A-Civil Aust Pty Ltd v Rose

1. [1]

   In December 2018, $1 million was deposited into Quadrant’s bank account, A-Civil claims, as the result of an oral agreement it had made with a Quadrant director Mr Rose, to lend him that sum for 3 months, on the basis that he would pay A-Civil $50,000 per month interest. A-Civil seeks to recover the loan and the unpaid interest, as well as Court interest from the date repayment was due in 2019, it having demanded repayment from Mr Rose, which he has refused to make and Quadrant also not having repaid the $1 million it received.

2. [2]

   There is no dispute that the $1 million was received by Quadrant and has not been repaid. But still all of A-Civil’s claims are resisted. Neither Mr Rose nor Quadrant acknowledging the loan, any obligation to pay interest on it, or to repay the $1 million. Their defence either denying or not admitting A-Civil’s claims but advancing no explanation for the refusal to repay the $1 million.

3. [3]

   At the hearing, by consent, Quadrant was given leave to amend its defence to raise a limitation defence. That resulting in A-Civil filing a reply. For reasons which follow I am satisfied that the claimed limitation issue does not arise.

4. [4]

   In accordance with the Court’s earlier orders, the parties had filed and served their affidavit evidence and written submissions. But the defence case changed during the course of the hearing. A forensic decision having been made after evidence was given by Mr Matta, A-Civil’s Acting Chief Executive and his former wife Ms Smith, at the time of the $1 million advance by A-Civil’s working director, not to call evidence from Mr Rose.

5. [5]

   The result was that the defence rested on an attack on the reliability of the evidence Mr Matta and Ms Smith gave and what it was claimed contemporaneous documents revealed. The case Mr Rose and Quadrant pressed in their final submissions being that A-Civil had not met the onus which fell on it to establish its claims, despite accepting that the $1 million advance must have been a loan.

6. [6]

   Albeit it was accepted that the decision not to call Mr Rose resulted in Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8 inferences having to be drawn against him and Quadrant.

7. [7]

   What was in issue between the parties finally thus turned on whether A-Civil had met the onus which fell upon it to establish the terms of the claimed loan which it sought to enforce.

Conclusion

1. [8]

   For reasons which follow I have concluded that there must be judgment for A-Civil.

Issues

1. [9]

   Not in issue between the parties was the agreed facts:

2. [10]

   The disputed facts and issues were then identified to be:

3. [11]

   There was also no issue about applicable principles. They include that:

   1. (1)

      The meaning of the terms of a commercial contract must “be determined by what a reasonable businessperson would have understood those terms to mean” in context: Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; [2014] HCA 7 at [35]. Further, that “will require consideration of the language used by the parties, the surrounding circumstances known to them and the commercial purpose or objects to be secured by the contract”;

   2. (2)

      The general policy of the law being that people should honour their contracts, that forming “part of our idea of what is just": Baltic Shipping v Dillon (1991) 22 NSWLR 1 at 9 per Gleeson CJ;

   3. (3)

      Penal interest must be approached in the way explained in Paciocco v Australia and New Zealand Banking Group Limited (2016) 285 CLR 525; [2016] HCA 28 at [32]–[34]. That explaining why A-Civil does not pursue interest at $50,000 per day that it claims was also offered by Mr Rose, if the loan was not repaid within 3 months, when seeking to persuade it to make the loan;

   4. (4)

      Post contractual conduct is relevant to the question of whether a contract was formed: Johnston v Brightstars Holding Company Pty Ltd [2014] NSWCA 150 at [120]-[121];

   5. (5)

      Subsequent communications may legitimately be used against a party as an admission by conduct of the existence or non-existence, as the case may be, of a subsisting contract, where an issue concerns whether a particular person was a party to that contract: Tomko v Palasty [2007] NSWCA 258 at [19]–[20] and [68]–[69]. The issue in that case also being whether money had been loaned to a company or to an individual personally;

   6. (6)

