Chanaa v Zarour [2011] NSWCA 199 (21 July 2011)

Last Updated: 22 July 2011

Court of Appeal New South Wales

Case Title:	Chanaa v Zarour
Medium Neutral Citation:	[2011] NSWCA 199
Hearing Date(s):	29 June 2011
Decision Date:	21 July 2011
Jurisdiction:
Before:	Bathurst CJ at [1] Campbell JA at [2] Tobias AJA at [93]
Decision:	(1) Appeal dismissed. (2) Appellant to pay costs of the Respondents to the appeal, except the costs of the Fourth Respondent of preparing written submissions and appearing at the hearing of the appeal. [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.]
Catchwords:	APPEAL - whether judge's finding was open in light of the pleadings and the way the case was conducted - requirement of procedural fairness - relief confined to that available on the pleadings unless the actual conduct of the proceedings shows another issue was litigated APPEAL - whether judge's finding had sufficient evidentiary support CONTRACT - parties - identification of agreement and parties - whether contract was with A, B, A and B jointly, or A and B jointly and severally CONTRACT - parties - promise made by two promisors presumed to be joint unless words making it joint and several
Legislation Cited:
Cases Cited:	Adamson v Ede [2009] NSWCA 379 In Banque Commerciale SA en Liquidation v Akhil Holdings Ltd [1990] HCA 11; [1990] 169 CLR 279 Water Board v Moustakas [1988] HCA 12; (1988) 180 CLR 491
Texts Cited:	Glanville Williams, Joint Obligations (1949)
Category:	Principal judgment
Parties:	Eziab Chanaa (Appellant) Omar Zarour (First Respondent) Anan Assaf (Second Respondent) Imhal Assaf (Third Respondent) Ahlam Chanaa (Fourth Respondent)
Representation
- Counsel:	Counsel BW Collins QC; C Mulvey (Appellant) N Obrart (First Respondent) EN Gramelis (Fourth Respondent)
- Solicitors:	Solicitors Benjamin & Robinson (Appellant) Allied Lawyers (First Respondent) Unrepresented, submitting appearances (Second and Third Respondents) Dib Lawyers (Fourth Respondent)
File number(s):	2009/334368
Decision Under Appeal
- Court / Tribunal:	District Court
- Before:	Colefax DCJ
- Date of Decision:	24 September 2010
- Citation:
- Court File Number(s)	2009/334368
Publication Restriction:

Judgment

1. BATHURST CJ : I agree with the reasons and orders of Campbell JA.
   
2. CAMPBELL JA : This appeal arises from a building project in which three friends were involved. The Appellant, Mr Chanaa, owned a parcel of land at Northmead on which he wished to construct some villas. The Second Respondent, Mr Assaf, was to fill the role of builder. The First Respondent, Mr Zarour, lent an amount of $270,000 for the purposes of that development project. Without intending any disrespect, it is convenient to refer to these three men by reference to the roles they played concerning the development project, rather than by reference to the roles they played in the litigation. Thus, I will refer to them, respectively, as the Developer, the Builder, and the Lender. The Lender obtained a judgment in the District Court against the Developer for the whole of that $270,000, plus interest and costs.
   
3. The Lender also sued the Developer's wife, and the Builder's wife, in the court below. Each of those wives had a verdict given for her.
   
4. There is no issue that the Lender provided $270,000 that was used for the purpose of the development project, and that that $270,000 has not been repaid. There was an issue in the court below about whether the consensus pursuant to which the Lender had made the $270,000 available involved any intention to enter legal relations. The judge decided that issue in favour of the Lender, and no appeal is brought concerning it. The issue on the appeal concerns whether it was open to the judge to find that it was the Developer, and the Developer alone, who was the borrower of the $270,000.
   
5. The agreement pursuant to which the $270,000 was lent was oral. There was conflicting evidence about the terms of the conversation or conversations that gave rise to the agreement. There was little contemporaneous documentation concerning the agreement, and the judge found that the evidence of each of the three men involved "was problematic to varying degrees" . The judge held that the parties to the agreement were only the Lender and the Developer.
   
6. The Developer appeals against the decision in the court below, on two broad bases. One is that in light of the pleadings and the way the case was conducted, it was not open to the judge to find that the agreement was with the Developer alone. The other is that the finding that the agreement was between the Developer and the Lender had insufficient evidentiary support.
   

Some Uncontentious Facts

7. The task of building the villas was ultimately carried out by Sweet Aim Pty Ltd. The Builder and his wife were the directors of this company, although the trial judge found at [19] that the Builder was "the guiding force of that company." The Builder became the sole director from 20 February 2009.
   
8. The payments that constituted the loans sued for were made by cheques drawn on the Lender's account, as follows:
   

Date	Cheque Number	Payee	Amount
10/11/2006	1036	E & A Chanaa	$70,000.00
03/04/2007	1039	National Australia Bank	$50,000.00
03/04/2007	1040	National Australia Bank	$50,000.00
07/05/2007	1041	Sweet Aim P/L	$50,000.00
12/06/2007	1042	Sweet Aim P/L	$50,000.00

9. At the time the first cheque was paid the Lender had a credit facility with the ANZ Bank for $100,000, secured by a mortgage over his home. In February 2007 he obtained an increase in the credit facility, up to $300,000. The judge found [34] that there "was no other purpose for the increase in the credit facility apart from making advances to the project."
   
10. On each occasion when the Lender provided a cheque, he received in return a cheque drawn on the bank account of Sweet Aim Pty Ltd, dated one year in advance of the day the Lender provided his cheque.
    

Open to Find Agreement with Developer Alone?

11. Mr Collins QC, senior counsel for the Developer, submits that the Lender pleaded and conducted his case in the court below on the basis that the loan was a joint loan between the Lender on the one part, and the Builder and the Developer jointly on the other. He submits that for the judge to find that the agreement was with the Developer alone, and give judgment against the Developer alone involved the judge in acting on a basis that departed from the pleadings and the manner in which the case was conducted. He submits that for a judge to decide a case in that fashion is procedurally unfair. He submits that in consequence this Court should set aside the judgment below, and replace it with a judgment for all four defendants.
    
