Private Loan Contract Dispute: When a “Rescue” Advance of AUD $300,000 Is Recast as a “Gift”, How Does the Court Determine Contract Formation, Variation, and the True Debt?

Based on the authentic Australian judicial case Kempe v Grine [2025] NSWDC 227 (File No 2024/00263563), this article disassembles the Court’s judgment process regarding evidence and law. It transforms complex judicial reasoning into clear, understandable key point analyses, helping readers identify the core of the dispute, understand the judgment logic, make more rational litigation choices, and providing case resources for practical research to readers of all backgrounds.

Chapter 1: Case Overview and Core Disputes

Basic Information

Court of Hearing: District Court of New South Wales
Presiding Judge: Gibson DCJ
Cause of Action: Contract and debt recovery arising from an alleged loan, including interest, and disputes as to whether the advance was a loan or a gift, and whether terms were varied
Judgment Date: 23 June 2025
Core Keywords:
Keyword 1: Authentic Judgment Case
Keyword 2: Private loan dispute
Keyword 3: Loan versus gift
Keyword 4: Contract formation without signed original
Keyword 5: Contract variation by conduct
Keyword 6: Witness credibility and contemporaneous documents

Background

A Plaintiff advanced AUD $300,000 to the Defendant in late 2018 in circumstances of personal vulnerability and financial constraint. The Defendant used the funds in connection with a food business venture. Years later, after repayments became irregular and then ceased, the Plaintiff pursued repayment of the principal and interest said to be fixed by a written loan agreement. The Defendant resisted liability by asserting, in substance, that the money was not repayable in the way the Plaintiff claimed: it was said to be a gift, or alternatively no binding agreement was reached, or alternatively the agreement was changed later so that a much lower interest rate applied. The dispute became a test of how a court reconstructs what truly happened when the “original signed document” is not produced, and when key witnesses are self-interested, inconsistent, or rely on reconstructed stories rather than contemporaneous records.

Core Disputes and Claims

What the Court was required to determine was not merely whether money changed hands, but what legal character it carried when it changed hands.

Core disputes included:

1. Contract formation: Did the Plaintiff and Defendant reach a binding agreement for a loan, even if the Court did not have a signed original in evidence?
2. Loan or gift: Was the AUD $300,000 advanced as a repayable loan or given gratuitously?
3. Terms: If there was a loan, what were the operative terms, particularly the interest rate and repayment date?
4. Variation: Were the terms later varied, especially by reducing the interest rate from 20 per cent per annum to 5 per cent per annum?
5. Quantum: What was the correct amount owing after accounting for repayments and interest calculation methodology?

Relief sought:

• Plaintiff: Judgment for the debt said to be owing under the loan agreement (principal and interest), plus costs.
• Defendant: Dismissal of the claim or, in the alternative, a substantially reduced liability said to be consistent with a different understanding of the arrangement.

Chapter 2: Origin of the Case

Content

The relationship between the parties was not a classic arm’s length commercial transaction between strangers. It was personal, informal, and built on proximity: shared community ties, work involvement, and a period where the Plaintiff stayed at the Defendant’s home. That personal texture mattered because it created fertile ground for later re-labelling: what begins as “help” can later be argued to be “a gift”, and what begins as “we will do it properly” can later be attacked as “there was no agreement”.

The Plaintiff’s context at the time of the advance was central. She was navigating a difficult divorce and property settlement. The AUD $300,000 represented the whole of her property settlement proceeds. In practical terms, it was her financial lifeline: the kind of sum that, in ordinary human experience, is not casually relinquished without clear safeguards.

At the same time, the Defendant was involved in operating and expanding a food business. Business plans, debts, and the need for a new outlet created a classic urgency narrative: bills, expansion, and a request for capital framed as necessary to keep the business alive and moving.

