Kearney v Kearney

1. [1]

   WARD P: I agree with Adamson JA.

2. [2]

   ADAMSON JA: The appellant, Simon Kearney, appeals against a judgment entered against him on 5 August 2025 by Schmidt AJ (the primary judge) in favour of his mother, the respondent, Jill Kearney, in the sum of $593,033.41 (the judgment sum). The evidence established that Jill had advanced money to Simon over the course of several years, some of which was repaid. The issues in the proceedings in the Supreme Court (the Court below) were largely confined to the amount of the advances and the amount of the repayments.

3. [3]

   As the appeal largely turns on the quantification of the net balance of any amount outstanding, it is not necessary to canvass the whole financial relationship between the parties or the other matters which arose in the proceedings in the Court below.

4. [4]

   To assist the reader, the parties will be referred to by their first names.

The matters in dispute

1. [5]

   The matters which remain in dispute between the parties in this Court are confined to four disputed loan advances (#4, #7, #8 and #12) and five disputed payments (#18, #26, #62, #69 and #83). The numbers allocated to these transactions were those used by the parties in the Court below and in this Court. Although the numbers were not adopted by the primary judge in her findings, they were used in a table contained in her Honour’s reasons (J[79]).

2. [6]

   The agreed and disputed figures are contained in the following table.

3. [7]

   The parties’ respective positions are therefore as follows.

4. [8]

   As there is no cross-appeal, and as Jill accepted at the hearing of the appeal, any amount found to be outstanding to Jill which is greater than the judgment sum of $593,033.41 would result in the appeal being dismissed.

5. [9]

   The primary judge’s quantification of the amount which Simon owed to Jill did not proceed along the lines set out above (a determination of disputed loan advances and disputed payments). However, the parties agreed that it was the approach which this Court ought take.

6. [10]

   The primary judge’s approach arose from an unfortunate misapprehension about the significance of the figure of $653,171.68 in a schedule of payments prepared for the purpose of Jill’s submissions which was marked MFI #13 and which is the subject of ground 2. The primary judge regarded this figure as the net figure claimed by Jill (from which the parties ultimately agreed, when directed to bring in short minutes to reflect her Honour’s reasons, the sum of $59,196.59 needed to be deducted to give the judgment sum of $593,033.41). It was common ground that the primary judge’s apprehension that this figure was a net figure was erroneous.

7. [11]

   MFI #13 comprised a spreadsheet which relevantly recorded every amount that Simon alleged had been received by Jill ($2,053,517 in total). It identified which receipts she accepted as amounting to repayments of loan advances which she had made to him (which totalled $418,680); and those amounts which she accepted that she received but did not accept were repayments of loan advances, which were identified as interest payments, rent payments or other payments (which totalled in the order of $1,400,345). There remained many amounts (which totalled in the order of $653,000, being the difference between $2,053,517 and $1,400,345) which Simon alleged he had paid Jill but which Jill did not accept she had received at all. Thus the figure in the order of $653,000 reflected the total of amounts which Simon maintained, and Jill disputed, were repayments of loan advances. It was ultimately common ground that MFI #13 made no reference to the amount of the advances and that its effect was not that the net amount owing on Jill’s case was in the order of $653,000.

8. [12]

   This misapprehension may explain why the primary judge made few specific findings about the loan advances or the payments (as alleged in ground 1).

The grounds of appeal

1. [13]

   Simon appeals on the following grounds:

2. [14]

   By notice of motion filed on 3 March 2026, Simon sought leave to add grounds 3b and c to the notice of appeal. The motion was heard at the commencement of the hearing of the appeal. Jill’s counsel was unable to identify any prejudice flowing to Jill from the amendment. Accordingly, it is appropriate that leave be granted to Simon to amend the notice of appeal to include those grounds.

The notice of contention

1. [15]

   Jill alleged in her notice of contention that the primary judge ought to have found that Simon had confirmed the loan advances within the meaning of s 54 of the Limitation Act 1969 (NSW).