12. In my view those submissions do not succeed.
    

Applicable Principles

13. It is indisputable that a trial judge is required to conduct the proceedings in accordance with procedural fairness: Adamson v Ede [2009] NSWCA 379 at [53]- [63] and cases there cited. One aspect of that requirement of procedural fairness is that the decision should be given on the basis of issues that have been litigated in the course of the trial. In Banque Commerciale SA en Liquidation v Akhil Holdings Ltd [1990] HCA 11; [1990] 169 CLR 279 at 286-7 Mason CJ and Gaudron J said:
    

"The function of pleadings is to state with sufficient clarity the case that must be met: Gould and Birbeck and Bacon v Mount Oxide Mines Ltd (In liq) [1916] HCA 81; (1916) 22 CLR 490 per Isaacs and Rich JJ at 517. In this way, pleadings serve to ensure the basic requirement of procedural fairness that a party should have the opportunity of meeting the case against him or her and, incidentally, to define the issues for decision. The rule that, in general, relief is confined to that available on the pleadings secures a party's right to this basic requirement of procedural fairness. Accordingly, 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. See, eg, Browne v Dunn (1893) 6 R 67 at 76; Mount Oxide Mines at 517-518.

Ordinarily, the question 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 may be 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."

14. Water Board v Moustakas [1988] HCA 12; (1988) 180 CLR 491 related to whether a point that had not been run in the court below could be raised on appeal. In that connection, Mason CJ, Wilson, Brennan and Dawson JJ said at 497:
    

"In deciding whether or not a point was raised at trial no narrow or technical view should be taken. Ordinarily the pleadings will be of assistance for it is one of their functions to define the issues so that each party knows the case which he is to meet. In cases where the breach of a duty of care is alleged, the particulars should mark out the area of dispute. The particulars may not be decisive if the evidence has been allowed to travel beyond them, although where this happens and fresh issues are raised, the particulars should be amended to reflect the actual conduct of the proceedings. Nevertheless, failure to amend will not necessarily preclude a verdict upon the facts as they have emerged. See Dare v Pulham [1982] HCA 70; (1982) 148 CLR 658. In Leotta v Public Transport Commission (NSW) (1976) 50 ALJR 666 at 668; 9 ALR 437 at 446, a case having been submitted to the jury which was factually different from that alleged in the pleadings and particulars, Stephen, Mason and Jacobs JJ observed that the pleadings should have been amended in order to make the facts alleged and the particulars of negligence precisely conform to the evidence. The failure to apply for the amendment in that case was held not to be fatal. But in Maloney v Commissioner for Railways (NSW) (1978) 52 ALJR 291 at 294; 18 ALR 147 at 151-2, Jacobs J, with whom the other members of the Court agreed, pointed out that the conclusion in Leotta was reached only upon the presupposition that the new issue or new way of particularizing the existing issue had emerged at the trial and had been litigated.

It is necessary to look to the actual conduct of the proceedings to see whether a point was or was not taken at trial, especially where a particular is equivocal."

15. Procedural fairness is only one of the principles that are relevant concerning when a point not raised in the court below can be raised on appeal: Banque Commerciale at 284. However, the parties to the present appeal have, rightly in my view, treated the principles that I have quoted from Water Board v Moustakas as appropriate ones to apply in deciding whether a trial judge has decided a case on a basis that has not been litigated before him or her.
    

The Pleading

16. The pleading on the basis of which the trial was conducted was an Amended Statement of Claim in the form prescribed pursuant to Uniform Civil Procedure Rules . It had a separate section which identified the relief claimed, which stated:
    

"1. Judgment against the [Builder and Developer] jointly and severally in the sum of $270,000.00 plus all bank fees and charges plus interest at the rate of 7.5% per annum.

In the alternative

2. Judgment against the [Developer and Developer's wife] jointly and severally in the sum of $70,000.00 plus all bank fees and charges plus interest at the rate of 7.5% per annum; and

3. Judgment against the [Builder] for the sum of $200,000.00 plus bank fees and charges plus interest at the rate of 7.5% per annum.

4. Alternatively, damages as against the [Builder] for the sum of $200,000.00 plus interest."

17. The Amended Statement of Claim pleaded several different agreements in the alternative. One such agreement pleaded was:
    

" Agreement between Plaintiff and First and Second Defendant

1. On or about October 2006 the [Lender] entered into an agreement with the [Builder and Developer] jointly ('Agreement') pursuant to which the [Lender] was to lend to the [Builder and Developer] moneys up to $300,000.00 for twelve months repayable at a rate of 7.5% pa together with repayment of all bank fees and charges.

Particulars

The Agreement was oral and made between the [Lender] on behalf of himself, and the [Developer] on behalf of himself and the [Builder] or alternatively on behalf of himself at the [Developer's] house in October 2006 .

...

4. It was a term of the agreement that the [Builder and Developer] were jointly and severally liable for the above amounts.

Particulars

The implication is made as a matter of law." (emphasis added)

18. The pleading of damage concerning that alleged contract was:
    

7. "The [Lender] claims damages jointly and severally from the [Builder and Developer] in respect of the amounts referred to above or alternatively from the [Developer] ." (emphasis added)

19. Other alternative agreements that were pleaded, but that the judge ultimately did not find, related to:
    

(a) an agreement on 10 November 2006 between the Lender on the one hand, and either the Developer alone or the Developer and the Developer's wife on the other hand, to lend to the Developer (or the Developer and his wife) $70,000;

(b) an agreement on 3 April 2007 between the Lender and the Builder to lend money to the Builder, pursuant to which the two cheques dated 3 April 2007 totalling $100,000 were paid.

(c) an agreement on 7 May 2007 between the Lender and the Builder to lend sums of money, pursuant to which the cheques dated 7 May 2007 and 12 June 2007 totalling $100,000 were paid.