Detail Reconstruction

The conflict did not erupt in a single moment. It formed in stages:

1. The request: The Defendant approached the Plaintiff for financial assistance, initially at a lower figure, but the sum ultimately advanced was AUD $300,000.
2. The condition: The Plaintiff insisted that if the money was to be advanced, it would be by a contract drawn up.
3. The drafting: A draft loan agreement was prepared and communicated, and the Plaintiff received it before handing over a bank cheque.
4. The handover: The Plaintiff delivered a bank cheque for the full amount and expected a signed copy of the agreement to follow.
5. The early payments: Soon after, the Defendant made cash payments consistent with paying interest.
6. The breakdown: Over time, payments became irregular, the relationship deteriorated, and the Defendant’s narrative hardened into a denial that the Plaintiff was entitled to what was written in the agreement.

Conflict Foreshadowing

The decisive turning point was not the initial handover; it was what followed. The more time passed, the more the dispute shifted from “when will you repay?” to “there was never a loan on those terms”. That shift is a classic litigation pattern in informal lending disputes:

• When the borrower is paying, both parties often behave as if the loan exists.
• When the borrower cannot pay, the borrower’s incentives align with re-characterising the transaction.
• When the lender has no signed original in hand, the dispute becomes an evidence contest about what the parties agreed and how they behaved at the time.

This case demonstrates how the Court examines the moment of commitment, and then tests later stories against the hard edges of contemporaneous records.

Chapter 3: Key Evidence and Core Disputes

Plaintiff’s Main Evidence and Arguments

1. Draft loan agreement emailed before execution and advance
   The Plaintiff relied on a draft loan agreement that was sent by the Defendant to the Plaintiff on 2 December 2018. The Plaintiff’s case was that the signed agreement was in the same form as that draft, and that the bank cheque was handed over on that basis.

2. Bank cheque and banking records
   The Plaintiff’s evidence included that she obtained a bank cheque in favour of the Defendant for AUD $300,000 and physically handed it over shortly after receiving and reviewing the contract.

3. Text messages evidencing intention to document a loan
   The Plaintiff relied on text exchanges indicating the Defendant said a contract was being prepared and would be sent, and that the Plaintiff’s willingness to provide funds was tied to having a written agreement.

4. Post-contract conduct: payments consistent with interest
   The Plaintiff emphasised that, soon after the advance, the Defendant made cash payments in amounts close to what would be expected if interest at 20 per cent per annum were being paid.

5. Letters of demand and subsequent correspondence
   The Plaintiff relied on demand letters sent years later that set out the claim in a consistent manner and requested production of the signed agreement and repayment summaries, as well as the Defendant’s failure to provide those documents in response.

Core argument theme: even if the signed original could not be produced, the combination of contemporaneous documents and later conduct proved a binding loan agreement on the stated terms.

Defendant’s Main Evidence and Arguments

1. Loan versus gift
   The Defendant asserted that the money was either a gift or not owed as claimed.

2. Denial of agreement or signature
   The Defendant contended that the agreement was not signed or not agreed, and attempted to use that as a basis to deny contractual enforceability.

3. Variation: interest reduced to 5 per cent
   The Defendant asserted that, after discussions, the interest rate was reduced from 20 per cent to 5 per cent.

4. Destruction of documents in a house fire
   The Defendant asserted that much documentary evidence was destroyed in a house fire on 21 October 2021, contributing to the inability to produce banking records or the signed contract.

5. Reliance on accountants’ evidence and reconstructed narratives
   The Defendant relied on evidence from accountants who claimed they did not see the contract, and who offered accounts of what they were told about it rather than what they could verify from the document itself.

Core argument theme: the Plaintiff should not be able to enforce the claimed terms, either because there was no binding contract, or because later agreements replaced or altered those terms.

Core Dispute Points

1. The documentary anchor: a draft written contract was in circulation at the time the money was advanced. Was it the agreement?
2. The absence of a signed original: did it matter if the parties acted consistently with the contract?
3. The credibility contest: were later claims of gift and variation consistent with contemporaneous messages, emails, and payment behaviour?
4. The “variation” story: could the Defendant prove offer, acceptance, and consideration for a change to interest, and with sufficient certainty?
5. The quantification problem: how should repayments be applied, and how should simple interest be calculated?

