the relevant conversation in [38] of his affidavit did take place (see at T 49.40-50).
111. As to the second of the two arguments raised by the appellant (the corroboration of the appellant’s evidence by family members), the respondent says that the findings made by the primary judge as to the credit of the appellant as a witness would not lightly be set aside, and that, given those findings, the primary judge’s findings as to the facts surrounding the advance of the moneys used to pay the stamp duty are not plainly wrong.
112. The respondent places emphasis on the evidence which inclined the primary judge to find that the appellant was an unreliable witness (namely, the evidence relating to the conversation surrounding the request for payment of the moneys for the stamp duty and when the conversation took place). In particular, reference is made to his Honour’s reasons (at [73]), where his Honour said that the appellant’s evidence concerning the stamp duty transaction was problematic (for the reasons there stated). As to the issue of corroboration by the appellant’s family members, the respondent points to the review by the primary judge at [75]-[83] of the evidence of those family members and his Honour’s conclusion at [83] (as set out at [26] above), which it is said refutes the submission by the appellant that it was necessary for the respondent to have established that the appellant’s family members “all lied, concocted their evidence or otherwise were all coincidentally mistaken about the same matter”.
113. The respondent submits that it was open to the primary judge to make findings that the “corrupting effect of likely conversations about the subject matter in the intervening years, and their common interest in supporting their mother or partner”, meant that the other family members’ evidence was not compelling, simply on the basis of the relationship between the witnesses and the appellant. The respondent argues that, coupled with the other matters referred to in [83] of his Honour’s reasons, the findings of the primary judge were clearly open to his Honour.
114. Further, it is said that the primary judge found (on proper and detailed grounds) that the evidence of the appellant lacked credit. The respondent says that the appellant’s unreliable evidence could not be transformed, by the evidence of the family members, into reliable and credible evidence. Thus, the respondent argues that the finding that the moneys advanced for the stamp duty were a loan was not “plainly wrong”.
115. As to the suggestion that the fact that the respondent made no request for repayment until 2015 is inconsistent with his view that the moneys were to be repaid on a sale of the Riverwood Property and ought to count against him in assessing the character of the advance (as the appellant contends), the respondent notes that this was dealt with by the primary judge at [91] of his Honour’s reasons, in which his Honour noted that the respondent’s “delayed attempts” at recovery of the stamp duty moneys might ordinarily militate against his claim but that the family relationship, his generosity and his ignorance of the details of the appellant’s financial position lessened the adverse impact of this circumstance.

Determination as to ground 3

116. Again, this ground raises a challenge to the factual finding made by the primary judge, which was dependent on his Honour’s assessment of the witnesses (in particular the appellant and respondent, but also the other family members). Much weight is placed by the appellant on the inconsistency in the answers given by the respondent in his cross-examination. However, the primary judge had the advantage of seeing and hearing the respective witnesses, and, relevantly, formed the view that (although the respondent was careless or confused from time to time) the respondent’s account as to the stamp duty was credible (and the other family members’ accounts were less compelling for the reasons there given). It is not correct to say that the respondent’s account could only be accepted if the other family members were shown to have lied or to have concocted their evidence. A judge may accept one version of conflicting evidence without concluding that the other version was dishonest. In saying that he was compelled to choose between the accounts of the appellant and respondent, his Honour was not ignoring or disregarding the fact that other family members had given evidence in support of the appellant’s account, he was clearly indicating that it was a question of which version of events was to be accepted.
117. I am not persuaded that the findings of the primary judge in relation to the payment made in respect of the stamp duty were clearly wrong. Thus, ground 3 is not made good.