The proceedings in the Court below

1. [16]

   Jill’s principal claim for relief in the proceedings, as commenced, was a claim for an order for possession of a property which she owned and of which Simon was in possession. However, following Simon’s filing of a cross-claim, she amended her pleading to claim money sums from him as a result of loans which she alleged she had made to him or at his request (or to other companies, which were defendants in the Court below and who are not parties to the appeal). For the purposes of the appeal, it is necessary only to refer to her claims for monies outstanding pursuant to loans to Simon which have not been repaid in full.

2. [17]

   The further amended statement of claim (FASC) alleged, in paragraphs 34-59, that certain loans had been made by Jill to Simon and that each was repayable on demand. In paragraph 66 of the FASC, Jill alleged that an email sent on 13 November 2013 from Simon to her was a confirmation of his indebtedness to her for the purposes of s 54 of the Limitation Act. In paragraph 91 of the FASC, Jill alleged that Simon was indebted to her in the sum of $1,795,000, being the total of the money advanced.

3. [18]

   In his defence to the FASC, Simon substantially denied the loans alleged. In the alternative, he alleged that they had been repaid. He also alleged, in respect of each loan, that Jill’s “laches, delay and acquiescence operate to prevent the complaint being advanced”. It was accepted on behalf of Simon that no express defence that the money claims were statute-barred under the Limitation Act had been pleaded in his defence.

4. [19]

   It was common ground and well established by authority that Jill bore the onus of proving the advances and Simon bore the onus of proving the repayments.

5. [20]

   The primary judge’s list of issues relevantly included the following (J[32](6)):

6. [21]

   The primary judge set out, at J[79], a table of the claimed loans (identified by the number allocated to them by the parties), including the quantum and the date of the advance.

7. [22]

   The primary judge accepted that the bank records were “incomplete”: J[19] and [30](6).

8. [23]

   In J[4], the primary judge noted that Jill’s total claim against Simon was $1,795,000. Her Honour said, in a summary of her ultimate findings at J[27], that Simon must be ordered to pay Jill $653,000 (this was a reference to MFI #13 and reflected the primary judge’s misapprehension of that document). The primary judge said at J[28](22) that “[Jill’s] final analysis of the documentary evidence of the money advanced to [Simon] … and what she has been paid and was still owed should be accepted.”

9. [24]

   At J[82], the primary judge said:

10. [25]

    At J[90], the primary judge said further:

11. [26]

    To similar effect, the primary judge apprehended the effect of MFI #13 to be as follows (J[237]):

12. [27]

    The primary judge’s findings regarding the loans appear from the following paragraphs:

13. [28]

    The primary judge made adverse credit findings against Simon and said, at J[136]:

14. [29]

    The primary judge returned to the subject of the credit of Simon and Jill respectively as follows:

15. [30]

    The reference to the payments made by subtenants is a reference to a category of payments, the quantum of which was ultimately agreed.

16. [31]

    The primary judge addressed the time at which Jill’s causes of action arose against Simon, although her Honour noted that Simon had not pleaded a Limitation Act defence: J[171]. Her Honour referred to the submission made on behalf of Simon that it was not necessary that it be pleaded in light of Jill’s claims in promissory estoppel and allegations of confirmation of the debts pursuant to s 54 of the Limitation Act: J[172]-[175]. Her Honour found that, if Simon was to advance a limitation defence, he ought to have pleaded it: J[173].

17. [32]

    Further, her Honour considered, in the context of an unpleaded time bar, when Jill’s cause of action arose. Although Jill pleaded that the loans were repayable on demand (which would have resulted in time running from the date of each advance), the primary judge rejected this allegation and, instead, found that business efficacy required a term to be implied that they were repayable on the giving of notice: J[179]. Her Honour was not satisfied that notice had been given until after Simon had served a cross-claim in 2024: J[181]. Accordingly, the primary judge was not satisfied that Simon had established that Jill’s claims were time-barred, even leaving aside the absence of a plea in the defence to the Limitation Act: J[182].

18. [33]

    The primary judge’s reframing of Jill’s case is the subject of ground 3a.

19. [34]

    Although the form of ground 1 challenges the primary judge’s reasons by alleging that her Honour failed to make certain findings, Simon does not seek a re-trial. It was common ground that this Court ought review the evidence in the exercise of its powers pursuant to s 75A of the Supreme Court Act 1970 (NSW) to determine whether the disputed loans were made.