      Whether a contract was formed between particular parties must be determined objectively and not by reference to their subjective intentions: Ryledar Pty Ltd v Euphoric Pty Ltd (2007) 69 NSWLR 603; [2007] NSWCA 65 at [262]-[265];

   7. (7)

      But when the terms of an oral contract have to be found, a range of post-contractual conduct can be relevant. Conduct in carrying out the contract itself being objective evidence of what was agreed; an admission of one of the parties also assisting in ascertaining what was agreed; and business records created to record or report on the contract rather than carrying it out, also assisting in that task: Lym International Pty Ltd v Marcolongo (2011) 15 BPR 29,465; [2011] NSWCA 303 at [141]-[143]; and

   8. (8)

      But what the parties said or did after the contract was made cannot be used as an aid in its construction: Agricultural and Rural Finance Pty Ltd v Gardiner (2008) 238 CLR 570; [2008] HCA 57 at [35].

4. [12]

   The probative value of the evidence relied on by the parties must also be assessed. In doing so regard must be had to:

What were the terms of the loan agreement?

1. [13]

   I am satisfied that the evidence establishes that A-Civil loaned Mr Rose $1 million for 3 months, for $50,000 per month interest, even though the documents which have to be considered do not all point in one direction, as to the borrower being Mr Rose.

The proceedings were not brought out of time, the loan was not being repayable on demand

1. [14]

   There was no issue that if it was concluded that the term of the loan was 3 months, there was no limitation defence.

2. [15]

   None of the evidence accords with this loan having been made on the basis that it was repayable on demand. To the contrary, that not only makes no commercial sense, given the parties’ respective positions, it does not accord with the evidence of how and why these commercial parties agreed to the loan A-Civil made.

3. [16]

   The claim that if a loan had been made, it was repayable on demand was advanced because the result then would be that A-Civil’s claim would be out of time. It was also suggested that the term may have been for two months. But it cannot be accepted that this accords with what the evidence establishes, despite Mr Matta having first asked Mr Rose about repayment even before the three months had expired.

4. [17]

   It follows that the limitation defence must fail.

The $1 million was advanced by way of a loan to Mr Rose

1. [18]

   The purpose and object of the disputed transaction must be ascertained objectively, by considering what a reasonable observer, in the situation of the parties to the transaction, would conclude was its purpose and object: Ryledar Pty Ltd at [262]-[264].

2. [19]

   I am satisfied that properly assessed, the evidence does lead me to have the required persuasion that the $1 million paid into Quadrant’s bank account in 2019 as the result of Ms Smith having made out A-Civil’s cheque to QPS, at a time when Quadrant’s name was QPS Developments Pty Ltd, was a loan and not advanced for some other purpose. The defendants having accepted in closing submissions that the advance had to be characterised in some way and they not having offered up any alternate characterisation.

3. [20]

   That left in issue the question of who the other party to the loan agreement was. I am persuaded by the evidence that notwithstanding that the payment was received by Quadrant and A-Civil’s accounts reflect that the payment was made to it, rather than Mr Rose, that it was Mr Rose to whom the loan was advanced under his agreement with A-Civil.

4. [21]

   The evidence establishing that A-Civil and Mr Rose then had a common or "objective intention" in respect of the $1 million loan. That reflecting ”the intention that a reasonable person, with the knowledge of the words and actions of the parties communicated to each other, and the knowledge that the parties had of the surrounding circumstances, would conclude that the parties had, concerning the subject matter of the alleged contract”: Ryledar Pty Ltd at [262] citing Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451 at 461-462; Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 at 179.

5. [22]

   Attention also having to be paid to the purpose and object of A-Civil’s $1 million advance, given the parties’ commercial relationship and the commercial purpose of their contract, the genesis of the disputed transaction, its background, context and the market in which these parties were operating all having been considered: Codelfa Constructions Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 at 350.