Conclusion

118. For the reasons set out above, I consider that the appeal succeeds only on ground 1 and that, in that regard only, the matter should be remitted to the District Court for re-hearing.
119. As to the costs of the proceedings (at first instance, and on appeal), the respondent submitted that if there were to be success by the appellant on part of the appeal, then there should be an order for costs that “reflected the shared spoils ... of the case”. The appellant submitted that, taking into account the fact that the appellant succeeded at first instance on the $8,000 claim, then if there were to be success on grounds 1 and 2, the appropriate order would be for the appellant to recover two-thirds of the costs at first instance and (on the basis that most of the time and written submissions were spent on the appeal on grounds 1 and 2) the appellant should have an order in her favour for the costs of the appeal.
120. On the basis that there has been a mixed success on the appeal, I would propose that the respondent should pay 50% of the appellant’s costs of the appeal.
121. As to the costs of the hearing at first instance (when, on the face of the pleading, in the absence of amendment, it would appear that the appellant should have succeeded in respect of the claim of $55,000, in addition to her success on the claim for $8,000; but where there was approximately just under half of the case on which the respondent rightly succeeded), I propose that there be no order as to costs in respect of the first instance proceedings to date and that costs of further proceedings should be at the discretion of the District Court.
122. Finally, I would simply add that this is yet another unfortunate case of a dispute between family members where the ongoing costs of the dispute are likely to be disproportionate to the amount in issue. In circumstances where there remains in issue the princely sum of $55,000 (which when adjusted by the primary judge for the amount recovered out of the costs orders made in the Supreme Court Proceedings amounted to $50,729.24), and remittal of the proceeding will simply occasion further costs in this matter, I would encourage the parties to consider mediation of the dispute (invoking, if they wish to do so, the procedure for Court-annexed mediation available in the Supreme Court).
123. Accordingly, I would propose the following orders:

(1) Allow the appeal in relation to ground 1.

(2) Set aside Order 1 of the orders made by Taylor SC DCJ on 13 September 2021 insofar as it requires that the appellant (Ms Susan Bryant) pay to the respondent (Mr Terence Quinn) the sum of $50,729.24 (see the calculations at [93] of his Honour’s reasons).

(3) Remit to the District Court for re-hearing the claim by the respondent (the plaintiff in District Court proceedings 2019/298560) for recovery of payments made by the respondent towards the appellant’s legal costs of the Supreme Court Proceedings involving a dispute between the appellant and her grandmother.

(4) Set aside Order 2 of the orders made by Taylor SC DCJ on 13 September 2021 and in lieu thereof order each party to bear her and his own costs of the proceeding at first instance (noting that the costs of any further proceedings in the District Court on the remittal be borne as directed by the District Court).

(5) Order the respondent to pay 50% of the appellant’s costs of the appeal.

(6) Grant liberty to the parties to apply to my Associate to refer the matter for Court-annexed mediation of the remaining issues in dispute.