(d) an agreement on 12 June 2007 between the Lender and the Builder to lend money, pursuant to which the cheque dated 12 June 2007 (and also, surprisingly, the cheque dated 7 May 2007) was paid.

20. There were also allegations of misleading and deceptive conduct, monies had and received, and an action on an alleged guarantee given by the Builder and the Builder's wife, concerning which the judge made no findings.
    
21. The pleading is far from clearly drafted, and contains some equivocation.
    
22. The first equivocation concerned who was alleged to be the borrower. The body of paragraph 1 of the Amended Statement of Claim clearly alleges only a joint agreement. However, the Particulars to that paragraph raise two alternate cases - one of an agreement in which the borrower is the Developer and the Builder together, and in the other of which the borrower is the Developer alone. While the Particulars go wider, in that respect, than the paragraph to which they are supposedly particulars, they nonetheless contain a clear (though inartistic) allegation that the Developer was the sole borrower.
    
23. Insofar as the Particulars to paragraph 4 of the Statement of Claim allege that an implication was made as a matter of law that the Builder and Developer were jointly and severally liable on a contract they entered jointly, it is wrong. The correct position is stated in Glanville Williams , Joint Obligations (1949) at 35:
    

"... a promise is joint when a single promise is made by two or more persons without words indicating that each is to be bound individually as well as jointly. If there are such words, the contract is joint and several. The presumption is that a contract made by two or more persons is joint, express words being necessary to make it joint and several. Just as in the law of property a tenancy by two is presumed to be joint unless there are words of severance, so in the law of contract a promise by two is presumed to be joint unless there are words making it joint and several."

Notwithstanding that error, paragraph 4 and its Particulars still conveyed, as part of its message, an allegation that the Developer had a separate liability for the whole $270,000 plus fees, charges and interest. That separate liability of the Developer was only alleged, by paragraph 4, as a consequence of the loan agreement being entered by the Developer and the Builder jointly and severally.

24. There was also some equivocation about the relief claimed. The part of the Statement of Claim that specifically set out the relief that was claimed, sought judgment against the Builder and Developer jointly and severally, concerning $270,000 plus fees, charges and interest. That means that what is claimed is:
    

(1) a judgment against the Builder and Developer jointly for $270,000 plus fees, charges and interest, and

(2) a judgment against the Builder alone for $270,000 plus fees, charges and interest, and

(3) a judgment against the Developer alone for $270,000 plus fees, charges and interest.

25. Such judgments could be entered, even if the contract of loan was one entered by the Builder and Developer jointly and severally. Glanville Williams, op cit says at 84:
    

"Formerly, the judgment in an action against two or more joint and several contractors was necessarily joint, for the plaintiff could not sue more than one defendant together except on the joint liability. Now, however, the joinder of separate causes of action is permissible, and the judgments against joint and several contractors sued together may be several. The form of the judgment may apparently in such a case be joint and several - that is to say, it may combine a joint judgment against all with a number of several judgments against each."

26. The potential for injustice that arises through there being more than one judgment arising from a single contract of loan is controlled by the rules against double recovery.
    
27. Even though such a joint and several judgment would include a judgment against the Developer alone, a joint and several judgment could be given only concerning a liability that was itself joint and several. In that way, the claim for relief I am discussing was consistent with paragraph 4 of the body of the pleading.
    
28. However, the damages claimed in paragraph 7 of the Amended Statement of Claim ([18] above) were not only a joint and several judgment against the Builder and Developer, but in the alternative a judgment against the Developer alone. In that respect paragraph 7 of the Amended Statement of Claim sought relief that was wider than the relief articulated in the part of the Statement of Claim that was supposed to list the relief. It was consistent with the allegation in the Particulars to paragraph 1 of the pleading that the agreement was with the Developer alone.
    
29. These equivocations in the pleadings should have been sorted out before the case began. Even so, it could not be said that a judgment against the Developer alone based on him being the sole borrower of the $270,000 was outside the scope of the pleadings. The existence of the equivocations in the pleading means, however, that particular attention should be given in the present case to the actual course of the trial in deciding what issues were litigated.
    

The Opening

30. All counsel outlined their respective cases to the judge before any evidence was given.
    
31. Counsel for the Lender began by saying:
    

"The case is one where the plaintiff is seeking recovery of moneys which is in the sum of $270,000 plus bank fees and charges plus 7.5% interest which he says he loaned to the [Builder and Developer], essentially. There are various alternate ways in which the plaintiff puts the agreement. The first is that the moneys were lent jointly and severally to the - the whole of the moneys jointly and severally to the [Builder and Developer]. In the alternative the plaintiff's case is that $70,000 was lent to the [Developer] and the balance of $200,000 was lent to the [Builder].

They're the two ways that the agreement is put."

32. Her opening also included:
    

"And the background in which these moneys were advanced is that the [Developer] had purchased a property and was undertaking a development of that property and had retained the [Builder] as the builder/developer in relation to that development. So the moneys that were requested by the [Builder and/or Developer] to be advanced by the [Lender] were utilised by them in respect of this property development at Murray Street, Northmead."

33. Pausing there, it could not be said that her opening drew attention clearly to an allegation that the Lender claimed that the loan was to the Developer alone. However the opening was comparatively brief, and contains no abandonment of any pleaded claim. Further, the reference to " the moneys that were requested by the [Builder and/or Developer] to be advanced by the plaintiff ..." is consistent with a loan to the Developer alone being one of the contentions made.
    
34. Counsel for the Builder and the Builder's wife began his opening by saying:
    

"The [Builder and Builder's wife's] position is very simple your Honour. Firstly there was never any loan agreement between either of those parties and the plaintiff. My learned friend alluded to the fact that there was a corporate vehicle involved in this development, a company called Sweet Aim Pty Limited. That company was retained as I think my learned friend indicated to carry out the construction of this development. It was paid to do so.

HIS HONOUR: So you say the loan agreement was with that company.

[COUNSEL FOR THE BUILDER]: No I say there was no loan agreement at all.

HIS HONOUR: At all, not even with that company?