Chapter 4: Statements in Affidavits

Content

In proceedings of this kind, affidavits are where parties attempt to lock in their narrative. The Court then tests that narrative against cross-examination and documents.

The Plaintiff’s affidavit narrative was structured around a coherent chronology: request, insistence on a contract, receipt of draft, signing, handover of cheque, and subsequent payments consistent with the contract.

The Defendant’s materials, by contrast, carried multiple alternative positions: gift, no agreement, different borrower, varied terms, and claimed offsets. In litigation, piling alternative narratives can be strategically tempting, but it carries a predictable risk: the Court may treat it as evidence that the Defendant is not anchored to a stable truth, but to a shifting defensive posture.

A key feature in this case was the Court’s attention to the affidavits of third-party witnesses aligned with the Defendant. Where affidavits appear word-for-word aligned, the Court considers whether they are genuine recollections or a curated script.

Strategic Intent

The procedural directions about affidavits serve a discipline function:

• They force parties to commit to a version of events.
• They make inconsistencies easier to expose.
• They enable the Court to assess whether witnesses are independent or coordinated.

In a dispute where the signed original document is not produced, the Court’s task becomes heavily dependent on reconstructing the real agreement from reliable evidence. Affidavits are helpful only insofar as they are consistent with contemporaneous documents and withstand cross-examination.

Chapter 5: Court Orders

Content

Prior to final determination, the Court’s procedural management focused on ensuring the case could be decided on a proper evidentiary footing. In a matter involving document disputes, typical pre-hearing directions include:

• Orders for the filing and service of evidence, including affidavits.
• Orders requiring production of documents and exchange of court books.
• Directions for submissions and outlines of argument.
• Case management steps to narrow issues, particularly around contract formation, alleged variation, and quantification.

The practical significance is that the Court expects parties to identify and produce the documents that either prove or disprove their key assertions. When a party cannot produce the documents said to exist, or offers only vague explanations, that failure becomes part of the evidentiary story.

Chapter 6: Hearing Scene: Ultimate Showdown of Evidence and Logic

Perspective

Strict, objective Third-Party Perspective.

Process Reconstruction: Live Restoration

The hearing was, in substance, a credibility trial. The Court was confronted with two competing reconstructions:

• The Plaintiff’s reconstruction: a loan agreement was drafted, sent, signed, and acted upon.
• The Defendant’s reconstruction: either no binding agreement existed, or the agreement was later altered, or the transaction was not a loan at all.

Cross-examination targeted the pressure points where a story collapses:

1. The document problem
   If the Defendant’s case depended on a different contract, a revised contract, or a later replacement agreement, the natural expectation is production. The absence of any signed or unsigned replacement document became a central weakness.

2. The payment behaviour problem
   If the interest rate was truly disputed from the start, why were early payments made at amounts closely resembling the contractual interest structure? The Court treated this as a powerful indicator that, at the time, the parties were proceeding on the contract as drafted.

3. The “house fire” explanation
   The Court assessed whether the fire explanation plausibly accounted for the absence of key documents. The Court’s reasoning reflected a practical approach: many of the documents said to be lost could typically be re-obtained from institutional sources such as banks or third parties, especially when litigation has commenced or been threatened.

4. Witness independence and scripts
   When witnesses aligned to the Defendant contradicted themselves, contradicted each other, or provided accounts inconsistent with emails, the Court treated those failures as material to credibility.

Core Evidence Confrontation

The most decisive confrontation was between:

• contemporaneous documentary evidence: text messages, emails about a draft loan agreement, demand letters, and evidence of payments; and
• reconstructed oral accounts: later claims of gift, variation, and illegality, often asserted without supporting documents.

In disputes about informal lending, courts frequently prefer contemporaneous communications because they are created before litigation incentives distort memory.

Judicial Reasoning

The Court’s reasoning turned on the logic of proof rather than speculation: the Court assessed what was more likely than not, using the internal consistency of evidence and the objective probabilities of human conduct.

The Court held, in substance, that the defendant’s position was “notable for the lack of documentation” supporting the asserted variations, and that the plaintiff’s version was supported by contemporaneous communications and a pattern of payments consistent with the pleaded loan terms.

