Boga v 15 Glenburnie Rd Pty Ltd

1. [1]

   BELL CJ: I agree with Adamson JA.

2. [2]

   MITCHELMORE JA: I agree with Adamson JA.

3. [3]

   ADAMSON JA: Thomas Boga, the appellant, appeals, in part, against the judgment ordered in his favour by Harrison AsJ (the primary judge) against 15 Glenburnie Rd Pty Ltd (15 Glenburnie), the first respondent, and Ahmad Sakr, the second respondent in the sum of $167,000 plus interest, which amounted to a judgment sum of $735,547.21, including interest up to 5 September 2025.

4. [4]

   The appellant seeks that the judgment sum be increased by $700,000 plus interest to take account of three payments alleged to be loans from him to 15 Glenburnie which were guaranteed by Mr Sakr and which were alleged to have been made pursuant to a loan agreement dated 28 October 2019 to which each was a party (the loan agreement). The performance of the loan agreement was secured by a mortgage granted by 15 Glenburnie to the applicant over a property known as 15 Glenburnie Road, Beveridge (the Beveridge property) which it purchased with the loan funds. The loan agreement, guarantee and mortgage are referred to more fully at [17]-[19] below.

5. [5]

   The three grounds of appeal relate to these three payments (the disputed payments) as follows:

6. [6]

   It was common ground that the appellant made each of the disputed payments to Anthill Construction Pty Ltd (Anthill Construction), a company which was incorporated in 2007 and of which Mr Sakr’s wife, Saly, was the sole director and shareholder. The primary judge found that Mr Sakr was a shadow director of Anthill Construction: J[6].

7. [7]

   In the Court below, the respondents denied that the disputed payments constituted loans, either to 15 Glenburnie or to Mr Sakr personally. The respondents’ case in the Court below was that the appellant had made these payments to Anthill Construction for building works at development sites in which Semak Pty Ltd (Semak), a development company of which the appellant and his two sons were directors and equal shareholders, was involved. These two sites were in Mount Ridley Road, Craigieburn (the Craigieburn property) and Burrows Lane, Wollert (the Wollert property). The respondents relied, in part, on three handwritten invoices apparently issued by Anthill Construction, which corresponded with the amounts of the disputed payments and, approximately, with the dates. The invoices, which were not ultimately accepted as genuine, recorded, as follows:

8. [8]

   The respondents submitted in the Court below and 15 Glenburnie submitted in this Court that, irrespective of whether their positive defence case was accepted, the appellant had failed to establish the following elements of its cause of action in respect of any of the disputed payments:

   1. (1)

      the payment was a loan;

   2. (2)

      the loan was to 15 Glenburnie; and

   3. (3)

      the payment was subject to the loan agreement (with the consequence that the agreed rate of interest applied, Mr Sakr was liable as guarantor and the Beveridge property secured the amount).

9. [9]

   The primary judge was not persuaded, on the balance of probabilities, that any of the three payments were loans and therefore rejected the part of the appellant’s claim which related to these payments. In these circumstances, her Honour did not address the other two matters ((2) and (3) above) raised by the respondents as to why they were not liable for the disputed payments.

10. [10]

    Mr Sakr ceased to be a director or shareholder of 15 Glenburnie on 10 November 2025 and filed a debtor’s petition on 2 December 2025. As he is now bankrupt, these proceedings are stayed against him: s 60 of the Bankruptcy Act 1966 (NSW). Accordingly, the only active respondent to the appeal is 15 Glenburnie, for whom Mr Chatterjee (who appeared for both respondents in the Court below) appeared.

11. [11]

    Mr George, who appeared on behalf of the appellant in the Court below and in this Court, accepted that unless he could persuade this Court of each of (1), (2) and (3) set out above, the appeal ought be dismissed and, in this event, that it was not necessary for the Court to address the grounds of appeal specifically. He also accepted that, although the primary judge had not made specific findings as to (2) and (3) above, it was open to this Court to decide for itself whether these matters had been established before addressing the grounds of appeal: see s 75A of the Supreme Court Act 1970 (NSW).