[COUNSEL FOR THE BUILDER]: That company was paid a fee to carry out the construction work of the nine villas. It was in fact a fee for service."

35. Counsel for the Developer and the Developer's wife opened by saying:
    

"The [Developer and Developer's wife's] position is relatively simple. They say that there was never any agreement between either the [Developer and the Developer's wife] with the plaintiff or any loan of moneys. If there was any agreement, your Honour, it was an agreement between the [Developer] and the [Builder] and any moneys passed were as a result of a direction by the [Builder] to the [Developer]. As my learned friend has pointed out, your Honour, the--

HIS HONOUR: As a result of a direction from whom to whom?

[COUNSEL FOR THE DEVELOPER]: The [Builder] to the [Developer] and if there was any loan it was a loan between the [Builder] and the [Lender]. (emphasis added)

The opening of the Builder thus clearly asserted that the Builder was not the borrower, while the opening of the Developer asserted that the Builder was the borrower. When there was no doubt the $270,000 had been paid and not repaid, if it was paid as a loan and the Builder's contention was right, the only alternative left was that the Developer was the borrower.

The Affidavit Evidence

36. In an affidavit affirmed on 12 November 2009 (" the Lender's Affidavit ") the Lender gave evidence that was reproduced at page 45 of the Court Book (" CB ") used at the trial:
    

"4. On or about October 2006 the [Developer] and I had the following conversation using words to the following effect:

[The Developer]: Can you loan me $400,000.00 for the project at 25-27 Murray St.

Me: I only have a credit facility for $100,000.00 and I will contact my bank to see if I can get a loan on my house. If it is approved you will pay all the bank fees and charges and interest.

5. Shortly after this I had a conversation with [the Developer] using words to the following effect:

[The Developer]: I have spoken to [the Builder] who is going to be my partner in the Murray St project and we will offer you 7.5% on top of the bank interest and charges.

[The Developer] said: After one year that project will be finished and the units will be ready for sale and you will have your money back by then.

Me: OK I trust you and [the Builder] and I accept the terms. "

6. On or about the 10 November 2006 the [Builder and the Developer] came to my house and said:

[The Developer] How much can you loan us before you go to Romania.

Me: I can only give you $70,000.00 now.

[The Developer]:: Make the cheque to the name of me and [my wife].

I then made out a cheque for $70,000.00 to E & A Chanaa."

37. The Builder's affidavit made on 22 March 2010 (" the Builder's Affidavit ") gave an account of the Builder lending money to the Developer prior to September 2006, and declining an offer from the Developer to be a co-venturer in the Northmead project. The Builder gave evidence of having a conversation with the Developer in about September 2006, in which the Developer told him that he had development approval, and that Westpac would provide a construction loan if he could show he had at least $300,000 invested in the project. The Builder said that the Developer told him that he (the Developer) had used all the money the Builder had previously provided to him to get the development through. According to the Builder they agreed that the Builder would build the villas at cost plus 10%. The Developer said that he needed at least $300,000. The Developer told him that he would try to solve the problem, and would tell the Builder what he could do. The Builder's Affidavit continued, in a passage reproduced at CB 111 and 112:
    

"13. On about 9 November 2006 I received a telephone call from the [Developer] and we had a conversation which to the best of my recollection consisted of words to the following effect:

[Developer]: " I have reached an agreement with [the Lender] about the initial financing to start off my project. Can you come to my house so we can discuss it?"

I said: 'OK. I will come over tomorrow'

14. The following day I went to the [Developer's] house and we had a conversation which to the best of my recollection consisted of words to the following effect:

[Developer]: ' I have come to an agreement with [the Lender] that he will pay me $70,000 now and he will pay me another $200,00 as I need it to pay your company as the works progress"

I said: " Ok then I can start building whenever you are ready"

[Developer]: "I have given [the Lender] my personal guarantee to pay him from the sale proceeds, but he wants security. I told [the Lender] that your company will give him [a] cheque dated 12 months in advance from the date of each payment I ask him to make to you.

When I have sold the villas I will pay [the Lender] from the proceeds of sale. If at that time [the Lender] has not presented the cheques you gave him then I will pay [the Lender], if [the Lender] has presented them, then I will pay you.

I will also pay [the Lender] any bank fees and interest at 7.5% on that money which I will pay when villas are sold. I will include those costs as part of the construction costs."

I said: "OK. Tell me when you want me to start building"

[Developer]: "You'll have to come with me to [the Lender's] house so I can collect the $70,000 from him and you can give him your company's cheque"

I said: "OK"

I then travelled with the [Developer] to the [Lender's] house. After having this discussion with the [Developer] I understood that the [Developer] had come to an agreement with the [Lender] to provide the [Developer] with funding of $270,000 for the [Developer] to fund his development.

15. After we arrived at the [Lender's] house the [Developer] and the [Lender] had discussions amongst themselves and then they walked over to me and then the following conversation took place in the presence of the [Lender] which to the best of my recollection consisted of words to the following effect:

[Developer]: "Can you [the Lender] write me a cheque for $70,000. You [the Lender] will pay then pay $200,000 to [the Builder's] company as the works progress"

[The Lender] then got his cheque book and wrote out a cheque for $70,000 and gave it to [the Developer]. After receiving it [the Developer] turned to me and said:

"[Builder] as we discussed can you now write out a cheque for $70,000 and give it to [the Lender] as security for the cheque I have just received from him. Make that cheque payable in one year"

I then took our the Company's cheque book and wrote out a cheque for $70,000 payable one year in advance to [the Lender] and handed it to him. [The Developer] then turned to [the Lender] and said:

"God willing everything will be alright and within one year you will get our money back, and if anything goes wrong, your money is with me". "

38. The Developer's affidavit evidence was significantly different to the affidavit evidence of the Lender and the Builder, but as the judge did not accept it, it is unnecessary to set it out. The thrust of his evidence was that the $270,000 had been borrowed by the Builder. He denied the conversations that the Lender had set out in paragraphs 4, 5 and 6 of the Lender's Affidavit ([36] above).
    

