A party alleging a loan transaction is a sham bears the onus of proving it by circumstantial evidence, but the inference of sham must exclude the inference of legitimacy as reasonably open, applying the Briginshaw standard commensurate with the gravity of a finding akin to fraud. The unexplained failure of a lender to call its sole director to give evidence of the making of the loan, combined with incomplete disclosure and unconvincing documentary evidence, supports the drawing of a Jones v Dunkel inference and strengthens the circumstantial case for sham. An executed settlement deed does not constitute binding evidence of a loan against non-parties to the deed.
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