124. WHITE JA: The appellant, Ms Bryant, appeals from a judgment given against her in the District Court in favour of the respondent, Mr Quinn, in the sum of $108,853.10. That judgment consisted of three sums, together with interest. The three sums for which judgment was given were $50,729.24 with interest from 12 December 2016, $5,692.57 with interest from 25 September 2013, and $34,660 with interest from 24 September 2019.
125. These reasons assume a familiarity with the reasons of Ward P.
126. Ward P, whose reasons for judgment I have had the advantage of reading in draft, would dismiss the appeal in respect of the latter two items. I agree with her Honour’s reasons in respect of those sums. Reluctantly, I am compelled also to agree with her Honour’s reasons and proposed orders in relation to the first claim.
127. Ms Bryant is Mr Quinn’s niece. She was a party to litigation with Mr Quinn’s mother, her grandmother. Mr Quinn considered that she had a good claim and supported her in that litigation. Ms Bryant could not continue to pay her solicitor’s costs. Mr Quinn paid her solicitor’s costs on her behalf. Ms Bryant knew that he was doing so and did not object. She said that she did not know what costs he paid, but did not deny that she knew that he was paying her costs on her behalf. Ms Bryant was successful in her proceedings at first instance and on appeal. Her solicitor recovered costs from her grandmother (represented by the NSW Trustee and Guardian).
128. The judge found that $50,729.24 was the proportion of the litigation costs paid by Mr Quinn to Ms Bryant’s solicitor that were recovered from the NSW Trustee and Guardian (J [44], [45], [94]). Ms Bryant kept those moneys. At trial she contended that the payments Mr Quinn made on her behalf to her solicitor were gifts. The primary judge found that they were conditional gifts, the condition being that the funds be used up in the litigation. That did not occur because the funds were largely recovered. The funds refunded belonged to Mr Quinn because the condition was unfulfilled (J [41]-[42]).
129. Given the judge’s rejection of Ms Bryant’s evidence that the payments were unconditional gifts, this was self-evidently, on the evidence addressed at trial, the just and appropriate result. The cause of action on which judgment was given was a cause of action in restitution, for money paid by the plaintiff for the defendant at her implied request or authority. (A request will generally be implied where the defendant has notice of the payment being made and does not dissent (Bullen & Leake’s Precedents of Pleadings 3 ed, p 42, Paynter v Williams [1833] EngR 186; (1833) 1 C&M 809; 149 ER 626 at 630; Alexander v Vane [1836] EngR 5; (1836) 1 M&W 512; 150 ER 537 at 537-8; Lumbers v W Cook Builders Pty Ltd (In liq) (2008) 232 CLR 635 ; [2008] HCA 27 at [89]; O3 Capital Pty Ltd v WY Properties Pty Ltd (2016) 49 WAR 517; [2016] WASCA 82 at [74]- [78]).
130. However, a claim in restitution was not pleaded. Nor did Mr Wallis of counsel, who appeared for Mr Quinn at trial (and on appeal), advance a submission based on restitution, even in closing submissions after the issue had been flagged by the judge.
131. In relation to this claim, Ms Bryant contends that she was denied procedural fairness. Before a new trial can be ordered, it must appear that some substantial wrong or miscarriage has been occasioned (Uniform Civil Procedure Rules 2005 (NSW) r 51.53(1)).
132. In Nobarani v Mariconte (2018) 265 CLR 236; [2018] HCA 36 the High Court held that, where there is a denial of procedural fairness, there will be a substantial wrong or miscarriage within the meaning of r 51.53(1) if the affected party has been denied the possibility of a successful outcome. The High Court said:

“39. In summary, a power under s 75A(10) to order a new trial arises where a denial of procedural fairness causes some substantial wrong or miscarriage. The denial of procedural fairness will cause a substantial wrong if it deprived the affected person of the possibility of a successful outcome. Unless the other party can show some reason for the exercise of discretion not to order a new trial, the power will be exercised to order a new trial. One reason that might sometimes be sufficient, and upon which the respondent relied, is where no useful result could ensue because a properly conducted trial will not make a difference.”

133. The substance of this part of Mr Quinn’s claim, as pleaded in his amended statement of claim, was that on 14 February 2011, 9 March 2011, 5 April 2011 and 31 May 2011, he advanced four sums totalling $55,000 to Ms Bryant pursuant to a loan agreement to assist her with payment of legal costs and other expenses she incurred. It was He alleged that the loan was repayable on demand.
134. The statement of claim was filed on 24 September 2019, more than six years after the advances. Ms Bryant denied that money was lent. She also pleaded that the claim was statute barred. If the moneys had been advanced by way of loan repayable on demand, the claims would have been statute barred because the cause of action for recovery of the loans would have run from the date of the advances not from the date of demands for repayment (Young v Queensland Trustees Ltd (1956) 99 CLR 560; [1956] HCA 51).
135. Mr Quinn’s affidavits served well before the hearing were inconsistent with his pleading that the loans were repayable on demand. In his affidavit of 8 October 2020 Mr Quinn deposed:

“20. About halfway through the Supreme Court proceedings, Susan approached me advising that she had no money to keep fighting and defending these Supreme Court proceedings. As I had initially raised the idea of Susan becoming my mother's carer and as my mother had told me that she agreed to this arrangement with Susan becoming her carer and for Susan to then eventually receive half the proceeds of the sale of the Blakehurst property, I decided to assist Susan, advising her that I would loan her the funds for the remaining legal costs in these Supreme Court proceedings. I recollect my conversation with Susan at this time to the following effect -

Myself – ‘Susan, I will pay the remaining solicitor's fees for this case and you can repay me if you are successful which I think you will be.’
Susan – ‘OK and thank you.’