20. [35]

    The loan advances in dispute for the purposes of ground 1 are as follows:

21. [36]

    Jill alleged in paragraphs 39-41 of the FASC that on 12 March 2008 she advanced $100,000 to Simon; it was repayable on demand; and that, on 31 March 2008, Simon acknowledged his indebtedness to her for the advance. The primary judge’s reasons with respect to loan #4 appear to be as follows at J[251]:

22. [37]

    Leaving aside the pleading point as to whether Jill’s allegations were taken to have been admitted, I propose to address the evidence of the advance, as identified by the parties in their written submissions.

23. [38]

    In support of loan #4, Jill relied on:

    1. (1)

       a letter dated 12 March 2008 which she had written to Jane Bower at the National Australia Bank (NAB) requesting her to transfer $100,000 to the account of North West Direct Sales Pty Ltd (NWDS), a company of which Simon was the sole shareholder; and

    2. (2)

       an acknowledgment of debt signed by Simon on 31 March 2008 in respect of three advances, including in an amount of $100,000 made on an unknown date (but inferentially after the previous advances which had been made on 11 and 18 December 2007 respectively), which recorded that interest on the sum of $100,000 was calculated from 12 March 2008.

24. [39]

    Counsel for Simon submitted in the Court below that the evidence was insufficient to prove loan #4 and relied on Exhibit 7, a handwritten document dated 30 June 2009 prepared on a single occasion by Jill which purported to list all of the advances she had made to Simon prior to that date and which did not contain a reference to loan #4.

25. [40]

    The document was tendered in the following circumstances. While Jill was giving evidence, Simon’s counsel made a call for any document in which Jill recorded the loans she had advanced. The call was answered the following day when Jill was in re-examination. Following its production, Simon’s counsel was granted leave to cross-examine Jill further. Jill was not cross-examined about the omission of loan #4 from the document.

26. [41]

    Simon submitted that, as the list did not refer to loan #4, it ought be concluded that it was not an advance that she made to him. Further, and in the alternative, he submitted that the loan was from Jill to NWDS rather than to Simon personally; that the loan had been repaid (raised in ground 2); or that it was statute-barred as the loan was repayable on demand (raised in ground 3).

27. [42]

    I do not regard Exhibit 7 as gainsaying the compelling inference which arises from the bank records and Simon’s acknowledgment of debt that loan #4 was advanced in the amount and on the date alleged. Exhibit 7 was not a document, such as a business record, from which the inference can be drawn from the absence of a reference to an event or transaction that it did not occur: cf. s 69(4) of the Evidence Act 1995 (NSW). It is understandable that Jill might have temporarily forgotten that she had advanced $100,000 to Simon on 12 March 2008 when she turned her mind to making a list of advances 15 months later. This matter was not explored by Simon’s counsel in his cross-examination of Jill following production of the document which became Exhibit 7.

28. [43]

    I reject the alternative argument put on behalf of Simon that, if the funds were paid to NWDS, Jill could only recover the advance from NWDS. If, as can reasonably be inferred, Jill’s transfer to NWDS was made at Simon’s request, Jill is entitled to recover the amount directly from Simon on the basis of the money claim for money paid by the plaintiff for the defendant at the defendant’s request: see the discussion in In re A Debtor [1937] Ch 156 at [163]-[164] (Green LJ), cited with approval by Ipp JA (who dissented on a different point) at [172] in Symonds v Vass [2009] NSWCA 139; (2009) 257 ALR 689. Alternatively, the loan could be seen as one made to both Simon and NWDS or as a loan to NWDS which Simon guaranteed. On any of these permutations, Simon is liable to Jill for the amount transferred to NWDS.

29. [44]

    For these reasons, loan #4 has been proved.

30. [45]

    Jill alleged in paragraph 42(b) of the FASC that on 24 June 2008 she advanced $270,000 to Simon for the purchase of shares in AIRR Holdings Limited. The primary judge’s reasons did not include any specific findings relating to this alleged loan.