Why that mattered: the Court treated the absence of a replacement contract, the failure to produce banking records, and the instability of the Defendant’s explanations as reasons to reject the variation and gift narratives. The Court treated the Plaintiff’s insistence on a written contract and the Defendant’s own act of sending the draft as powerful markers of intention to create legal relations.

Chapter 7: Final Judgment of the Court

Content

The Court entered judgment for the Plaintiff.

Orders included:

1. Judgment for the Plaintiff for AUD $593,666.21.
2. The Defendant to pay the Plaintiff’s costs.
3. Liberty to apply in relation to interest and costs.

The monetary figure reflected the Court’s approach to principal, interest, and credits for repayments, with the Court noting aspects of the quantification exercise and the Plaintiff’s calculation approach.

Chapter 8: In-depth Analysis of the Judgment: How Law and Evidence Lay the Foundation for Victory

Special Analysis

This case is jurisprudentially valuable not because it breaks new doctrinal ground, but because it demonstrates, in a highly practical way, how a court decides a loan dispute where the signed original is missing and the borrower raises multiple defences that depend on undocumented variations.

It illustrates several core judicial instincts in contract litigation:

• Contemporaneous documents are given substantial weight.
• Conduct after an agreement can prove contract formation and terms.
• A party who asserts variation carries a heavy evidentiary burden.
• Credibility is not determined by confidence; it is determined by consistency, probability, and documentary alignment.
• Courts do not accept “illegality” labels without legal substance and evidentiary foundation.

Judgment Points

1. Contract formation does not require a signed original if objective evidence shows agreement and performance
   The Defendant’s position that there could be “no valid contract” unless signed was rejected as misconceived. The Court approached contract formation by asking whether there was agreement on terms and conduct consistent with acceptance.

2. Loan versus gift is determined by objective probabilities and contemporaneous communications
   The Court considered it inherently implausible that a person would gift the whole of their property settlement proceeds to someone with whom they did not have a close relationship, especially in circumstances where a written contract was insisted upon.

3. Variation requires contractual discipline: offer, acceptance, certainty, and consideration
   The Court treated vague references to later agreements as inadequate. A variation story must be anchored in ascertainable terms and supported by proof of mutual assent and consideration, not merely by assertion.

4. Post-contractual conduct can be a decisive corroborator
   The early pattern of payments consistent with the interest structure of the written agreement supported the Plaintiff’s case. This is a practical lesson: payment behaviour can be more persuasive than reconstructed explanations.

5. Failure to call key witnesses can justify adverse inference
   Where a party does not call a witness who would be expected to clarify a contested issue, the Court may infer that the evidence would not have assisted that party. This case demonstrates how that reasoning can operate in a document-centred dispute.

6. Coordinated witness narratives undermine credibility
   The Court’s critique of aligned affidavits and inconsistent evidence demonstrates that the Court actively tests whether a witness is independently reliable or merely litigation-supportive.

7. Quantification is a legal and forensic exercise, not a rhetorical one
   The Court analysed calculation methodology, including whether payments should be treated as principal reduction or interest credit, and whether the Plaintiff’s approach benefited the Defendant. The outcome shows that even a successful party can have their calculation methodology scrutinised, but still succeed where the evidentiary foundation of the debt is established.

8. “Illegality” arguments fail without precise legal footing
   An assertion that a contractual interest rate is “illegal” is not a substitute for a pleaded and proven defence. The Court’s approach reflects a broader principle: legal labels do not carry weight unless tied to specific doctrine, evidence, and a coherent pathway to relief.

Legal Basis

Key legal principles applied or relied upon by the Court included:

• Contract formation by conduct and objective assent, including in circumstances where a formal signed instrument is not produced.
• The principle that a contract may be varied by conduct, but only where the requirements for a binding variation are met, including certainty and consideration.
• The approach to assessing variation claims as requiring proof, not conjecture.
• The method of drawing inferences from the failure to call a material witness, consistent with the Jones v Dunkel approach.
• The use of authorities addressing post-contract conduct and contract formation, and authorities criticising scripted, cut-and-paste affidavit evidence.