6. [23]

   The evidence about these matters came from that given by Ms Smith and Mr Matta. Light was also shed on them by certain documents and later communications between Mr Matta, Mr Battaglia and Mr Rose. It is pertinent that Ms Smith’s understanding that the loan was made to Mr Rose, was not challenged. That understanding accords with the evidence of how she came to be persuaded that A-Civil should loan the funds to Mr Rose, she being its director and the relevant decisionmaker.

7. [24]

   It is evident that in various of the documents distinctions were not accurately drawn between Mr Rose and Quadrant. When, for example, reconciliations were provided as to payments A-Civil had received. One spreadsheet making reference to the loan having been made to Quadrant and in the second, it having been made to Mr Rose. Mr Matta was cross examined about these documents, which he had not prepared. They do not resolve what is in issue.

8. [25]

   Given what the entirety of the communications in evidence revealed, it must be accepted that it was Mr Rose’s repayment of A-Civil’s loan and the $50,000 per month interest he had agreed to pay it for 3 months, which Mr Matta pursued unsuccessfully, even before the 3 months had expired. Further, that this was well understood by all involved.

9. [26]

   That explaining Mr Rose’s final, emphatic written rejection of A-Civil’s request for repayment of the loan on his own behalf, when he sent his email as managing director of Quadrant. Despite then providing his reconciliation of payments which Quadrant had made, which accords with it never having repaid the $1 million advance which had been paid into its account. Not only has it never accepted that it was the borrower, it denied that it was by its defence, a position that it did not abandon at the hearing. Still Mr Rose did not accept that it was he who had borrowed the $1 million.

10. [27]

    Despite the case which the defendants finally advanced, that the evidence established that the claimed parties to the agreement constantly changed in Mr Matta’s communications, as did its term, the interest rate and the claim for GST, the evidence of Mr Matta’s pursuit of the repayment of the loan accords with the objective intention of the parties to the loan agreement, at the time that A-Civil advanced the $1 million, I am satisfied that A-Civil has established its case.

11. [28]

    I do not accept that Mr Matta’s evidence about the terms of the loan agreement was not reliable. His evidence not only according with that of Ms Smith, which was not challenged, but also with his later pursuit of its repayment; how Mr Battaglia and Mr Rose responded and Quadrant’s continuing denial that the money had been loaned to it.

12. [29]

    I am also satisfied that what these parties did and communicated to each other establishes that a reasonable person would conclude that they had a common intention, when the $1 million was advanced, that it was a loan which Mr Rose would not only repay in 3 months, but on which he would also pay the agreed interest.

13. [30]

    No evidence was called from either Mr Rose or Mr Battaglia, whose combative correspondence with Mr Matta was clearly written at a time when he no longer represented A-Civil. That being established not only by the language which Mr Battaglia used, but also by what he was then holding out to A-Civil in relation to further work which might be available to it with companies associated with Mr Rose. That also supports the acceptance of A-Civil’s case.

14. [31]

    In her affidavit Ms Smith explained how she came to agree to A-Civil making the loan to Mr Rose, as well as how she drew the cheque in the way Mr Battaglia had directed, when he and Mr Rose came to A-Civil’s office. In Ms Smith’s cross examination, when handing the cheque over, she remembered saying “we better get the money back in 3 months” and Mr Battaglia responding, “don’t worry you will get it back”, this evidence was not challenged.

15. [32]

    She was rather asked about Mr Battlaglia’s role when he was A-Civil’s general manager. She agreeing that before providing the cheque, she had never met or spoken to Mr Rose. She also agreed that she had a limited recollection of precise conversations, but said she remembered some things, including actually writing the cheque. She also explained how accounts were prepared under her direction by an in-house accountant and how she endeavoured to ensure they were accurate.

16. [33]

    I am persuaded that Ms Smith’s evidence must be accepted, the steps which she and A-Civil pursued reflecting that it and Mr Rose had entered a loan agreement which required the repayment of the funds it advanced to him within 3 months, as well as the payment of $50,000 per month interest. Mr Rose not having given evidence to contradict the existence of such a contract, its existence and the terms Ms Smith understood cannot sensibly be doubted, given the commercial context in which these parties were operating.