12. [12]

    For the reasons which follow, I am not satisfied that the appellant has established either (2) or (3). Accordingly, the appeal ought be dismissed. In these circumstances, it is not necessary to address each of the specific challenges made in the grounds of appeal.

The background

1. [13]

   The commercial relationship between the appellant and Mr Sakr involved a number of transactions only some of which are presently relevant. The appellant had formerly operated a chain of restaurants comprising 31 stores over four cities and had subsequently become involved in property development. He met Mr Sakr in 2002 through a mutual friend, Tarik Solak.

2. [14]

   In August 2015, Mr Sakr, who represented land owners in Victoria in sales transactions, introduced the appellant to the Wollert property. In September 2016 Semak purchased the Wollert property. In 2020, Semak obtained the relevant development approval and building permit for the construction of 12 two-bedroom and two three-bedroom apartments on the Wollert property: J[11]-[12]. Semak engaged Anthill Construction to perform the building work. The issue in the Court below about which version of the building contract had been signed by both parties need not be determined for the purposes of the appeal.

3. [15]

   In November 2017, Mr Sakr contracted to purchase the Craigieburn property: J[13]. The appellant and Mr Sakr agreed to purchase it in partnership: J[14]. As Mr Sakr did not have sufficient funds to complete the purchase, Mount Ridley Developments Pty Ltd, a company in which Mr Sakr and the appellant’s son, Seyhan, held equal shares, completed the purchase on 9 November 2018 and became the proprietor: J[18]. In February 2019, Mr Sakr transferred his shares in Mount Ridley Developments Pty Ltd to a company associated with Mr Solak: J[19].

4. [16]

   On 6 May 2019, Mr Sakr arranged for 15 Glenburnie to be incorporated, apparently for the purpose of purchasing the Beveridge property. The primary judge found that Mr Sakr was the director and alter ego of 15 Glenburnie: J[2].

5. [17]

   On 30 May 2019, the appellant advanced $100,000 to Mr Sakr. On 5 June 2019, the appellant advanced a further $50,000 to Mr Sakr. On 28 October 2019, the appellant (as lender), 15 Glenburnie (as borrower) and Mr Sakr (as guarantor) entered into the loan agreement by deed: J[23]. The recitals to the loan agreement said:

6. [18]

   The amount of the loan was $1.9 million and the term of the loan was two months. The “normal” interest rate was 10%, the default interest rate was 12% and interest was to be calculated daily. The loan was required to be repaid on or before 27 December 2019: J[23]-[26]. The sum of $1.9 million included the $150,000 which the appellant had already advanced to Mr Sakr.

7. [19]

   15 Glenburnie’s purchase of the Beveridge property settled on 29 October 2019 upon the payment of $1,782,619.44, following a direction to pay given by 15 Glenburnie to the appellant in accordance with the loan agreement. The advance was secured by a mortgage over the Beveridge property granted by 15 Glenburnie to the appellant: J[32]. The evidence did not establish that 15 Glenburnie’s role was other than as a special purpose vehicle to own, and potentially develop, the Beveridge property.

8. [20]

   The primary judge described the ambit of the present dispute as being “whether [the appellant] was lending the money to [either Mr Sakr or 15 Glenburnie] or paying his share of building costs to Anthill Construction”: J[47].

9. [21]

   On 16 March 2023, Anthill Construction was wound up in insolvency and a liquidator appointed.

10. [22]

    Both the appellant and Mr Sakr gave evidence in the Court below and were cross-examined. The primary judge made adverse credit findings against the appellant (J[319]) and Mr Sakr (J[322] and [326]) and drew a Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8 inference against Mr Sakr for his failure to call his wife, Saly: J[337].

11. [23]

    None of these credibility findings was the subject of challenge in this Court. Nor are they relevant to the determination of the appeal since, for the reasons which follow, the appellant’s evidence, taken at its highest, was insufficient to discharge his onus of proof in respect of any of the disputed payments.

12. [24]

    In the original statement of claim, which was filed on 14 November 2023, the appellant sued on the loan agreement and alleged that Mr Sakr guaranteed the due and punctual performance of repayment of the loan by 15 Glenburnie. The appellant’s pleaded case was, accordingly, that 15 Glenburnie was liable to the appellant as a borrower and that Mr Sakr’s liability arose as a result of his having guaranteed 15 Glenburnie’s obligations under the loan agreement.