31. [46]

    Jill accepted that, if $270,000 had been advanced to Simon, the transfer would have been recorded in her bank statements and that if there was no bank record, then she would accept that she did not advance this amount to Simon. No bank statement was tendered to support the advance. Although Jill was also asked about this advance in re-examination, her answers did not assist in its proof.

32. [47]

    In these circumstances, loan #7 has not been proved.

33. [48]

    Jill alleged in paragraphs 44-46 of the FASC that she had advanced the sum of $150,000 to Simon on or about 1 September 2008, that it was repayable on demand and that he had repaid $140,000 of this advance on 3 October 2010. In paragraphs 44-46 of his defence, Simon denied the loan but admitted that he had paid $140,000 to Jill on 3 October 2010.

34. [49]

    In J[252] the primary judge summarised Jill’s evidence that she had advanced $150,000 to Simon in September 2008. As referred to above, the primary judge generally accepted Jill’s evidence.

35. [50]

    Jill’s bank statement recorded a debit of $150,000 on 1 September 2008. NWDS’s account recorded a credit entry of $150,000 on the same date. It was common ground that an amount of $140,000 was paid to Jill on 3 October 2008, as recorded in the bank statement of NWDS. The business records, together with Jill’s affidavit evidence, establish that loan #8 was made, and that $140,000 of the advance was repaid.

36. [51]

    In paragraph 33 of her FASC, Jill alleged that Simon had withdrawn $200,000 from a term deposit account on 8 October 2010 without her knowledge or consent. Simon denied this allegation.

37. [52]

    Jill deposed that, when she confronted Simon about the withdrawal, he said that a woman in the bank, who was in love with him, had facilitated the withdrawal. Jill confirmed that evidence in cross-examination. Simon denied doing so. It was not suggested that this alleged loan was a gift.

38. [53]

    The primary judge recorded at J[252] that Jill “claimed [that Simon] withdrew $200,000 from her account in October, without her knowledge or consent.” Her Honour did not otherwise make a specific finding with respect to loan #12. Although her Honour generally accepted Jill’s evidence, it cannot necessarily be inferred that the primary judge accepted Jill’s evidence of Simon’s alleged admission that a woman at the bank had facilitated the withdrawal. It is also possible that, if Simon actually said these words, they were uttered facetiously or sarcastically, and were not intended to be an accurate account of how the money came to be transferred.

39. [54]

    The business records established that $200,000 was withdrawn from Jill’s bank account and transferred to the bank account of NWDS. These business records are sufficient to prove that $200,000 was received by NWDS from Jill. The circumstances of loan #4 (set out above) permit the inference to be drawn that the money was transferred to that bank account following the express or implied request of Simon. This evidence establishes loan #12. In these circumstances, it is not necessary to express a view about whether the alleged admission was made by Simon or whether he was serious when he uttered the words about the “woman in the bank”.

40. [55]

    My conclusions as to the disputed loan advances which have been established, and therefore the total of the loan advances, is summarised in the following table.

41. [56]

    As referred to above, it was ultimately common ground that MFI #13 made no reference to the amount of the advances and that the effect of MFI #13 was not that the net amount owing on Jill’s case was in the order of $653,000. Rather, this figure in MFI #13 represented the total amount of the receipts in Jill’s accounts which Jill disputed were repayments of the loans she had made to Simon (she accepted that $418,680 had been repaid). Accordingly, ground 2 in terms has been made out. The primary judge’s misapprehension as to the significance of this figure may explain why her Honour did not make findings about the disputed repayments.

42. [57]

    For the reasons given above, it is necessary for this Court to perform a similar exercise of fact-finding with respect to disputed payments as was performed above in respect of the disputed advances. The disputed payments were:

43. [58]

    NWDS’s bank statements record that on 31 July 2008 $18,209 was withdrawn from its account by internet transfer. The description beside this entry was “nwds repay”. Simon gave evidence that this payment was made to Jill. This amount was not shown as having been received by Jill in any of the bank statements tendered. A subpoena was issued to the NAB at the request of Simon which sought production of all of Jill’s bank statements from 1 January 2000. However, the NAB’s responses indicated that the production was incomplete. As referred to above, the primary judge accepted that not all bank statements were in evidence.