17. [34]

    After Ms Smith gave her evidence the defendants announced that Mr Rose would not be called and his affidavit was not tendered. That leaving her and Mr Matta’s evidence unchallenged by evidence which both Mr Rose and Mr Battaglia undoubtedly could have given.

18. [35]

    In those circumstances I am satisfied that their evidence must be accepted, supported as it is by other evidence. The result is that I am persuaded that the purpose and object of the payment A-Civil made was to loan Mr Rose the $1 million it advanced. It being inherently improbable on all the evidence, that it was advanced for some other undisclosed purpose, despite both Quadrant and Mr Rose continuing to deny that the loan had been made to either of them.

19. [36]

    Mr Matta’s cross examination does not cast doubt on this conclusion. The assessment of all of the evidence has to be approached in light of it being apparent that he and Ms Smith did not have a good understanding of the separate existence of the companies through which they and Mr Rose pursued their commercial activities. That does not preclude the conclusions which I have arrived at in relation to the loan agreement which A-Civil and Mr Rose entered.

20. [37]

    On Mr Matta’s evidence it was Mr Battaglia who first raised with him A-Civil making the loan to Mr Rose, to whom Mr Battaglia had first introduced him in late 2017. It was in October 2018 that Mr Battaglia had a conversation with he and Ms Smith about an opportunity to earn a quick $150,000, by making Mr Rose the short-term loan he then needed to pay a builder for a fit out on a Freshwater project, Mr Rose having asked Mr Battaglia to raise that with them.

21. [38]

    Even though Mr Rose only needed the loan for 3 months, Ms Smith was not interested in such an opportunity. But Mr Matta said that he was later persuaded by Mr Rose, when they discussed the proposed loan over lunch, with the result that Mr Matta then persuaded Ms Smith. It was at this meeting that Mr Matta said that Mr Rose had told him that he could probably repay the loan within two months and he was so confident that he could repay in three, that he would “even pay default interest of $50,000 a day for each day that I am late”. He also explained how he could possibly make such a promise, given a $3 million draw down he expected to receive in two months.

22. [39]

    While this was, and accounts of other conversations Mr Matta gave were, challenged in cross examination, such a conversation accords with the making of the loan and the repayment which he later pursued for A-Civil.

23. [40]

    Mr Matta said that Ms Smith was still not convinced. But Mr Rose and Mr Battaglia pursued the loan with him until he finally persuaded Ms Smith. He then meeting with Mr Rose and advising him:

24. [41]

    Ms Smith’s evidence accords with Mr Rose attending on her at the office to collect A-Civil’s cheque. The defendants having led no evidence to establish that there was any purpose for A-Civil’s payment of the $1 million and no such purpose having been put to Mr Matta or Ms Smith in cross examination, their evidence should be accepted, providing as it does a commercial explanation for the advance A-Civil made to Mr Rose.

25. [42]

    Notwithstanding the fallibility of human memory, I am persuaded that a loan of this is one which Mr Matta and Ms Smith were likely to remember. Especially given the business which A-Civil then pursued, the work it undertook and there being no suggestion that it was in the business of lending funds to borrowers.

26. [43]

    At the time the loan was made A-Civil was involved in demolition and civil works and Quadrant and Mr Rose in property development, in his case as the director of a number of companies. A-Civil had been engaged by some of them. On the evidence, it may be accepted, A-Civil was keen to obtain more such work, when it advanced the loan.

27. [44]

    The terms of the loan were never documented, but its existence was evidenced by various records. The recollections of Mr Matta and Ms Smith as to its terms are supported by Mr Matta’s conduct. He pursuing the repayment of the loan when it was not repaid when it fell due. The loan being referred to in various of Mr Matta’s written communications, as well as in other documents.