I then paid various amounts totalling $55,000 towards Susan's solicitor fees in these Supreme Court proceedings.

Exhibit Folder "TQ1" Tabs 1 to 4 inclusive are copies of my St George Bank Account Statements at this time together with copy of the four (4) cheque butts for the total amount of $55,000 I paid to Tsolakis Solicitors towards legal fees on behalf of Susan.”

136. Mr Quinn repeated the substance of that evidence in his affidavit in reply of 1 February 2021.
137. This evidence was inconsistent with Mr Quinn’s pleaded case but Ms Bryant was on notice that Mr Quinn would assert (if allowed, having regard to his pleading) either that the moneys advanced were repayable on demand (in which case she would win because such a claim was statute barred) or because the asserted loan was repayable if she were successful in the litigation.
138. From an economic perspective there is no difference between a loan where the obligation to repay is conditional on the successful outcome of the litigation, and a conditional gift where the condition is that moneys paid would be repayable if the litigation were successful. But there is a difference in the causes of action for recovery of the advances (moneys lent or moneys paid to the defendant’s use) and the available defences. A defence of change of position is not available to an action for money lent.
139. Ms Bryant denied the conversations to which Mr Quinn deposed. (She also denied that Mr Quinn made the payments to his solicitors to which he deposed.)
140. Ms Bryant deposed that Mr Quinn told her on several occasions that “I’m going to Vasso [the solicitor] to pay him some fees” but that there was no other conversation between them on the payment of legal costs whilst Mr Vasso Tsolakis had the carriage of the Supreme Court proceedings. She asserted that she had paid Mr Tsolakis $25,000 but the judge rejected that evidence (J [49]).
141. In cross-examination, Ms Bryant accepted that she knew that Mr Quinn paid costs on her behalf to Mr Tsolakis. She gave evidence:

“Q. But you knew that the costs were being paid.

A. Yes, because that's what my uncle told me. That Vasso would call him and say, ‘moneys need to be paid’, and he would go to his office with a cheque.”

142. Her evidence was that she did not know how much he was paying. Her evidence was:

“Q. But they were costs being paid for your court proceedings, weren't they?

A. That's what I know now.

Q. Well, you knew that at the time.

A. I didn't know what he was paying.

Q. You didn't ask him how much, did you?

A. No. Because I didn't know what he was paying, because the phone calls and that didn't come to me.

Q. But you didn't ask Terry, ‘how much have you paid to Vasso?’

A. No.”

143. Mr Quinn’s evidence as to his conversations with Ms Bryant referred to above was successfully challenged in cross-examination. In cross-examination Mr Quinn said:

“Q. So, in fact, at no point did you ever tell Susan, ‘I'll pay the solicitor's fees and you'll pay me back if you are successful.’

A. She knew I was paying the solicitor's fees, but at that point I didn't mention that I wanted the money back.

Q. I'm going to suggest to you that at no point did you mention that.

A. No, that's not true . That came later - once the proceedings had finished.

Q. Let me take it back a step. That came later until the proceedings finished.

A. Yes, because I didn't know how much they were going to cost.

Q. When you were paying all these moneys to Vasso, there was never an agreement between you and Susan that she will pay you back after the court case.

A. No. It was when I knew what we had won, then I knew how much I was up for.

Q. I'm going to suggest that Susan never agreed to repay you any money that you paid Vasso.

A. Susan always just nodded or grunted. She never responded in, ‘yes, I will pay you back’, or ‘thank you for giving me the money’. She never said those sort of things.