13. [25]

    The original statement of claim made no reference to any of the disputed payments. In the defence, the respondents admitted the loan agreement, that 15 Glenburnie was the borrower and that Mr Sakr was the guarantor of 15 Glenburnie’s liability.

14. [26]

    An amended statement of claim filed on 9 May 2024 inserted the following allegations, with respect to the first disputed payment:

15. [27]

    The respondents alleged the following in their amended defence to the amended statement of claim filed on 5 September 2024:

16. [28]

    The amended statement of claim alleged, with respect to the second and third disputed payments:

17. [29]

    The respondents denied the advances alleged in A, C and D of the particulars to paragraph 13A and said that the sums particularised in B and E were paid pursuant to an agreement with Anthill Construction in relation to building works on the Wollert property.

18. [30]

    The appellant gave evidence in cross-examination that the alleged further advances particularised in A, C and D were cash amounts which he advanced to Mr Sakr personally for a short period only, on which he did not expect interest to be paid and which were not covered by the deed. The appellant did not challenge the primary judge’s rejection of his claims for these amounts. As indicated by the words in square brackets in the extract above, the amounts referred to in particulars B and E to paragraph 13A relate to the second and third disputed payments.

19. [31]

    Each of the grounds of appeal is in relevantly similar terms. The first ground challenges the primary judge’s rejection of the first disputed payment of $450,000 on 27 December 2019 (J[348]); the second ground challenges her Honour’s rejection of the second disputed payment of $100,000 on 10 November 2020 (J[361]); and the third ground challenges her Honour’s rejection of the third disputed payment of $150,000 on 19 July 2021 (J[373]). It is sufficient to set out the first ground, which alleges as follows:

Consideration

1. [32]

   For the reasons given above, I propose to address questions (2) and (3) raised above first: namely, whether the payment was a loan to 15 Glenburnie (question (2)) and, if so, whether it is governed by the loan agreement (question (3)).

2. [33]

   The appellant’s affidavit evidence as to the circumstances in which the first disputed payment was made was as follows:

3. [34]

   Mr George could not point to any direct evidence to support the proposition alleged in paragraph 13B of the amended statement of claim (extracted above) that the “advance” was made to 15 Glenburnie or that it was made on the same terms and conditions as the loan agreement. However, he submitted that inferences ought be drawn that:

   1. (1)

      the transfer of $450,000 by the appellant to Anthill Construction was an advance made at the direction of Mr Sakr and that, as Mr Sakr was the alter ego of 15 Glenburnie, the monies were advanced at the direction of 15 Glenburnie, who therefore became the borrower; and

   2. (2)

      the loan agreement covered the transfer because of the parties’ course of dealing.

4. [35]

   I reject each of these submissions. First, the appellant’s evidence that Mr Sakr had made the request as he was “tight for money” did not link the transfer of $450,000 to 15 Glenburnie. The appellant said he felt comfortable “transferring [the money to] him” because of the deed and mortgage. Under the loan agreement, 15 Glenburnie was the borrower and Mr Sakr was the guarantor. The mortgage secured only monies advanced by the appellant to 15 Glenburnie. That the appellant “felt comfortable” about transferring the money to Mr Sakr does not mean that the deed actually covered the transfer or that the mortgage over 15 Glenburnie would secure its repayment, even if it were a loan. The appellant’s subjective belief has no probative value in this respect.

5. [36]

   Further, there was no evidence that 15 Glenburnie obtained any benefit from, or was otherwise involved in, the first disputed payment. Its role was limited to its ownership of the Beveridge property and it was not suggested that any of the disputed payments related to that property. This is to be contrasted with the monies advanced under the loan agreement which were used to purchase the Beveridge property, which, in turn, secured the repayment of the loan by 15 Glenburnie. Even accepting, as the primary judge did, that Mr Sakr was the alter ego of 15 Glenburnie, it did not follow that any advance to him was an advance to 15 Glenburnie.