Comparable authorities referenced in the judgment included:

• Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153: contract variation by conduct principles.
• PRA Electrical Pty Ltd v Perseverance Exploration Pty Ltd [2007] VSCA 310; 20 VR 487: contract formation and acceptance by conduct even absent formalities.
• New South Wales Land and Housing Corporation v Diab [2015] NSWCA 133: variation by conduct framework.
• W & K Holdings (NSW) Pty Ltd v Laureen Margaret Mayo [2013] NSWSC 1063: consideration and enforceability limits for asserted contractual changes.
• Esanda Finance Corporation Limited v Atanasivska [2014] NSWDC 169: post-contract conduct supporting enforceability.
• Douglas v Mickhael & Ors [2023] NSWSC 979 and Girchow Enterprises Pty Ltd v Ultimate Franchising Group Pty Ltd (Final Hearing) [2023] FCA 420: credibility impact where affidavits appear coordinated and evidence integrity is compromised.

Evidence Chain

The Court’s conclusion can be expressed in the discipline of an evidence chain:

1. Intention and insistence on a contract: messages and surrounding circumstances show the Plaintiff required written terms.
2. Draft terms communicated before performance: a draft agreement was provided by the Defendant to the Plaintiff before the cheque was handed over.
3. Performance consistent with agreement: the Defendant accepted the bank cheque and made early payments consistent with the agreed interest structure.
4. Absence of supporting documents for defences: no credible replacement contract, no banking records substantiating offsets, and no documentary pathway to a 5 per cent variation.
5. Credibility findings: the Plaintiff’s evidence was accepted as frank and consistent; the Defendant and aligned witnesses were not treated as reliable.

Judicial Original Quotation

The Court held that even if a signed copy were not available, the parties’ conduct showed agreement on the terms of the draft loan agreement, and that the absence of a signature in that context did not mean no contract existed.

Why that was determinative: this statement is the keystone that neutralised the Defendant’s “no signature, no contract” posture. Once the Court accepted contract formation by conduct, the Defendant needed to prove a different agreement or a binding variation. The Court found that proof was not there.

Analysis of the Losing Party’s Failure

The Defendant’s failure was not merely legal; it was forensic.

1. Over-reliance on alternative narratives
   Gift, no agreement, different borrower, variation, offsets, illegality: each narrative required its own evidentiary and doctrinal support. The more narratives advanced without documents, the more the Court was invited to find inconsistency rather than truth.

2. Documentary vacuum where documents should exist
   A party asserting a contractual variation, a replacement agreement, or a repayment schedule must expect the Court to ask for the document. The failure to produce those documents, and the inability to credibly explain that absence, was fatal.

3. The improbability problem
   The Court weighed objective probabilities: it is improbable that a person would gift their entire settlement proceeds to a non-intimate friend while insisting on a written contract. The Defendant’s story could not overcome that.

4. Credibility collapse under cross-examination
   Inconsistent answers, implausible claims, and divergence from emails produced a pattern of unreliability. Courts decide contested facts by identifying the most reliable pathway, and the Defendant’s pathway fractured at multiple points.

5. Legal mischaracterisations
   Calling an interest rate “illegal” without pleading and proving a coherent doctrine was ineffective. The Court required legal precision, not slogans.

Implications

1. If you lend money privately, treat your future self as your client
   The problem is rarely goodwill at the beginning. The problem is proof at the end. If you structure your evidence early, you do not need to beg for fairness later.

2. The Court does not reward the loudest story; it rewards the most reliable one
   A consistent chronology supported by messages, emails, and payment behaviour will often outlive a confident denial.

3. Variation is not a feeling; it is a contract
   If you want to change a deal, you need clear terms, mutual assent, and a reason that the law recognises as consideration. Otherwise, the “change” tends to dissolve under scrutiny.

4. Paying like a borrower and later speaking like a recipient is a dangerous contradiction
   Your early conduct may become the most persuasive evidence against your later narrative.