28. [45]

    The contemporaneous records also establish that there was acrimony which resulted in Mr Battaglia ceasing to work for A-Civil and then representing Quadrant and Mr Rose, when Mr Matta pursued the repayment of the $1 million and agreed interest.

29. [46]

    That Quadrant and Mr Rose finally led no evidence which raised for consideration any purpose for A-Civil’s payment of the $1 million cannot be ignored. The forensic decisions made not to call Mr Battaglia, or even finally Mr Rose, despite the service of his statement, in order to establish some other purpose for the $1 million payment, or to dispute the claimed terms of his agreement with A-Civil, must be accepted as helping to establish not only the existence of the loan, but also its claimed terms.

30. [47]

    It having to be inferred that Mr Rose’s evidence would not have assisted the defence case. The principle in Jones v Dunkel being concerned as it is with a party’s unexplained failure to call a witness, where it would be natural for that party to call that witness, or where the party might reasonably be expected to call that witness.

31. [48]

    Its operation is as explained in RHG Mortgage Limited v Rosario Ianni [2015] NSWCA 56 at [75] - [96]. The three relevant considerations being: first, that the missing witness would be expected to be called by one party, rather than the other; second, that this evidence would elucidate a particular matter; and third, that the absence is unexplained.

32. [49]

    If those conditions are satisfied the inference which may be drawn being that the witness’ evidence would not have helped the party’s case: RHG Mortgage at [79]. That inference may then be used in two ways. Firstly, in deciding whether to accept any particular evidence given, either for or against that party, which relates to a matter about which the person not called as a witness could have spoken. Secondly, in deciding whether or not to draw inferences of facts, which are open in relation to matters about which that person could have spoken.

33. [50]

    The evidence which has to be assessed includes accounts of conversations with Mr Battaglia when he still worked for A-Civil as its general manager. During the course of Mr Matta’s pursuit of repayment of the loan he went to work for Quadrant for whom he still works as a project manager. The defendants also did not call Mr Battaglia who, documents establish, not only also had relevant evidence to give, but had a serious falling out with Mr Matta. The result is that Jones v Dunkel inferences must also be drawn in relation to the defendants’ failure to call Mr Battaglia.

34. [51]

    The resulting inferences which must be drawn have to be taken into account in circumstances where the interests of Quadrant and Mr Rose were plainly not identical. Assessing the evidence of Mr Matta and Ms Smith in light of those inferences, as well as what their conduct, communications and documents reflect, I am satisfied must result in the conclusion that the $1 million paid into Quadrant’s account was a loan A-Civil had agreed to make to Mr Rose on the claimed terms.

35. [52]

    These conclusions are driven not only by Mr Matta’s first affidavit and the annexed documents, but also his second, in which he responded to evidence finally not led from Mr Rose. The documents including text messages which refer to the money loaned to Mr Rose and interest; and emails and reconciliations Mr Matta provided about payments he claimed A-Civil was owed.

36. [53]

    Mr Matta deposed to a conversation to the effect of:

37. [54]

    Mr Matta was cross examined about this, his oral evidence including that he did not recall the exact location of the restaurant; nor everyone who was in attendance; nor the precise date or length of the conversation and that he had not taken any notes. But that he did remember their discussions.

38. [55]

    The result was that he discussed the opportunity further with Ms Smith over ensuing weeks, while Mr Rose and Mr Battaglia pursued him by phone. They convinced him in December 2018 and he also then convinced Ms Smith. At a meeting with Mr Rose he told him:

39. [56]

    This accorded with Ms Smith’s understanding of the agreement and what then occurred.

40. [57]

    Mr Matta told Ms Smith that Mr Rose would come to collect the cheque. It was Ms Smith’s evidence that it was Mr Battaglia who told her to make out their cheque to “QPS”. The payee was later altered to “QPS Developments P/L”. Who made the alteration is not known. That was not then Quadrant’s name, it having in 2017 changed its name from QPS Developments Pty Ltd to First Quadrant Properties Pty Limited.