6. [37]

   Thus, the appellant’s evidence at its highest does not support the appellant’s case that the transfer of $450,000 was a loan to 15 Glenburnie, rather than a loan to Mr Sakr personally. If it was a loan to Mr Sakr, then it falls outside the pleaded case (since Mr Sakr’s liability to the appellant arises, on the pleading, only as a guarantor of 15 Glenburnie’s debts) and any claim against Mr Sakr is stayed in any event.

7. [38]

   Nor do I accept Mr George’s submission (based on paragraphs 9C and 13B of the amended statement of claim) that the course of the parties’ dealings created, in effect, an estoppel by convention that any monies paid by the appellant at the request of Mr Sakr were treated as advances under the loan agreement which attracted the agreed interest rates and were secured by the Beveridge property.

8. [39]

   The relevant principle was summarised in Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd (1986) 160 CLR 226 (Con-Stan) at 244; [1986] HCA 14:

9. [40]

   Before custom can form the basis of an implied term or an estoppel by convention, “[t]here must be evidence that the custom relied on is so well known and acquiesced in that everyone making a contract in that situation can reasonably be presumed to have imported that term into the contract”: Con-Stan at 236; see also Realestate.com.au Pty Ltd v Hardingham (2022) 277 CLR 115; [2022] HCA 39 at [77] and [126] and Rose v Manno Kingsway Pty Limited as trustee for the Manno Kingsway Unit Trust (2025) 116 NSWLR 598; [2025] NSWCA 23 at [67]-[76] (Bell CJ, Mitchelmore JA and I agreeing).

10. [41]

    Chattis Nominees Pty Ltd v Norman Ross Homeworks Pty Ltd (Receiver appointed) (in liq) (1992) 28 NSWLR 338 (Chattis) illustrates the application of the principle. Cohen J, at 343, held that because of a history of regular dealings between parties to a supply agreement, a contractual condition contained in the supplier’s invoice and not objected to by the purchaser became part of each individual contract of supply between those parties.

11. [42]

    Unlike in Chattis, the evidence in the Court below did not reveal any relevant custom, convention or course of dealing. Relevantly, the only two amounts which the appellant advanced to Mr Sakr prior to 28 October 2019 totalled $150,000. The appellant’s evidence, which was not disputed, was that this loan “was not repaid and became part of the larger loan advanced in October 2019”. Therefore, the two antecedent loans became part of the single transaction which comprised the loan agreement. This was the extent of the “history” which pre-dated the first disputed payment of $450,000.

12. [43]

    Further, even looking prospectively, the evidence did not establish any consistency in the dealings between the parties. For example, the appellant accepted in cross-examination that the cash payments particularised in A, C and D to paragraph 13A of the amended statement of claim (extracted above) were loans to Mr Sakr personally on 23 February 2020 ($45,000), 29 November 2020 ($65,000) and 31 March 2021 ($20,000) and were not covered by the loan agreement. The appellant’s evidence was that he did not charge Mr Sakr any interest on these amounts because they were only for a short period.

13. [44]

    Further, the appellant deposed that he transferred $400,000 to Anthill Construction on 26 June 2020 as a progress payment for construction work which it had completed at the Wollert property and that this amount “did not relate to the loan agreement”. The applicant also deposed that he made other payments to Anthill Construction, which were not loans:

14. [45]

    Accordingly, the appellant has failed to establish that there was any estoppel by convention or term implied from a course of dealings that would warrant the loan agreement being treated as covering payments to which its express terms did not apply.

15. [46]

    The following further matters are inconsistent with the disputed payments being loans to 15 Glenburnie (or, indeed to Mr Sakr):

    1. (1)

       the appellant accepted that, apart from the business records of the transfers of the disputed payments from him to Anthill Construction, there was no note, whether contemporaneous or otherwise which supported the proposition that these amounts were loans;

    2. (2)

       although the appellant and Mr Sakr had regular and often daily contact from about 2019 up until the appellant went overseas for eight months in 2022, there was no record of any message between them which referred, or which related, to any of the three disputed payments or which constituted a demand for their repayment;