44. [59]

    Simon bore the onus of proving that payment of $18,209 was made to Jill. The evidence does not make it more probable than not that the transfer by NWDS of that amount on 31 July 2008 was made to Jill, as opposed to another unidentified payee. As the primary judge did not accept Simon’s evidence “as accurate, or preferred over that of his mother, without objective, independent support” (J[136]), this cannot assist him in the absence of a business record that established to whom the payment was made. Accordingly, Simon has failed to discharge his onus in respect of this alleged payment.

45. [60]

    NWDS’s bank statements record that on 30 September 2008 $16,089.89 was withdrawn from its account by internet transfer. The description beside this entry was “nwds repay”. The evidence with respect to this alleged repayment is relevantly similar to the evidence with respect to disputed payment #18. For the same reasons, Simon has failed to discharge his onus in respect of this alleged payment.

46. [61]

    Jill accepted that NWDS had made a payment of $8,000 to the bank account for her superannuation fund on 16 July 2008. However, she submitted that the amount ought properly be characterised as an interest payment rather than a repayment of principal. She relied on the description of the payment as “nwds jk int” on the internet transfer for the bank statement in support of the inference that the payment was for interest. Simon has accepted in respect of other payments that such a description is sufficient to give rise to the inference that the payment was for interest rather than in reduction of a principal debt. However, he relied on the circumstance that the payment was made to Jill’s superannuation fund to distinguish disputed payment #62 from other payments.

47. [62]

    Disputed payment #69 is similar. The description “nwds jk int” also appears on NWDS’s bank statement beside the payment of $18,700 for the internet transfer to Jill’s superannuation fund.

48. [63]

    I am not persuaded that Simon has discharged his onus of proving that either of these disputed payments was a payment in reduction of the loan advance. Accordingly, neither should be deducted from the net amount due.

49. [64]

    The amount of $150,000 was paid from NWDS’s bank account to the “J Kearney Pty Super Fund” on 4 December 2009. Apart from the identity of the transferee, the bank statement does not give any further detail as to the purpose of the transfer. In the absence of any other explanation for the payment, I consider that the inference ought be drawn that this payment was made in reduction of Simon’s indebtedness to Jill arising from the loans. Accordingly, I am satisfied that this amount ought be deducted from the net amount due.

50. [65]

    My view as to the disputed payments which have been established, and therefore the total of the payments which ought be allowed, is summarised in the following table.

51. [66]

    The primary judge ought to have found that, subject to the limitation ground being made out, the net figure which Simon owed Jill is $757,123.41 (being the total advances of $1,525,000 less the total payments made of $767,876.59), which is greater than the amount of the judgment.

52. [67]

    As set out above, ground 3 has three sub-grounds. My view that neither sub-ground 3b nor 3c has been made out is dispositive of the appeal. However, it is also necessary to consider whether to address other submissions put by Simon’s counsel: Boensch v Pascoe (2019) 268 CLR 593; [2019] HCA 49 at [8] (Kiefel CJ, Gageler and Keane JJ). I will address sub-grounds 3b and 3c first.

53. [68]

    Section 14(1) of the Limitation Act provides for a limitation period of six years from the date on which the cause of action first accrues to the plaintiff for causes of action founded on contract or quasi-contract.

54. [69]

    Section 54 of the Limitation Act provides that the limitation period may be extended by a confirmation. It relevantly provides:

55. [70]

    Section 63 of the Limitation Act provides, in effect, that a cause of action to recover debt, damages or other money, is extinguished on the expiration of a limitation period.

56. [71]

    Section 68A provides:

57. [72]

    Uniform Civil Procedure Rules 2005 (NSW) (UCPR), r 14.14 provides that the matters which must be specifically pleaded include “extinction of right or title”.

58. [73]

    UCPR, r 14.29 provides:

59. [74]

    Simon’s counsel did not suggest that Simon had made a claim “by affidavit or notice” that Jill’s right or title to the cause of action in debt or money had and received had been extinguished.

