Dinh v Nguyen [2006] QDC 483

DISTRICT COURT OF QUEENSLAND CITATION: Dinh v Nguyen [2006] QDC 483 PARTIES: TRANG DAI DINH Plaintiff V HONG THI THANH NGUYEN Defendant FILE NO/S: BD3588/03 DIVISION: Civil PROCEEDING: Trial ORIGINATING COURT: District Court, Brisbane DELIVERED ON: 11 September 2006 DELIVERED AT: Brisbane HEARING DATE: JUDGE: Nase DCJ ORDER: [1] Judgment to the plaintiff in the sum of $58,000 together with interest assessed at $14,815.30 CATCHWORDS: COUNSEL: Mr N. J. Thompson for the plaintiff Ms C. Conway for the defendant SOLICITORS: Butts and Barkley for the plaintiff Conroy and Associates for the defendant Introduction [2] Trang Dai Dinh (Mrs Dinh), the plaintiff in these proceedings, was born in Vietnam. She is the proprietor of a jewellery shop at the Inala Civic Centre, a shopping centre at Inala, an outer Brisbane suburb. Hong Thi Thanh Nguyen (Mrs Nguyen), the -- 1 of 9 -- 2 defendant in these proceedings, operated a restaurant at Darra, a nearby suburb, over the relevant period. In this action, Mrs Dinh is suing to recover money loaned to Mrs Nguyen. [3] On 2 September 2003, Mrs Nguyen executed an acknowledgement of indebtedness in favour of Mrs Dinh. The acknowledgement of indebtedness document provides simply: “1. The debtor acknowledges that she is currently indebted to the creditor for the sum of seventy five thousand dollars ($75,000.00) (“the monies”). 2. The debtor agrees to pay the monies by way of cash to the creditor by 50 instalments at $1,500.00 each every Monday commencing from the 1st September 2003 as per Schedule “A”.” [4] Mrs Dinh’s claim is that she loaned Mrs Nguyen $25,000 in cash in May 2003, and a further $50,000 in cash on 2 September 2003. When the $50,000 was handed to Mrs Nguyen, in exchange she executed the acknowledgment of indebtedness. Mrs Dinh said she advanced the $75,000 to Mrs Nguyen with the idea of purchasing an interest in a commercial building held by Mr Nguyen (the Darra building). She understood Mrs Nguyen was not in a position to dispose of her interest in the Darra building at the time of the advances, but when she was, the advances were to be treated as part of the purchase price. Because of the intention to treat the advances ($75,000) as part of the purchase price for Mrs Nguyen’s interest in the Darra building, no interest was specified as part of the loan arrangement. [5] Mrs Nguyen’s account of their financial dealings is altogether different. She admits she owed Mrs Dinh money but says it was about $40,800 and arose through the -- 2 of 9 -- 3 traditional Vietnamese method of money lending called “hui”. She denies receiving loans of $25,000 and $50,000 from Mrs Dinh. She also denies any promise or undertaking between them to sell her share in the Darra building to Mrs Dinh. Her claim is that she signed the acknowledgement of debt under duress. [6] The argument put on behalf of Mrs Nguyen is that the reason Mrs Dinh wanted the acknowledgment of debt was because she did not believe she could otherwise enforce the debt owed to her by Mrs Nguyen as a consequence of their engagement in the hui system of money lending. The issues [7] The issues in the trial are factual: did Mrs Dinh advance $25,000 to Mrs Nguyen in May 2003, and an additional $50,000 on 2 September 2003? Did Mrs Nguyen freely and voluntarily sign the acknowledgement of debt on 2 September 2003 in order to obtain the additional $50,000 on that date? [8] The resolution of the claim also throws up a number of other issues: is the acknowledgement of debt void because of a total failure of consideration1, or because it is a sham2, or because of uncertainty? Whether there is a total failure of consideration or whether the acknowledgment of debt is a sham are in this case questions of fact. Whether the acknowledgment is void for uncertainty is a construction point. The Vietnamese system of hui 1 This is merely a restatement of Mrs Nguyen’s assertion that no advance of $75,000 occurred. 2 This is an elaboration of the assertion that no advance of $75,000 occurred. In accordance with this elaboration, the real purpose of the acknowledgment of debt is to provide a means of enforcing the defendant’s hui debts which otherwise may not be enforceable in the court system. -- 3 of 9 -- 4 [9] One way in which the defence case is put is that the acknowledgment of debt is a sham because its true purpose is to provide a mechanism to enforce debts incurred during Mrs Nguyen’s involvement with Mrs Dinh in a hui. [10] Although the evidence at trial is somewhat piecemeal, I understand a hui is the name given to a traditional Vietnamese method of lending and borrowing money. The members of a hui pay into a common pool, the money in the pool is then lent out by rotation (or other means) to the members of the