Q. Ever?

A. Ever.

Q. That's in relation to the 55,000 bucks, yes?

A. Yes.”

144. The merits of Mr Quinn’s position and the deficiencies of his pleading were readily apparent to the primary judge.
145. In oral submissions immediately after the conclusion of the evidence (25 February 2021) the judge put to Mr Wallis:

“The case isn't quite run this way, but Mr Quinn, whatever be - unless there's some express agreement to the contrary, it might be thought that any repayment of moneys he had he has a claim on, so that to put it at its lowest, if he pays 55 of 80,000 for the costs and 55,000, 57,000 odd come back, and at its lowest there seems to be an entitlement without some sort of express agreement to the contrary to at least the 32,000 that was more than the most that Susan could recover by getting her money back. This might be a question for Mr Moutasallem that he'll address, but I'm just not sure what the basis is for him [Mr Quinn] not - when he pays costs and the Court orders that those costs be reimbursed to some degree by the losing party, that he shouldn't be entitled to them, other than, I suppose, he left the money with Susan. Didn't ask for it.”

146. In response to that observation, Mr Wallis said:

“I think it's not unfair for me to say that her evidence in that respect was somewhat evasive. She just didn't address the question I was asking, which was that Mr Quinn paid her costs and she also recovered costs, so to the extent of that she was enriched. She had more money to buy property.”

147. Mr Moutasallem, who appeared for Ms Bryant, addressed an issue raised by the primary judge that if the only liability were to refund moneys recovered under the costs order, then the statute of limitations would be inapplicable. Mr Moutasallem said:

“Your Honour, my submission is that firstly the way that the case is pleaded is not in that way. This is pleaded as a common law debt recovery matter. It's a loan agreement matter, but my submission is that the cause of action accrues from the moment that the money is handed over. I would have great difficulty in meeting a case during final submissions that pleads some form of unjust enrichment or equitable entitlement to funds, because that's not the way that the plaintiff pleaded their case, that's not the way that we have met the case...”

148. This was not an admission that his client would have no answer to such a claim, but that he would have great difficulty in meeting it after the evidence had concluded.
149. In a further exchange between the primary judge and Mr Moutasallem, on 25 February 2021 the judge and counsel said:

“HIS HONOUR: We're interrupting Mr Wallis's submissions here, but Mr Quinn's paying the solicitor, and there's no discussion specifically on it being a gift. ‘This is my gift to you, and whatever moneys we get back you keep.’ There's no suggestion of that sort of discussion, so he's taking care of the solicitor and then the moneys is paid back. What do you say is the arrangement that flows from those circumstances? Because on your case he's dealing with the solicitor to pay this money and paying the solicitor's fees, and you don't have any role in that, but then the money comes back in respect of that money that if he hadn't paid, the solicitor would have kept. How do you categorise that arrangement?

MOUTASALLEM: We categorise that arrangement as being an arrangement that is not a loan agreement. We say that it was either a gift or some form of a gratuitous payment made by Mr Quinn to Ms Bryant.

HIS HONOUR: Gratuitous payment, which when the proceedings were successful, as Mr Quinn believed, and they resulted in a favourable costs order, would not in any way redound to his benefit.

MOUTASALLEM: Yes.

HIS HONOUR: But there were no discussions about that.

MOUTASALLEM: But there were no discussions, on our case, to the contrary, when our case is Mr Quinn never asked us for the money. When he paid it, he never asked for the money when the case was over in the Supreme Court and we were successful, and there was no request for it when the cost order was made.

The difficulty, your Honour, that I'm having in the course of this dialogue is that these matters were not pleaded, so with respect to an argument as to an equitable entitlement to some money or a claim for unjust enrichment, does this accord with strict pleadings? The evidence has closed, and it would cause these parties difficulty in what almost nearly was a Local Court claim. But for the $3,000 that took it above $100,000, this is what the Court would class a small District Court civil litigation case, and your Honour, my submission is it would be unfair for the defendant to meet that case.”

150. In further oral submissions on 25 February 2021, the primary judge sought to obtain from Mr Wallis a submission as to what the arrangement was between Mr Quinn and Ms Bryant in relation to her obligation to repay the solicitor’s costs that he had advanced. Mr Wallis responded:

“WALLIS: Your Honour, what we say is this: your Honour has already looked at the affidavit material where there are assertions of an agreement. My friend will tell you, I'm sure at great length, that was dealt with in cross-examination where he said in respect of payments that were being made up until the Supreme Court proceedings, or the end of the Supreme Court proceedings, that there was no agreement at that point of time.”