5. Litigation is a mirror
   It reveals not only what happened, but how carefully you prepared for the possibility that trust might fail. Being legally prepared is not cynical; it is self-respect.

Q&A Session

1. If there is no signed original contract, can I still prove a loan in court?
   Yes, if you can prove agreement and performance through reliable evidence such as texts, emails, bank records, and conduct consistent with loan terms. The Court will look for objective indicators of assent and implementation.

2. What makes a “loan versus gift” dispute easier to win?
   Contemporaneous communications stating it is a loan, evidence of repayment or interest payments, and a plausible explanation of why a gift would be unlikely. Courts often assess objective probabilities, including whether the alleged gift makes sense in the parties’ circumstances.

3. Can parties legally change an interest rate after the fact by verbal agreement?
   A contract can be varied, including by conduct, but the variation must satisfy contractual requirements. The safer course is a written variation signed or clearly acknowledged. If it is only asserted later, without documents, it tends to be determined as unproven.

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Appendix: Reference for Comparable Case Judgments and Practical Guidelines

1. Practical Positioning of This Case

Case Subtype: Private Loan Agreement Dispute in a Small Business Funding Context
Judgment Nature Definition: Final Judgment

2. Self-examination of Core Statutory Elements

This case falls within Category ④ Commercial Law and Corporate Law.

Core Test: Contract Formation

######Step 1: Offer
You must identify whether one party made a clear commitment to be bound on stated terms. In private lending, an offer may be evidenced by messages stating that a contract will be drawn up, a draft agreement sent, or an explicit proposal of repayment terms and interest.

######Step 2: Acceptance
You must show that the other party accepted the offer. Acceptance can occur by signing, or by conduct that objectively communicates assent, including receipt of funds under the terms offered and commencing performance consistent with those terms.

######Step 3: Consideration
In a loan, the advance of money is consideration given by the lender. The borrower’s promise to repay, and to pay interest where agreed, is consideration moving back. Consideration need not be adequate, but it must be legally recognised and real.

######Step 4: Intention to create legal relations
In a commercial or quasi-commercial setting, intention is usually inferred. Where parties are friends, the Court examines whether the circumstances show the transaction was meant to be legally enforceable, including insistence on a written agreement, use of formal banking instruments, and structured repayment conduct.

######Step 5: Certainty and completeness of terms
The Court will examine whether key terms are sufficiently certain: principal, repayment timing, interest, and any contingencies. A draft written agreement often supplies this certainty even if a signed original is not produced.

Core Test: Section 18 of the Australian Consumer Law

In some disputes, parties attempt to frame communications as misleading or deceptive. The test is whether, in trade or commerce, conduct was misleading or deceptive or likely to mislead or deceive. In a private loan between individuals, it may be contested whether the conduct is in trade or commerce, and whether reliance and causation are proved. The risk tends to be higher where the advance is connected to a business venture and representations are made to procure funds.

Core Test: Unconscionable Conduct

This doctrine may be raised where one party claims vulnerability or exploitation. The test is whether one party took advantage of a special disadvantage of another to such an extent that the transaction is against good conscience. The assessment is fact-specific. The risk tends to be relatively high where there is clear vulnerability combined with pressure and lack of independent advice, but courts also require clear evidence and careful causal reasoning.

3. Equitable Remedies and Alternative Claims

If statutory or straightforward contractual pathways become contested, the following equitable and common law doctrines may become relevant.

Promissory or Proprietary Estoppel

Step 1: Clear and unequivocal promise or representation
You must identify a promise that is sufficiently definite. In lending disputes, an alleged promise may be “I will repay you” or “this is a loan on these terms”.

Step 2: Detrimental reliance
You must show you relied on the promise by acting to your detriment, such as advancing funds, foregoing other opportunities, or changing your financial position.

Step 3: Unconscionability
You must show it would be against conscience for the promisor to resile from the promise given the reliance and detriment.

Potential outcome: the Court may enforce the promise to the extent necessary to avoid the detriment, which can resemble enforcement of the loan obligation even where strict contractual proof becomes difficult.