The Oral Evidence

39. The cross-examination of the Lender by counsel for the Builder clearly involved putting to the Lender that his agreement was not with the Builder. It included:
    

"Q. ... [the Builder] never approached you and asked you for a loan, did he?

A. What page you refer?

Q. Before you accepted the terms of the loan in October 2006?

A. No, he didn't approach me.

...

Q. As at February 2007, sir, which is the time you obtained the mortgage, it was clear in your mind, wasn't it, that, if there was ever any default in repayment of the loan you had made to [the Developer], that you would demand repayment from [the Developer], wouldn't you?"

40. Counsel did not get the answer he wanted to that question - the answer was "I understand the loan was for both them, and I would be demanding from both of them" . However, what is important for the purpose of deciding what issues were litigated is that the question was asked.
    
41. Counsel for the Builder attempted to cross-examine the Lender on Particulars to paragraph 1 of the Amended Statement of Claim ([17] above), but was stopped by the judge. Again, what matters for present purposes is that attention was drawn to those Particulars.
    
42. A specific question the counsel for the Builder put to the Lender was:
    

"Q. I've put it to you before sir and I'll just put it to you again to be fair. [The Developer] didn't make the loan agreement on behalf of himself and [the Builder] did he?"

43. Soon after, in the absence of the witness, the judge said to counsel for the Builder:
    

"He's told me in answer to questions from you that the conversation grounding the alleged loan agreement is paras 4 and 5 of his affidavit. Now your client was not a party to that conversation and that's not in dispute. Whether [the Developer] had authority from [the Builder] to say that is a different issue altogether but I don't quite understand why we're going through the statement of claim when the witness has - clear enough I think, perhaps I'm wrong, made it clear to me so far that the person with whom he negotiated the agreement, if there was one, was [the Developer]. Whether or not he was acting for [the Builder] is - it will depend on how I construe the subsequent evidence as to whether [the Builder] has acknowledged that."

44. When the Builder was cross-examined by counsel for the Developer about why he had made various repayments of the amount that had been borrowed from the Lender, the thrust of his answer was that he did so because the Developer had asked him to.
    
45. The evidence included a document, at p 158 of the CB (Blue 153 on the appeal) that the Builder had created on 30 October 2008. The Builder's explanation of it was:
    

"Well, your Honour, [the Developer] asked me to produce this, this document. We had an argue that there is interest to be paid for [the Lender] and he asked me, 'Make for me a table how much you owe me interest, how much [the Lender] everything have, and send it for me'. I send for one table calculating the interest he has to pay my company and the money which is put in the project and [the Lender's] money he put it in the project. That's the purpose of that schedule according to request from [the Developer], and I fax it through with full honesty to show him how much he has to pay the interest for me and for [the Lender]. That's the purpose of issuing this document from my side on the request of [the Developer]. To calculate the interest.

[COUNSEL FOR DEVELOPER]

Q. Well, sir, you were not part of any, on your evidence you were not part of any agreement between [the Lender] and [the Developer] as to moneys owing, were you?

A. No, I'm not part of that agreement.

Q. So you would not know what interest was repayable as between [the Developer] and [the Lender], would you?

A. Yes, if [the Developer] told me how much to make calculation for him. [The Developer] he asked me to calculate on 8% and I calculate my money on 8%. That's how I done.

Q. So is it your evidence, sir, that [the Developer] asked you to prepare this schedule for moneys he owed to [the Lender]?

A. Yes."

46. The judge then interrupted, saying he wanted to make sure he had understood the last answer, and asked:
    

"Q. Did you agree with the proposition that [counsel for the Developer] put to you, namely that [the Developer] asked you to prepare this document to show how much money [the Developer] owed [the Lender]?

A. Yes."

47. In the course of cross-examination of the Builder by counsel for the Lender, the following significant passage occurred:
    

"Q. ...It's your evidence, ... that ... on or about 9 October you received a telephone call from [the Developer] and he said to you, in effect ... that [the Developer] told you he had reached an agreement with [the Lender] about finance for the Northmead project?

A. Yes.

Q. And he at that time asked you to come to his - I withdraw that. [The Developer] proceeded to then ask you to come to his house to discuss the financing for the Northmead project?

A. Yes.

Q. And you went over to his house to discuss that?

A. Yes.

Q. You say that when you went to his house [the Developer] told you he had reached an agreement with [the Lender]?

A. Yes.

Q. And he told you that that agreement was that [the Lender] was to lend $270,000 to the project?

A. Yes.

Q. And that he had agreed with [the Lender] that it would be $70,000 paid now?

A. Yes.

Q. And he had agreed with [the Lender] that $200,000 would be paid later?

A. Yes.

Q. He told you that he had agreed that [the Lender] was to be repaid bank fees and charges in relation to his money?

A. Yes.

Q. And that [the Lender] was to be repaid in addition 7.5% interest.

A. Yes.

Q. And that the moneys were to be repaid to [the Lender] within - after 12 months?

A. He said within one year hopefully we finish the job and we'll pay him back, so he didn't mention within one year. Yes, that's--.

Q. He told you that he had agreed with [the Lender] that you would provide post dated cheque - 12 month post dated cheques to [the Lender] from Sweet Aim's account each time [the Lender] gave a cheque for the project?

A. Yes.

Q. And at that point you and [the Developer] both went to [the Lender's] house?

A. Yes.

Q. At [the Lender's] house [the Developer] reiterated - confirmed the terms of the agreement with [the Lender]?

A. Yes.

Q. You heard him do that?

A. Sorry?

Q. You heard him do that?

A. Yes.

Q. After that [the Lender] gave a cheque for the project to [the Developer] - made to [the Developer] and his wife for $70,000?

A. Yes.

Q. After he did that you wrote a cheque from Sweet Aim's account post dated 12 months and handed it to [the Lender]?

A. Yes.

Q. Subsequent to this there were four other cheques on other occasions that [the Lender] wrote for the project and made them out to Sweet Aim?

A. Yes.

Q. On each of those occasions you handed to [the Lender] a cheque post dated for 12 months from the account of Sweet Aim?