hui. The controller (or boss) of the hui is responsible for organising the arrangement. Other features of interest relevant to this case are that if any member of the hui defaults, the controller or boss is liable to make good the default to the other members of the hui, and that high rates of interest may be levied on loans from the common pool of funds. It is obvious that for a hui association to operate successfully mutual trust and loyalty between the members participating in the hui are essential. Issues of credit [11] Both Mrs Dinh and Mrs Nguyen presented as upright members of the community. Mrs Dinh places value on her reputation. She said that because of her reputation she is welcome to join any hui.3 Mrs Nguyen, she said, does not have the same reputation and as a consequence may not be accepted in to a hui.4 She agreed that Mrs Nguyen owed her money as a result of their participation in hui. Mrs Nguyen claimed her indebtedness was $40,800. Mrs Dinh said the hui debt was approximately $30,000. Mrs Dinh said the advances of $25,000 and $50,000 were in addition to any hui debt, and were intended to go towards the purchase of Mrs Nguyen’s interest in the Darra building. She said there was an understanding 3 T30 line 28. 4 T30 line 29. -- 4 of 9 -- 5 that Mrs Nguyen’s interest would be sold to her at a good price. Mrs Nguyen denied any agreement to sell her interest in the Darra building to Mrs Dinh. [12] This case is dependent on the assessment of the witnesses Mrs Dinh, Mrs Nguyen and Jeremy Williamson. They are Vietnamese Australians, and each gave evidence with the assistance of an interpreter. The language and cultural differences complicate reliance on demeanour and hinder their ability to communicate fully to the court. Cultural factors may also affect judgments about probability and motivation. [13] The common law has always been conscious that human testimony can be manufactured. In assessing the credit of the witnesses, as well as looking at the usual range of considerations, I have tried to analyse the issues by reference to any objective features in the evidence. Analysis [14] In this case, the loans of $25,000 in May 2003 and of $50,000 on 2 September 2003 were proved by Mrs Dinh’s evidence. The payment on 2 September 2003 was confirmed by Jeremy Williamson’s evidence. In reality, his evidence adds little to the proof of the debt as he has an obvious interest in the trial. Two external features in this case which provide a means of analysing and testing the competing accounts are the acknowledgment of debt signed by Mrs Nguyen on 2 September 2003, and evidence of the source of the loans of $75,000. [15] In May 2003, Mrs Dinh obtained an advance of $75,000 ($75,940) on her home loan. The withdrawal of funds provides some support for her evidence, although it does not corroborate her evidence that she then loaned the monies to Mrs Nguyen. What she did with the funds is not documented because she kept the funds in cash. -- 5 of 9 -- 6 Nevertheless, an inability on her part to point to a source for the claimed advances would tend to lend credence to the defence argument the acknowledgment related to a hui debt. [16] The acknowledgement of debt signed by Mrs Nguyen is an admission she owes Mrs Dinh $75,000, and, unexplained, it corroborates Mrs Dinh’s evidence. Mrs Nguyen in the course of her evidence offered the following explanations for the signed acknowledgment. Firstly, she says she only signed the document because she was fearful for her safety. Secondly, she said her only indebtedness to Mrs Dinh arose out of Vietnamese money lending (hui) and was, in any event, only $40,800, not $75,000. The difference between her actual indebtedness and the amount acknowledged, she said, was interest Mrs Dinh had unilaterally decided to charge her. [17] A key issue of fact is whether the acknowledgment was signed under duress. If it was signed under duress, the acknowledgement loses any value as corroborative evidence. Conversely, if it was not signed under duress, the acknowledgment tends to corroborate Mrs Dinh’s evidence, and, in addition, the rejection of Mrs Nguyen’s evidence on this issue may cast its shadow over the balance of her evidence. Was the acknowledgement signed under duress? [18] Mrs Nguyen said that on 2 September 2003, when shopping at Inala Civic Centre, she was intercepted by Mrs Dinh, who physically “dragged” her by the arm to her jewellery shop. Mrs Dinh’s husband, Jeremy Williamson, and his brother, a Mr Hung, were at the shop. She said she was told she would not be allowed to leave the shop until she signed the acknowledgment of debt. She said she was -- 6 of 9 -- 7 fearful of her safety. She said threats were directed at both her business5 and herself.6 [19] The acknowledgement had been