60. [75]

    Simon’s counsel accepted that Simon had not pleaded the Limitation Act defence in his defence to the FASC. However, he submitted, first, that Jill can be taken to have accepted that the limitation period was an issue in the proceedings since she framed her claim on the basis of promissory estoppel and also pleaded confirmation of the debt within the meaning of s 54 of the Limitation Act. Second, he submitted that the pleading of the equitable defence of “laches, delay and acquiescence” was sufficient to raise the defence. Third, he relied on his references to the Limitation Act in both opening and closing submissions in the Court below.

61. [76]

    That Jill framed her claim in promissory estoppel and pleaded confirmation of the debt by email dated 13 November 2013 can be construed as an indication that those advising her were aware of the risk that, unless Jill’s claims could be framed as equitable claims or Simon’s confirmation of his debt established under s 54 of the Limitation Act, they would be time-barred under the Limitation Act if Simon chose to plead it in his defence. However, the expectation by Jill’s legal advisers that Simon would plead a defence under the Limitation Act did not obviate the need for him to allege it, as required by s 68A of the Limitation Act and UCPR, r 14.14(3).

62. [77]

    In paragraph 25 of Simon’s opening written submissions dated 31 January 2025 in the Court below, his counsel said, of present relevance:

63. [78]

    That Simon’s counsel raised the limitation issues in his submission on behalf of Simon does not amount to pleading the defence.

64. [79]

    As referred to above, Simon pleaded that each of the loans was unenforceable by reason of “laches, delay and acquiescence” and that these matters prevented “the complaint [of non-payment] being advanced.” There is a fundamental distinction between equitable defences, such as laches and acquiescence, which are fact-specific and discretionary and apply only to equitable claims, and a defence under the Limitation Act, which is non-discretionary and applies to legal claims and only by analogy to equitable claims: Gerace v Auzhair Supplies Pty Ltd (in liquidation) (2014) 87 NSWLR 435; [2014] NSWCA 181 at [51] (Meagher JA, Beazley P agreeing).

65. [80]

    The pleading of equitable defences does not amount to the pleading of a defence under the Limitation Act. A limitation defence must be pleaded: Price v Spoor (2021) 270 CLR 450; [2021] HCA 20 at [9]-[10] (Kiefel CJ and Edelman J), [40] (Gageler and Gordon JJ) and [78] (Steward J). The extinguishment of Jill’s cause of action as a result of her claim being brought outside the limitation period for debts and money claims of six years depended on the limitation defence being pleaded.

66. [81]

    In closing written submissions, Simon’s counsel said, of present relevance:

67. [82]

    At the end of his closing oral submissions, Simon’s counsel said:

68. [83]

    Ultimately, I did not understand Simon’s counsel to submit that these references were sufficient to amount to a pleading of the limitation defence, as distinct from an indication that he was aware of its provisions.

69. [84]

    As Simon did not plead the defence, Jill’s claims were not extinguished. For these reasons, neither of sub-grounds 3b or 3c has been made out.

70. [85]

    It is an aspect of procedural fairness that a judicial officer ought not decide a case on a basis which has not been argued, unless notice is given to the parties which gives them an opportunity to be heard. However, the primary judge’s reframing of Jill’s case and her Honour’s implication of a term that the loan was repayable on notice rather than, as alleged by Jill, repayable on demand, is, having regard to the determination of the dispositive grounds, hypothetical. I do not consider it to be either necessary or desirable to address ground 3a.

Conclusion

1. [86]

   Jill’s action against Simon for monies advanced to him or at his request is not statute-barred as he did not plead a defence under the Limitation Act. Having conducted the exercise of fact-finding required by s 75A of the Supreme Court Act, I am satisfied that Jill has established that Simon remains indebted to her in the sum of $757,123.41, which is greater than the amount of the judgment entered in her favour against him. As there is no cross-appeal, there ought be no alteration in the judgment and the appeal ought be dismissed.

2. [87]

   It is, accordingly, unnecessary to address the notice of contention.

Proposed orders

1. [88]

   For the reasons given above, I propose the following orders:

   1. (1)

      Dismiss the appeal.

   2. (2)

      Order the appellant to pay the respondent’s costs.

2. [89]

   McHUGH JA: I agree with Adamson JA.