    3. (3)

       no demand was made for the disputed payments in October 2023 when other text messages between the appellant and Mr Sakr indicated that the relationship between them had broken down, at least in part because the appellant refused to discharge the mortgage over the Beveridge property (which 15 Glenburnie had already contracted to sell);

    4. (4)

       it was common ground that there was no ledger which recorded the balance of payments between the appellant and Mr Sakr or 15 Glenburnie;

    5. (5)

       none of the three disputed payments was claimed in the original statement of claim filed on 14 November 2023; and

    6. (6)

       the first demand ever made by the appellant for any of the three disputed payments was made in the amended statement of claim filed on 9 May 2024, some four and a half years after the first disputed payment was made.

16. [47]

    For these reasons, the appellant did not establish that, even if the first disputed payment of $450,000 were a loan, it was either a loan to 15 Glenburnie or covered by the loan agreement.

17. [48]

    In these circumstances, it does not assist the appellant to discharge his onus of proof that the primary judge did not accept the respondents’ case on the first disputed payment or that the “invoices” apparently issued by Anthill Construction in the amounts of the disputed payments, which were tendered by the respondents in the Court below, were not regarded as genuine.

18. [49]

    For these reasons, the appellant’s claim for the first disputed payment of $450,000 must be rejected because the appellant failed to discharge his onus of proving that, if a loan, it was a loan to 15 Glenburnie and that it was covered by the loan agreement. Accordingly, the appellant’s appeal in respect of the first disputed payment must fail. In these circumstances, as Mr George accepted, it is not necessary to address ground 1.

19. [50]

    The appellant’s evidence of the second disputed payment was:

20. [51]

    For the reasons given above with respect to the first disputed payment, this evidence, together with the other evidence adduced by the appellant, is insufficient to prove that the $100,000 was a loan to 15 Glenburnie or that it was covered by the loan agreement.

21. [52]

    It is evident from the primary judge’s reasons at J[361], that her Honour considered that the second disputed payment was for an amount that the appellant’s entity owed to Anthill Construction under the Wollert contract. However, for the reasons given above, her Honour did not need to be positively satisfied of the respondents’ case in order to reject the appellant’s case that the second disputed payment was a loan from the appellant to 15 Glenburnie. The onus of proof was on the appellant. If there was any error in the primary judge’s finding as to the purpose of the second disputed payment, it does not, in my view, affect the result since the appellant did not prove on the balance of probabilities that the amount constituted a loan from him to 15 Glenburnie.

22. [53]

    I note for completeness that the appellant sought, on appeal, to raise a further basis for rejecting the hypothesis advanced by the respondents in the Court below: that the amount claimed in the invoice rendered by Anthill Construction did not comply with the contract because it was in breach of the Domestic Buildings Contract Act 1995 (Vic) as it purported to charge for breaking rocks and soil removal. As this matter was not raised by the appellant in the Court below, the appellant ought not be permitted to raise such a point for the first time on appeal since further evidence might have been led or it might have been capable of explanation or qualification: see Coulton v Holcombe (1986) 162 CLR 1 at 6-8; [1986] HCA 33 and Water Board v Moustakas (1988) 180 CLR 491 at 197; [1988] HCA 12. In any event, this matter was not capable of affecting the question whether the appellant discharged his onus of proof with respect to the second disputed payment.

23. [54]

    The appellant’s evidence of this payment was:

24. [55]

    For the reasons given above with respect to the first and second disputed payments, the appellant’s evidence of the third disputed payment is insufficient to prove that there was a loan of $150,000 to 15 Glenburnie (as opposed to other available hypotheses, such as that the payment constituted a loan to Anthill Construction, a progress payment to Anthill Construction or funds to permit Anthill Construction to construct the development on the Wollert property).

25. [56]

    For these reasons, the primary judge was correct to reject the appellant’s claim for the third disputed payment.

Conclusion

1. [57]

   As the evidence adduced by the appellant was insufficient to establish that any of the three disputed payments was a loan to 15 Glenburnie, the appeal ought be dismissed.

Proposed orders

1. [58]

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

   1. (1)

      Dismiss the appeal.

   2. (2)

      Order the appellant to pay the first respondent’s costs.