151. This was not a responsive answer. Understandably the judge suggested that it would be handy if counsel had the transcript. There were further oral submissions on both sides, before the hearing was adjourned to 8 April 2021.
152. The parties provided further written submissions after the transcript was received. Mr Wallis did not raise any issue in his written submissions on the issue raised by the primary judge of unjust enrichment. He did not seek leave to amend, even to amend the claim that the asserted loan was repayable on demand.
153. In closing written submissions, Mr Wallis submitted that subsequent advances made after the Supreme Court proceedings were advanced on the basis that the moneys would be repaid on the sale of the Riverwood property and that the original advances to assist with the costs of the Supreme Court proceedings would also be repaid so that the advances for those costs were no longer repayable on demand, but on the same basis as the subsequent advances.
154. Mr Wallis referred to no evidence given by Mr Quinn that would support that contention and none has been referred to on appeal.
155. In the written submissions for Ms Bryant, Mr Moutasallem emphasised the admissions obtained in cross-examination and submitted that no money was advanced by way of loan. Counsel submitted that, if moneys had been advanced by way of loan, then s 14 of the Limitations Act 1969 (NSW) applied. Understandably, he did not seek to address the potential claim of unjust enrichment that had been raised by the primary judge on 25 February 2021.
156. When the matter returned before the primary judge for oral submissions on 8 April 2021, Mr Wallis raised no such submission. Nonetheless, the judge raised the issue with Mr Moutasallem, saying:

“One possibility is that it was, I suppose, from the plaintiff's point of view, a loan, but subject to a condition, or, from the defendant's point of view, a gift but subject to a condition, conditional gift...”

157. The primary judge pointed out that the question of whether any moneys were recovered for costs by Ms Bryant’s solicitor was evidence that was raised in Ms Bryant’s evidence that was irrelevant to the issues on her pleadings. His Honour said:

“HIS HONOUR: I think most of this recovery material is in your affidavit. So the

Court has this evidence that goes to this point, but you want me to disregard it because the plaintiff hasn't alleged it.”

158. Mr Moutasallem stoutly relied upon the pleadings.
159. The judge faced the dilemma that, despite his efforts, Mr Quinn’s lawyers had neither pleaded nor submitted that Mr Quinn had a good restitutionary claim. He had raised the issue with Mr Moutasallem, who had submitted that it could not be entertained. The judge decided the case on its merits, as they appeared from the evidence adduced, but did not consider the possibility that there might be a defence to such a claim. Unless the judge, of his own motion, invited a submission from Mr Moutasallem as to why the statement of claim should not be amended to include a restitutionary count and, having considered any such submission (and any application for adjournment), decided that the pleading should be so amended (see by way of example Ciaglia v Ciaglia [2010] NSWSC 341 at [119]- [122]), it was not open to him to decide the case on the basis he did.
160. I agree with Ward P that Ms Bryant was denied procedural fairness.
161. What should follow? By her amended notice of appeal, Ms Bryant sought an order that Mr Quinn’s claim should be dismissed. She is entitled to that order on the pleadings, but such an order would be unfair. It would penalise Mr Quinn for the conduct of his legal advisors, against whom he would have no recourse because of advocates’ immunity.
162. Therefore an order for a new trial is appropriate if there is a possibility of a different outcome.
163. In Nobarani v Mariconte the High Court said (at [48]) that it would be a rare case where it could be said that a properly conducted trial could not possibly have produced a different result. It was not incumbent on Ms Bryant to adduce evidence on appeal that she has an arguable defence to an as yet unpleaded restitutionary claim. There is a possibility of such a defence, eg if she could establish a defence of change of position.
164. I agree with the President that the parties should be referred to mediation. Were it otherwise I would order Mr Quinn to file a notice of motion in the District Court within 28 days to seek leave to file a further amended statement of claim seeking restitutionary relief. If the parties do not take up the liberty to mediate the remaining claim, or that mediation is unsuccessful, such a notice of motion should be filed in the District Court without delay.
165. On the question of costs, I agree with the order proposed by the President that the parties bear their own costs of the proceeding in the District Court. In light of this court’s reasons both Mr Quinn and Ms Bryant were partly successful and partly unsuccessful in the District Court. Mr Quinn, though otherwise successful, has failed on a severable issue that warrants a departure from the prima facie position that costs follow the event. In deciding how the costs discretion should be exercised to achieve fairness the perspective of both parties should be considered (Oikos Construction Pty Ltd t/as Lars Fischer Construction v Ostin & Anor (No. 2) [2021] NSWCA 98 at [28].
166. Although Mr Quinn has succeeded on the $55,000 claim to the extent that a new trial has been ordered, rather than his claim being dismissed, he should have failed on that claim at trial. The mixed result is that at trial both parties should have partly failed and partly succeeded. It is appropriate that they bear their own costs of the proceedings at first instance.
167. BRERETON JA: The respondent Terence Quinn made advances to, or for the benefit of, his niece the appellant Susan Bryant:

(1) between 14 February 2011 and 31 May 2011, $55,000 to solicitors acting for Ms Bryant in proceedings against her grandmother in the Equity Division, in respect of her costs of maintaining those proceedings;

(2) on 12 June 2012, $5,692.57 to those solicitors in respect of Ms Bryant’s costs of resisting an appeal from the judgment in the Equity proceedings;

(3) on 3 May 2013, $8,000 to Ms Bryant; and

(4) on or about 24 October 2013, $34,660 to fund the stamp duty for Ms Bryant’s purchase of a property at Riverwood.

168. Following the ultimate outcome of the Equity proceedings and the appeal and consequential costs orders in her favour, Ms Bryant received not only some $460,000 (in September 2013) in respect of her substantive claim, but also $112,000 (in December 2016) for her party/party costs.
169. In the proceedings below, which were commenced on 24 September 2019, Mr Quinn sued Ms Bryant to recover each of those sums, on the (sole) pleaded basis that they were loans repayable on demand. Ms Quinn pleaded that they were statute barred, the cause of action having arisen when the advance was made.^[1] The District Court judge dismissed the claim for the $8,000 on the basis that though it was a loan repayable on demand, it was statute barred; upheld the claim for the $34,660, on the basis that it was a loan repayable on demand and the proceedings in that respect were within time; upheld the claim for the $5,692, on the basis that it was a loan, repayable not on demand but only when the appellant received funds from the litigation (which occurred on 13 September 2013); and upheld the claim for the $55,000, on the basis that it was not a loan repayable on demand but a conditional gift, the condition being that the moneys be exhausted in the costs of the equity proceedings, which condition failed when costs were recovered in those proceedings, whereupon the moneys recovered by way of party/party costs in respect of it were the property of Mr Quinn.
170. Ms Bryant appeals from the judgments against her in respect of the $55,000, the $5,692, and the $34,660. The dismissal of the claim in respect of the $8,000 is not the subject of any cross-appeal.
171. As to the $34,660 (which is the subject of Ground 3), the question whether the advance was by way of gift (as the appellant contended) or loan (as the primary judge, upholding the respondent’s contention, found) was one of fact, and the decision was based on the evaluation of the credibility of witnesses, which was clearly informed, in part, by impressions of the witnesses formed by his Honour as a result of seeing and hearing them give their evidence. Such a finding should be disturbed only if it is demonstrably wrong by reason of “incontrovertible facts or uncontested testimony”, or “glaringly improbable” or “contrary to compelling inferences”.^[2] As the High Court explained in Lee v Lee:^[3]