41. [58]

    But there is no question that the cheque was deposited in Quadrant’s account. That this was the result of steps taken by Mr Rose and Mr Battaglia must be accepted.

42. [59]

    None of the other documents in evidence are strictly contemporaneous, but they reflect the course of conduct which the parties and Mr Matta, Ms Smith and Mr Battaglia pursued. They include emails and text messages exchanged, as well as documents created by both Mr Matta and Mr Rose, with the assistance of accountants.

43. [60]

    By email of 11 March 2020 to Mr Battaglia, Mr Matta first provided a reconciliation of payments A-Civil sought and had received, which referred to a loan of “$1,430,000.00 with penalty interest inc GST”.

44. [61]

    This calculation was not explained in Mr Matta’s affidavits, but it was accepted that it contained two errors. The first, the claimed GST which was not payable on a loan and the second, that the agreed interest was only for three months, that totalling only $150,000. There was then no pursuit of interest at $50,000 per day after three months.

45. [62]

    On 8 April 2020 Mr Matta texted Mr Battaglia:

46. [63]

    Mr Matta followed up with further texts on 17 April, 25 May, 11 June and 30 June. On 1 July Mr Battaglia advised him by text that the spreadsheet was wrong. Mr Matta disputed this and Mr Battaglia advised him to redo it, removing various items. Mr Matta disagreed and told Mr Battaglia the money loaned was needed and that the calculations had been checked and were correct.

47. [64]

    On 3 July Mr Battaglia emailed Mr Matta advising that he still could not understand the spreadsheet and that it would have to be amended, in ways he suggested. But he did not dispute that A-Civil had made a loan.

48. [65]

    Mr Matta continued to pursue repayment by text message with Mr Battaglia, which became increasingly acrimonious. On 14 October Mr Matta sent an email which responded to matters Ms Battaglia had written, still pursuing repayment of the loan and undertaking to revisit the spreadsheet. It was provided by email on 19 October.

49. [66]

    In his email Mr Matta clearly articulated the repayment of the loan A-Civil was still pursuing:

50. [67]

    The second schedule was more detailed, referring to the $1 million loan to Mr Rose:

51. [68]

    Mr Rose advised Mr Matta on 20 October that he had met with his accountant who had provided him with a full breakdown of funds paid and that he would meet with Mr Battaglia the following day and then respond formally in writing.

52. [69]

    On 21 October Mr Battaglia advised Mr Matta and Ms Smith that Mr Matta’s numbers were wrong and his figures were mixed up, providing what he said was a simple reconciliation of “all the transactions relation [sic] to A-Civil and Chris on Cronulla project.” Mr Battaglia also claimed that “A Civil have been paid $1,964,440.33 This was to repay the loan to Chris, interest and to fully meet other financial accommodations A-Civil had extended.”

53. [70]

    This contradicted the defence case later advanced in these proceedings.

54. [71]

    This claim was disputed by Mr Matta in 2020, who pursued the repayment of the loan with Mr Rose, contending that it had not been repaid and seeking evidence of its claimed repayment.

55. [72]

    Mr Matta pursued that request again on 24 November, when he wrote “Chris can you also please show me how you paid A-Civil Loan to You Chris which was $1,000,000 with $50,000/mth interest for 3 mths only and any day late after the 3ths was $50,000 per day. Please send me the way you have paid this back as it hasn’t been paid to our account”.

56. [73]

    On 24 November he followed this up with a request for a meeting with Mr Rose, to be shown how the monies had been paid to A-Civil.

57. [74]

    Mr Rose’s email response on 24 November was:

58. [75]

    Mr Rose reiterated his position later that day, when in his further email he disputed that any money was still owing to A-Civil:

59. [76]

    I am satisfied that it must be accepted that what was then in dispute was not that A-Civil had made the disputed loan to Mr Rose, but whether it had been repaid. That was not the defence case finally pressed.