A. Yes.

Q. You agree with me that in giving the post dated cheques to [the Lender] you were carrying out the agreement that [the Developer] had reached with [the Lender]?

OBJECTION [COUNSEL FOR THE BUILDER]. QUESTION ALLOWED

Q. You agree with me that in giving the post dated cheques to [the Lender] you were carrying out the agreement that [the Developer] had made with [the Lender].?

A. No.

Q. You have agreed with me that it was part of the agreement that you were to provide [the Lender] with post dated cheques?

A. Yes.

Q. Written from Sweet Aim?

A. Yes.

Q. You were carrying out that part of the agreement in giving the cheques to [the Lender]?

A. As a security for [the Lender] yes.

Q. You agree with me that if when [the Developer] had told you that he had reached an agreement with [the Lender] if you did not want to be part of that agreement you could have said so to [the Developer]?

A. Yes I could say so in the time but you know I want to help, yes.

Q. You did not object to the fact that you were part of the agreement?

A. I am objecting that I am part of agreement but I am saying I was a security for the agreement yes I was, I was guarantor as a company for agreement."

48. Counsel for the Builder repeatedly put to the Developer that he (the Developer) had borrowed the money from the Lender. The Developer denied it, but the point for present purposes is that the questions were asked.
    
49. That line of cross-examination continued for a little while, until the judge enquired about the estimated finishing time of the cross-examination. Counsel for the Builder continued on that line of cross-examination, as follows:
    

"Q. You say there that [the Builder] said to you, 'I would like to speak to [the Lender] to settle this problem about the money I owe him' . See those words?

A. WITNESS: Yes.

Q. Now [the Builder] didn't say that to you, did he, because it was you that owed [the Lender] the money?

A. INTERPRETER: I didn't borrow any money from [the Lender] to pay him. [The Builder] did take the money and he has paid him. That's what he said.

HIS HONOUR: [Counsel for the Developer] are you going to take any Browne and Dunn point?

[COUNSEL FOR THE DEVELOPER]; No you Honour. My friends have done the same thing in relation to my cross-examination, so I'm not going to be taking it.

[COUNSEL FOR THE BUILDER]: That's the end of the Browne and Dunn anyway your Honour."

50. That exchange should make clear to any counsel that there was no need to keep on putting to the Developer that it was the Developer who had borrowed the money.
    

The Written Submissions

51. Counsel for all parties in the court below had prepared written submissions prior to commencing their oral addresses.
    

Lender's Written Submissions

52. The written submission of counsel for the Lender address various alternative causes of action. The first cause of action considered was:
    

" Claims in Contract

A. Agreement with [Developer]

24. If the evidence of the [Lender] at paragraph 4, 5 & 6 CB 45 which is corroborated by the [Builder] paragraphs 12 - 15 at CB 111 & 112 is accepted it would be found that the [Lender] made an agreement with the [Developer] to lend up to $300,000.00 to the project, $70,000 being paid directly to him and $200,000.00 being paid directly to Sweet Aim for construction costs.

25. This view of the events is supported by the following ..."

53. The written submissions then considered the evidence that supported that conclusion. It then continued:
    

"B. Agreement with [Builder and Developer]

26. An alternative view of the facts is that the agreement was made by the [Lender] with the [Builder and Developer]."

54. The evidence in support of that view was then discussed. The next alternative considered in those written submissions was:
    

"C. Agreement with [Builder] only

30. If the [Developer's] version of the events in October and November 2006 is preferred over the [Lender's] and the [Builder's] which are consistent this would tend to the view that the agreement was between the [Lender] and the [Builder] only."

Builder's Written Submissions

55. The written submissions of the Builder and the Builder's wife, commenced by saying:
    

"1. The loan agreement asserted by the [Lender] is said to have been made with either:

a. The [Developer] in his personal capacity; OR

b. The [Developer] in his personal capacity AND the [Developer] in his capacity as agent for the [Builder]."

56. Later in those submissions, when considering the evidence concerning the terms of the contract, a section of the submissions was devoted to considering who were the parties to the contract. That section of the written submissions commenced:
    

"35. The case as pleaded by the [Lender] claims that the loan agreement was entered into by:

a. the [Developer] in his own right AND on behalf of the [Builder]; or alternatively

b. the [Developer] alone."

Developer's Written Submissions

57. The Developer's written submissions summarised the pleadings in a way that commenced:
    

"The lender seeks recovery of:

a. $270,000 plus bank fees and interests at the rate of 7.5% per annum against the builder and the developer either jointly or severally ("the joint claim")."

58. No mention was made of any separate loan agreement alleged to exist between the Lender and the Developer alone concerning the $270,000. However, the written submissions later said:
    

" The alleged agreement between the lender and the developer

5. The lender alleges an oral agreement as outlined in his affidavit (page 45 para 4 and 5). The developer denies that this conversation ever took place and further he denies any agreement with the lender (page 149 para 20).

59. Further, in the course of making submissions about whether any agreement was intended to create legal relations, the Developer's written submissions said:
    

"The evidence and surrounding circumstances of the arrangement between the lender and the developer, or between the lender and the builder , is such that an objective bystander would not regard the parties as having intended to subject their agreement to the adjudication of the courts. The following matters support this contention: ..." (emphasis added)

The Oral Submissions

60. The written submissions of all counsel were available to all other counsel before the oral submissions commenced. The written submissions were provided to the judge at the start of the hearing on the day when oral submissions were made. The judge paused to read those written submissions before counsel started making oral submissions.
    
61. Counsel for the Lender commenced her submissions by saying:
    

"The pivotal point of the circumstances of this case is obviously that the plaintiff - and this is not disputed - that the plaintiff advanced $270,000 at the request of one or other or both of the defendants and that it's quite clear that one or other or both are liable to the plaintiff for repayment of those moneys." (emphasis added)

62. The first legal analysis that she put to the judge was that both the Builder and the Developer were liable to the Lender because there was a joint enterprise between them, that conferred authority on each to act for the purposes of the enterprise. She then continued:
    

"There are the two alternative scenarios the first is that there was an agreement made wholly between [the Lender] and the [Developer] and that is the position it is clear that the [Builder] would have your Honour err towards."