“A court of appeal is bound to conduct a “real review” of the evidence given at first instance and of the judge's reasons for judgment to determine whether the trial judge has erred in fact or law [Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 at 126-127 [25] per Gleeson CJ, Gummow and Kirby JJ; Robinson Helicopter Co Inc v McDermott [2016] HCA 22; (2016) 90 ALJR 679 at 686 [43]; [2016] HCA 22; 331 ALR 550 at 558]. Appellate restraint with respect to interference with a trial judge's findings unless they are “glaringly improbable” or “contrary to compelling inferences” [Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 at 128 [29] per Gleeson CJ, Gummow and Kirby JJ; Robinson Helicopter Co Inc v McDermott [2016] HCA 22; (2016) 90 ALJR 679 at 687 [43]; [2016] HCA 22; 331 ALR 550 at 558-559] is as to factual findings which are likely to have been affected by impressions about the credibility and reliability of witnesses formed by the trial judge as a result of seeing and hearing them give their evidence. It includes findings of secondary facts which are based on a combination of these impressions and other inferences from primary facts [Kakavas v Crown Melbourne Ltd [2013] HCA 25; (2013) 250 CLR 392 at 434-435 [144]; Thorne v Kennedy [2017] HCA 49; (2017) 263 CLR 85 at 104 [42]]. Thereafter, “in general an appellate court is in as good a position as the trial judge to decide on the proper inference to be drawn from facts which are undisputed or which, having been disputed, are established by the findings of the trial judge” [Warren v Coombes [1979] HCA 9; (1979) 142 CLR 531 at 551 per Gibbs A-CJ, Jacobs and Murphy JJ; see also Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 at 127 [25]].”

172. I agree with Ward P, whose judgment I have had the benefit of reading in draft, that it has not been shown that the findings of the primary judge in this respect were demonstrably wrong, glaringly improbable or contrary to compelling inferences.
173. Much the same applies in respect of the $5,692 (the subject of Ground 2). Although there is a discordance between the findings in respect of this advance and those in respect of the $55,000 (as to which his Honour found that the evidence did not establish a loan), in the case of the $5,692 (but not in the case of the $55,000), there was evidence from Mr Quinn that he had told Ms Bryant that he wanted the money back, and his cheque butt was annotated “loan”. And in circumstances where the loan was for the purpose of litigation funding, and Ms Bryant would not be able to repay it unless successful in the litigation, implication of a term that it was repayable only on the successful outcome of the proceedings was reasonable.
174. As to the $55,000 (which is the subject of Ground 1), I agree with Ward P that the appeal must succeed. The appellant legitimately defended the case on the basis of the pleadings, and repeatedly insisted on adherence to the pleadings, and no ruling was ever sought, let alone made, permitting an amendment. On the basis of the case as pleaded, the appellant was entitled to judgment. While, as the reasons of White JA, which I have also had the benefit of reading in draft, show, the respondent might well have been entitled to succeed on the alternative basis of a restitutionary claim, no such claim was pleaded, and it is not inconceivable that there might have been available defences to such a claim which the appellant might have raised had such a claim been pleaded. Because of that possibility, the appellant is entitled to a retrial in which the opportunity to agitate any such defence is afforded to her.
175. I agree with the orders proposed by Ward P, save that as to the costs of the proceedings below, as Mr Quinn had to sue to recover any amount and will retain his judgment to the extent of about $40,000 in any event, in my opinion the appellant (defendant) should pay 50% of his costs to date in the District Court.

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^[1] Young v Queensland Trustees Ltd (1956) 99 CLR 560; [1956] HCA 51 at 566 (Dixon CJ, McTiernan and Taylor JJ); Argyll Park Thoroughbreds Pty Ltd v Glen Pacific Pty Ltd [1993] FCA 300; (1993) 11 ACSR 1 at 4 (Drummond J).
^[2] Fox v Percy (2003) 214 CLR 118; [2003] HCA 22 at [28]- [29] (Gleeson CJ, Gummow and Kirby JJ), [66] (McHugh J); see also Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Ltd (2010) 241 CLR 357; [2010] HCA 31 at [76] (Heydon, Crennan and Bell JJ).
^[3] (2019) 266 CLR 129; [2019] HCA 28 at [55] (Bell, Gageler, Nettle and Edelman JJ).