60. [77]

    Despite the attack on A-Civil’s case pressed at the hearing, which finally rested on the challenge to Mr Matta’s evidence and how the parties’ communications should be understood, I am satisfied on all that has to be considered, that it must be accepted that the loan was made to Mr Rose and not Quadrant.

61. [78]

    It was Ms Smith, not Mr Matta who was responsible for the accounts. It was she who provided the cheque, at Mr Battaglia’s direction, made out to “QPS” which was later reflected in A-Civil’s accounts as a payment made to Quadrant.

62. [79]

    Neither this, nor the fact that the cheque had been banked into Quadrant’s account, establishes that the loan was not made to Mr Rose. Not only was that what Ms Smith and Mr Matta understood had been agreed, but accorded with what Battaglia and Mr Rose wrote, when resisting the repayment Mr Matta pursued from A-Civil.

63. [80]

    That in these proceedings the defendants did not advance any evidence of repayment and Quadrant, while disputing that the loan had been made to it, despite having been paid into its account, did not accept that it had been made to Mr Rose, supports the conclusions I have reached. There being no issue that if not loaned to Quadrant, it can only have been loaned to Mr Rose.

64. [81]

    That is supported by the evidence Mr Matta gave in his second affidavit, where he responded to evidence which was finally not led from Mr Rose. This evidence was not challenged in cross examination, although Mr Matta was asked about whether he was responsible for giving instructions about A-Civil’s annual accounts, which he denied. That according with Ms Smith’s evidence.

65. [82]

    In that affidavit Mr Matta gave a more detailed explanation of the circumstances in which he was persuaded that A-Civil should make the loan to Mr Rose. Mr Matta explaining his understanding of matters which he took into account at the time he persuaded Ms Smith that it should make the loan. They included that:

    1. (1)

       He and Mr Rose had never discussed A-Civil making any investment in a project at Freshwater;

    2. (2)

       They had never discussed repayment of the loan in 12 months;

    3. (3)

       He understood Mr Rose was wealthy and needed a short-term loan, being asset rich but needing cash for a short while to pay a builder for a fit out, which would then get him a sign off and the ability to draw down from the bank, which he needed;

    4. (4)

       Given A-Civil’s circumstances, he would not have asked Ms Smith to agree to lending Mr Rose $1 million on an unsecured basis for 12 months, or to invest in a project that needed funds to keep it afloat;

    5. (5)

       In 2018 A-Civil not having the capacity to lend $1 million for significant periods; and

    6. (6)

       It being Mr Rose’s confidence that he could pay the loan back in three months, which convinced him to lend the $1 million, given his preparedness to also pay $50,000 per day interest, if he did not repay the loan in 3 months.

66. [83]

    This was an extravagant promise understandably not relied on by A-Civil to claim such interest. But that it was one made in order to convince A-Civil to make the decision to loan Mr Rose the funds needed should be accepted, he having decided not to give evidence to dispute its case. That it agreed to make that loan, intending not only to earn the promised interest in three months, but also hoping to obtain more work from the companies in which he was involved, being commercially plausible in all the circumstances disclosed by the evidence.

67. [84]

    In the face of all of the evidence which has to be considered and the inferences which have to be drawn, I am satisfied that it must be found that the $1 million was loaned to Mr Rose, rather than Quadrant.

Costs

1. [85]

   The usual costs order under the Uniform Civil Procedure Rules 2005 (NSW) is that costs follow the event: r 42, which in this case is an order in favour of A-Civil. The parties should thus confer about the appropriate costs order.

Orders

1. [86]

   For these reasons I am satisfied that there must be judgment for A-Civil.

2. [87]

   The parties agreed that if that conclusion was arrived at the necessary calculation of interest would have to be undertaken and final orders formulated, including as to costs.

3. [88]

   They should now confer and in the event of any dispute, file and serve short submissions about what is in dispute before 30 January 2026.