63. She went on specifically to address that submission by reference to paragraphs 24 and 25 of her written submissions ([52] above). Concerning the possibility that the agreement was between the Lender and the Developer alone, her submissions adopted an approach of putting before the judge the evidentiary factors that were against the conclusion. Counsel for the Lender adopted this approach concerning all the various possibilities of who was the borrower. The transcript of her oral submissions about the possibility that the Developer was the only borrower occupies about a page and a half of single-spaced typing.
    
64. She then went on to discuss the possibility of an agreement between the Lender and the Builder alone.
    
65. The substance of the beginning of the submission of the counsel for the Builder and the Builder's wife, was that the contract sued on was alleged to have been made between the Lender and the Developer, that the Lender bore an onus of establishing that the Developer was acting as agent of the Builder in so doing, and that the Lender had not discharged that onus.
    
66. Counsel for the Developer and the Developer's wife began his oral submission by saying:
    

"Firstly, in relation to the alleged agreement between the [Lender] and the [Developer] that is based upon the conversation which [the Lender] has put in his affidavit at p 45 paras 4 and 5. That conversation is denied by [the Developer] and the court is left in a position, as your Honour quite rightly pointed out earlier, that it must look at the surrounding circumstances and the state of play as to determine whose version, if any, the court is going to accept in relation to that alleged agreement."

67. After submitting that the Builder providing the post-dated cheques was inconsistent with the Builder not being a borrower, he said:
    

"Those issues go to strengthen the [Developer and Developer's wife's] argument, your Honour, that there was no agreement between [the Developer or the Developer's wife] and the [Lender], but rather it was an agreement between either [the Builder] and/or his company Sweet Aim ..."

68. Shortly after, he said:
    

"If your Honour is to find that an agreement did exist, either between the plaintiff and any of the defendants, [counsel for the Builder] has taken your Honour to some relevant law in respect of the amendment to the defences regarding the lack of an intention to create legal relations."

69. At no time in either the written or the oral submissions of counsel for the Developer was a submission put to the effect that if the judge did not find a contract in which the Developer and the Builder were joint borrowers of $270,000, then the Developer was entitled to judgment (or alternatively, to be liable for no more than the $70,000 concerning which a separate claim was clearly made against him).
    

The Judgment

70. In the judgment, the primary judge at [6] summarised the first of the alleged agreements as follows:
    

"First, he alleges that in October 2006 he entered into an (oral) agreement with [the Developer] or, alternatively with [the Developer and the Builder], to lend up to $300,000.00; and that pursuant to that agreement he made five separate payments to [the Developer], or to [the Developer and the Builder], between November 2006 and June 2007 (1 payment of $70,000.00; and 4 payments of $50,000.00)."

71. That the judge summaries the combined effect of paragraph 1 of the Statement of Claim and its Particulars in that fashion, after having sat through the trial, is in itself indicative of what the judge understood the contention that was being litigated to be.
    
72. After completing a summary of the pleadings, the judge continued, at [13]:
    

"There is no doubt that payments totalling $270,000 were made by [the Lender]: but to whom those moneys were paid; for what purposes; and upon what terms are issues hotly contested."

73. That summary of the issues encompasses an issue about whether the Developer was the sole borrower.
    

Decision Re Whether Developer was Sole Borrower was Litigated

74. In my view, the principal issue that was litigated was whether the borrower was the Developer alone, the Builder alone, or the Builder and Developer together (whether jointly, or jointly and severally). Part of that position was encapsulated on the hearing of the appeal:
    

"BATHURST CJ: The principal issue which occupied most of the court's time was in effect [the Developer] saying it was borrowed by [the Builder], but [the Builder] saying it was borrowed by [the Developer], is that fair?

COLLINS: And [the Developer] was rejected on that and we don't challenge that.

BATHURST CJ: But that was the issue.

COLLINS: It was your Honour."

75. There was no doubt that the money had been borrowed, and the Builder's evidence all pointed to the borrower being the Developer alone. The Lender's clear belief, that he stated in evidence on several occasions, was that he had lent to both the Builder and the Developer. However, under the objective theory of contract his belief does not advance the question of who in truth were the parties to the contract. The Lender's evidence was to the effect that it had been the Developer who had requested the loan from him, it was with the Developer alone that he had arrived at agreement about the basis on which any loan would be made, and he had taken at face value the assertion of the Developer that he and the Builder were partners in the project.
    
76. While the opening of counsel for the Lender did not clearly indicate that it was being contended that the Developer was the sole borrower, neither did it abandon the claim made in the Amended Statement of Claim. The opening of counsel for the Builder clearly indicated that his client was not the borrower. That was a clear theme of the cross-examination of both the Lender and the Developer by counsel for the Builder. If the Builder was not the borrower, the only other view of the facts that was possible was that the Developer was the borrower.
    
77. When counsel have taken part in the entire trial process they are in a position as good as that of the trial judge to understand what issues have been litigated and what issues have not. Both the written and oral submissions of counsel for the Lender clearly made a claim for judgment on the basis of a contract with the Developer alone. To my mind it is quite significant that there was no protest from counsel for the Developer about the submissions being put on that basis. If indeed the question of the Developer being the sole borrower had not been litigated, one would expect a protest at submissions being put to advance that contention. His own written submissions ([59] above) recognised the existence of a possibility that there was an "arrangement between the lender and the 'Developer'".
    
78. For these reasons, I have concluded that the judge did not base his finding on a case that had not been litigated.
    

Insufficient Evidentiary Support for Agreement Between Lender and Developer Alone?

79. The critical finding made by the judge was at [36]:
    

"... [the Developer] and [the Lender] did have the conversations alleged by [the Lender] in October and November 2006 and the conversations alleged by [the Builder] in November 2006. I find that as a consequence of these conversations [the Lender] agreed to lend to [the Developer] moneys up to $300,000 and that [the Developer] agreed to accept such moneys on the terms set out in paragraphs 28 and 30 above."