drawn up by a solicitor (a Mr Nguyen) for Mrs Dinh. Mrs Dinh had presented it to Mrs Nguyen some days before 2 September 2003. Mrs Nguyen in turn consulted her solicitor about the acknowledgment.7 She subsequently told Mrs Dinh she would not sign the document because she objected to a term levying a penalty of 10 per cent on any late payments.8 At trial, she said she objected to signing the document because of the excessive interest charged.9 [20] Both Mrs Dinh and Mrs Nguyen are self-made businesswomen. By 2 September 2003, Mrs Nguyen had refused to sign the acknowledgment once. She had also obtained legal advice on the original form of the acknowledgment, and communicated her dissatisfaction with the penalty provision to Mrs Dinh. In response, the penalty provision was removed. As far as the evidence reveals, to that point she had not communicated any objection to the proposed amount of indebtedness ($75,000) in the acknowledgement or to the idea of a formal acknowledgment of debt. On my own subjective assessment of her personality, I think she would not readily succumb to pressure. [21] The threat to her business was essentially a threat to create a disturbance (or disturbances) at her restaurant. The immediate threat to her was not to allow her leave the shop until she signed the acknowledgement of debt. 5 T45 lines 8-10, T54 lines 20-25. 6 T51 (“They said I owed them money, I must pay them, otherwise I can’t leave Queensland.”) 7 T51 line 25. 8 T44 lines 7-10. 9 T55 line 10. The difference between the debt ($40,800) and the amount to the paid under the acknowledgment ($75,000) is $34,200. -- 7 of 9 -- 8 [22] I also note a number of inconsistencies between Mrs Nguyen’s evidence and an affidavit she provided in a pre-trial application on which she was examined. In the affidavit, she said the acknowledgment was signed after Mrs Dinh asked her to come over to her jewellery shop at around midday on 2 September. In evidence, she said Mrs Dinh dragged her by the arm to the jewellery shop at around 5 in the afternoon. The adjustment in time from midday to late afternoon was to suggest that fewer people were in the shopping centre to observe her virtual abduction. The inference I draw from these variations is that Mrs Nguyen is prepared to colour her evidence if she thinks it strengthens her argument. [23] Mrs Dinh’s case is that she withdrew the $75,000 from her home loan mortgage account. On her evidence, the acknowledgement of debt for $75,000 reflects the fact that a total of $75,000 was advanced to Mrs Nguyen. On the alternative account, the correspondence between the home loan withdrawal and the amount on the acknowledgment of debt is a coincidence arising because the amount of interest unilaterally charged by Mrs Dinh was $34,200.10 The improbability of this coincidence tends to point towards the truth of Mrs Dinh’s account. Conclusion [24] The various features identified in the discussion point to the truth of the plaintiff’s evidence more than to the truth of the defendant’s evidence. At the heart of the view I have finally reached, however, is my own subjective assessment of Mrs Nguyen’s personality. I do not believe her evidence she signed the acknowledgement under the duress claimed. Doing my best also to stand back and assess the evidence fairly, I am satisfied on the balance of probabilities that the two sums of $25,000 and $50,000 were advanced to Mrs Nguyen. -- 8 of 9 -- 9 [25] I have considered Ms Conway’s written arguments, although I have not attempted to discuss each argument. Two matters should be mentioned. Firstly, although inconsistencies exist between the evidence of Mrs Dinh and Jeremy Williamson, my final view is that the inconsistencies are not significant. Secondly, I am satisfied the difference between the weekly amount specified in the body of the acknowledgement ($1,500) and the schedule ($1,000) is an error in the schedule and the acknowledgement is not uncertain. [26] As summary judgment has already been given for $17,000, the plaintiff is entitled to a judgment for $58,000. [27] Mr Thompson suggested that interest be allowed from a time half way through the payment period specified in the acknowledgement of debt (1 February 04). The acknowledgement of debt is dated 3 September 03; and the Claim was filed on 27 October 03. In these circumstances I agree with Mr Thompson’s suggestion. On this basis interest to 9 November is $5,233.56. $17,000 of the debt was paid on 10 November 04 Interest on the balance of $58,000 from 10 November 04 to judgment is $9,581.74. Total interest payable is $14,815.30. Order [28] Judgment to the plaintiff in the sum of $58,000 together with interest assessed at $14,815.30 10 The difference between the hui debt ($40,800) and the total claim ($75,000). -- 9 of 9 --