Unjust Enrichment and Constructive Trust

######Step 1: Benefit conferred
The borrower received money, labour, or value.

######Step 2: At the lender’s expense
The benefit came from the lender’s assets.

######Step 3: Unjust factor
A basis exists making retention unjust, such as failure of consideration, mistake, or absence of a juristic reason.

Potential outcome: restitutionary relief, including repayment, or in rare cases a declaration of a beneficial interest in an asset if the facts support a constructive trust analysis. The risk tends to be higher where funds were used to acquire identifiable assets and the parties’ dealings indicate an expectation of repayment or ownership interest.

4. Access Thresholds and Exceptional Circumstances

Regular Thresholds

• Limitation periods
  A claim in contract is subject to limitation rules that can bar recovery if proceedings are commenced too late. The precise limitation framework depends on the jurisdiction and cause of action pleaded. The risk tends to be relatively high if a lender waits many years after default without taking formal steps.

• Jurisdictional threshold
  The Court must have jurisdiction by subject matter and monetary range. District Court jurisdiction is commonly engaged for substantial debt claims within its statutory monetary limits.

• Evidentiary threshold
  The party alleging a loan on specific terms must prove contract formation and the terms on the balance of probabilities. Where a signed original is missing, the risk tends to be higher, and the lender should expect the Court to demand contemporaneous corroboration.

Exceptional Channels

• Where a signed original is not available
  The Court may still determine the existence and terms of a contract based on contemporaneous documents and conduct. This does not guarantee success; it tends to depend on the strength of the surrounding evidence.

• Where a party claims documents were destroyed
  A court may scrutinise whether documents could be obtained from third parties. The risk tends to be relatively high for the party relying on “loss” if the court considers the loss explanation is used to avoid production.

Suggestion: Do not abandon a potential claim simply because you lack a signed original. Assemble the best evidence chain available: drafts, emails, texts, bank cheque documentation, repayment records, and contemporaneous notes. Courts frequently decide on the totality of the evidence rather than a single document.

5. Guidelines for Judicial and Legal Citation

Citation Angle

It is recommended to cite this case in legal submissions or negotiations involving:

• whether a private loan can be proved without a signed original agreement
• how post-advance conduct supports contract formation and operative terms
• how courts assess credibility and reject unsupported variation narratives
• how courts treat “loan versus gift” disputes using objective probability reasoning

Citation Method

As Positive Support:
When your matter involves an advance of money with a draft agreement, contemporaneous communications, and payment conduct consistent with the terms, citing this authority can strengthen the argument that a binding contract existed and the borrower’s later denials are to be assessed against objective evidence.

As a Distinguishing Reference:
If the opposing party cites this case, you should emphasise differences such as the absence of contemporaneous texts or emails, the absence of any repayment conduct consistent with the alleged loan terms, or the existence of credible signed variations that were produced and verified.

Anonymisation Rule:
When explaining the case in client materials, use procedural titles such as Plaintiff and Defendant, while retaining the case name and citation in formal legal references.

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Conclusion

This judgment demonstrates that private lending disputes are won by evidence discipline, not moral outrage. Where contemporaneous documents, objective conduct, and credible testimony align, the Court tends to determine that a loan was a loan, and that later attempts to rename it as a gift or an undocumented variation fail on proof.

Everyone needs to understand the law and see the world through the lens of law. The in-depth analysis of this authentic judgment is intended to help everyone gradually establish a new legal mindset: True self-protection stems from the early understanding and mastery of legal rules.

Disclaimer

This article is based on the study and analysis of the public judgment of the District Court of New South Wales (Kempe v Grine [2025] NSWDC 227), aimed at promoting legal research and public understanding. The citation of relevant judgment content is limited to the scope of fair dealing for the purposes of legal research, comment, and information sharing.

The analysis, structural arrangement, and expression of views contained in this article are the original content of the author, and the copyright belongs to the author and this platform. This article does not constitute legal advice, nor should it be regarded as legal advice for any specific situation.

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