80. The terms that the judge had set out in [28] were ones derived from paragraphs 4 and 5 of the Lender's Affidavit ([36] above), namely to pay the bank charges, fees and interest plus an additional 7.5%. The terms that the judge had referred to in [30] included, in addition to the terms identified in paras 4 and 5 of the Lender's Affidavit, a term that when any payment was made by the Lender, the Builder would give the Lender a Sweet Aim cheque dated 12 months in advance for the same amount.
    
81. In my view, there was evidentiary support for the findings that the judge made about both the parties to the loan, and the terms of the loan. The conversations in paragraphs 4 and 5 of the Lender's Affidavit were evidence of a request by the Developer to "loan me" $400,000. The Lender made clear in that conversation that he would require indemnity for bank fees, charges and interest. While in the conversation in [5] of the Lender's Affidavit the Developer says that "we will offer" an additional 7.5%, there is no basis for concluding that the Developer had authority to speak for the Builder. Consensus was reached at that meeting about the terms of the loan, other than the amount to be lent. As both the Lender and the Developer knew that the Lender would need to obtain a bank loan to be able to lend the amount requested, there may well have been a condition precedent that the Lender actually obtain such a bank loan, but as that condition precedent was satisfied it is of no present importance.
    
82. The evidence in paras [13], [14] and [15] of the Builder's Affidavit is more precise. The various statements that the Builder attributes to the Developer in that affidavit, if accepted, amount to an admission by the Developer that he had reached an agreement with the Lender, relating to "the initial financing". By reference to the previous conversation between the Builder and the Developer in which the Developer had said he needed $300,000, there is a basis for finding that what the Developer was telling the Builder was that he had reached agreement with the Lender concerning a loan of $300,000. The Developer also admitted, according to the Builder's evidence, that he had reached an agreement with the Lender for an immediate loan of $70,000 and $200,000 in due course, on the basis of indemnity for bank fees and interest at 7.5%. (Interest at 7.5% is not the same as an additional 7.5% on top of the interest the Lender paid to the bank, but no point was raised either below or on appeal concerning that.)
    
83. Mr Collins places great weight on the Lender's account of the conversation on 10 November 2006, in paragraph 6 of the Lender's Affidavit. That account has the oddity that it says "... the [Builder and the Developer] came to my house and said : " , followed by an account of a conversation in which the Builder says nothing. While that account includes the Developer saying " How much can you lend us... " it was a matter for the judge whether he accepted those words as an accurate verbatim account of what was said rather than seeking to capture its essence, and whether he took the " us " to be a reference to the Builder and the Developer rather than a colloquial reference to " me ". The Builder gives an account of that meeting, at paragraph 15 of the Builder's Affidavit, that includes some details that are not contained in the Lender's Affidavit, but it cannot be said that the two accounts are inconsistent. It was open to the judge to accept both accounts. On the Builder's account, in light of the conversation recounted in paragraph 13 of the Builder's affidavit any conversation between the Lender and the Developer on 10 November 2006 would be unlikely to involve the Developer saying that both the Developer and the Builder were to be the borrowers.
    
84. The judge stated in [29] of his judgment that the Builder corroborated the Lender's evidence concerning the conversations relevant to contract formation.
    
85. Mr Collins submits that the judge was mistaken in taking that view. He points out that the Lender in cross-examination denied the conversation in para [14] of the Builder's Affidavit (whatever that might mean, concerning a conversation at which the Lender was not present). He points out that the Lender in affidavit evidence denied "paragraph 15 as detailed by [the Builder]" , and the Lender said he relied on the account in paragraph 6 of the Lender's Affidavit. Mr Collins also, correctly, points out that there are some details of the conversation that, in [14] of the Builder's Affidavit, the Developer is said to have recounted to the Builder that do not appear in the Lender's affidavit account of the same conversation.
    
86. These matters do not preclude the judge taking the view that the two pieces of evidence corroborated each other. The criminal law requires certain types of evidence to be corroborated, and there is an extensive case law concerning what sorts of evidence are capable of providing corroboration. However, in the civil law corroboration is not a technical term, or a legal requirement. I do not take the judge to be saying anything more than that the evidence of the Builder provided a measure of support to the evidence of the Lender. It is capable of doing that even if it is not the same in all respects. Further, even though the Lender denied certain aspects of the Builder's evidence concerning the contractual conversations, that does not obliterate the denied evidence from the case. Rather, the task of the judge is to decide, on the basis of the whole evidence (denials and all), what he or she accepts. In doing that, there is no requirement for the judge to accept the whole of the evidence of any one witness.
    
87. In these circumstances there was an evidentiary basis for the contractual finding that the judge made. It is a finding that is consistent with the inherent probabilities of the situation, under which it was the land of the Developer that was being improved through the expenditure of the borrowed money.
    
88. The appeal should be dismissed. Subject to one matter to which I now turn, costs should follow the event.
    

The Fourth Respondent

89. Though the Builder and the Builder's wife were named as respondents to the appeal, they took no active part in it.
    
90. The Developer's wife was joined as fourth respondent. The notice of appeal made no claim for orders against her. Notwithstanding that, she provided some written submissions, the gist of which is that there was no occasion to alter the verdict that she obtained in the court below. She appeared by counsel at the hearing of the appeal.
    
91. Her counsel took no substantive part in the appeal. At the commencement of the appeal he was informed that he was there at his client's own risk as to costs. There is no reason to require any other party to the appeal to bear the costs of the Fourth Respondent concerning the written submissions or attending at the hearing of the appeal.
    

Proposed Orders

92. I propose the following orders:
    

(1) Appeal dismissed.

(2) Appellant to pay costs of the Respondents to the appeal, except the costs of the Fourth Respondent of preparing written submissions and appearing at the hearing of the appeal.

93. TOBIAS AJA : I agree with the orders proposed by Campbell JA for the reasons he has given.
    

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