April 21, 2013
In Violet Homes Loans Pty Ltd v Schmidt & Anor  VSCA 56 the Court of Appeal unanimously upheld the trial judge’s decision that a mortgage originator
In Perpetual Trustees Australia Limited v Schmidt & Anor  VSC 67 the trial judge, J Forrest J, found that Violet Homes Pty Ltd (“Violet”) had acted unconscionably and in breach of the general law, section 51AC of the Trade Practices Act and section 12CB of the Australian Securities and Investment Commission Act 2001.
In 2003 the Plaintiff (“Schmidt”) responded to an advertisement which claimed an investment of $40,000 in syndicate would lead to a net return of $80,000 within 12 months. Schmidt range the number given and spoke to a Mr Maddocks (“Maddocks”). In next month he invested $80,000 in the syndicate. obtained a line of credit from Perpetual Trustees Australia Ltd . In early 2004 Maddocks pursuaded Schmidt to make further investments. Schmidt was unable to borrow from his bank, the Bank of Melbourne, because he was a pensioner who had no capacity to repay . Maddocks arranged a loan for Schmidt from Perpetual, preparing the loan application and income declaration. The documents contained false information, as to Schmidt’s employment situation and his annual income. Schmidt did not provide the false information but signed the documents without reading them . The documents were provided to a finance broker, Medallion Finance Concepts (“Medallion”) who onforwarded them to Violet . Responding to querries by Ms Bonnici a credit officer at Violet, including a failure to provide an ABN, raised Maddocks prepared an amended the application and had Schmidt sign it . At no time did anyone from Violet deal with Schmidt directly.
The Court found that “..recklessness, in the form of wilful blindness, may in some cases supply the necessary element of moral obloquy”. The court said Read the rest of this entry »
December 19, 2012
Griffiths J in Platinum Communications Pty Ltd v Computer Networks Pty Limited  FCA 1260 considered an amendment to application to set aside a statutory demand.
The plaintiff, a retailer, and the defendant, a software provider, entered into an agreement whereby the plaintiff would use the defendant’s software under licence and receive related services for payment . When the software was switched on the plaintiff suffered difficulties in many of its stores . The plaintiff claimed Read the rest of this entry »
December 11, 2012
Lord Neuberger gave a speech to the UK Association of Jewish Lawyers on 28 November titled Privacy in the 21st Century.
It is an excellent consideration of the history of privacy protections in the UK and a thoughtful analysis of future challenges. It should be required reading for those with an interest in privacy and privacy related jurisprudence.
It provides, absent citations:
1. Good evening. It is a pleasure to have been asked to give tonight’s lecture. Privacy is a subject which seems to be forever topical. It excites (in both senses of the word) public discussion, while demanding considered reflection. And it raises many difficult and, often, controversial questions. Is privacy a value which society should protect? If so, to what extent? Is protection of privacy a fetter on freedom of expression? If so, can and should a balance be struck between them? And if so, what type of balance? Should, for instance, freedom of expression always trump privacy, as it is sometimes suggested is the position in the United States? A suggestion, I may add, which ignores a variety of US statutes and constitutional provisions which protect certain aspects of privacy to varying degrees, subject to the First Amendment protection of freedom of speech and expression.
2. And is privacy a value which is, on deeper analysis, not inimical to or a fetter on freedom of expression: is it actually a necessary and vital aspect of freedom of expression? Or should we maintain the straightforward and generally held view that the two are wholly distinct, indeed often in conflict?
3. These are all difficult questions. They go to the heart of issues concerning Read the rest of this entry »
October 11, 2012
The Victorian Court of Appeal in 360 Capital Re Limited v Watts & Ors  VSCA 234 dismissed an appeal from a decision in Watts & Watts & Ors v 360 Capital Re Limited & Anor  VSC 320 which held modifications to the 360 Capital Fund’s constitution were invalid for want to compliance with section 601GC(1)(b) of the Corporations Act 2001 (the “Act”).
The 360 Capital Industrial Fund (“360 Capital”) is a managed investment scheme under Chapter 5C of the Act. There are 180.63 million units in the Fund. The Constitution of the Fund relevantly provides, at  :
1) Clause 5.1(a): The Trustee could only issue units in accordance with clause 5 and subject to the Constitution.
2) Clause 5.2(a): The Trustee could not grant Options unless the Trust were Listed.
3) Clause 5.4: New Units were required to be issued at a price determined in accordance with clause 5.4.
4) Clause 13.5(a): An Option did not confer on the Optionholder any interest in the Fund.
On 31 May 2012 the directors of 360 Capital executed a Supplemental Deed Poll which Read the rest of this entry »
May 29, 2012
Last Friday, the New South Wales Court of Appeal in Roberts v Investwell Pty Ltd (In liq)  NSWCA 134 considered the operation of equitable charges and mortgages in the context of unfair preferences.
In June 2001 the Respondent (“Investwell”) purchased land in Marourabra to develop home units using its own funds, monies advanced from prospective purchasers and a loan from a credit union. The Appellant (“Roberts”) was a director and shareholder of Investwell . In April 2002 it became apparent that there was a shortfall in funding to complete the project. Roberts entered into an agreement whereby he agreed to use his best endeavours to provide further funds and security for the project . On the sale of units the debt with the credit union was discharged leaving a balance of $164,306.83 which was paid to Roberts on the basis that he was a creditor ( not in issue) of the company in that amount. It was not in issue that when the payment was made Investwell was insolvent .
An order for the winding up of Investwell was made on 12 March 2007. Investwell and the liquidator brought proceedings against Roberts claiming money he received was a voidable transaction .
The relevant provisions of the agreement are set out at , the most relevant of which was Read the rest of this entry »
April 23, 2012
Associate Justice Gardiner recently considered applications to set aside statutory demands in Business Structures Pty Ltd v D’Amico (t/a D’Amico Steel Works)  VSC 146 and Alda Constructions Pty Ltd v Car Parking Solutions Pty Ltd  VSC 145.
Business Structures Pty Ltd v D’Amico (t/a D’Amico Steel Works)
The sum in the demand comprised a judgment plus interest on the judgment. The demand was not accompanied by an affidavit verifying it pursuant to section 459E(3) of the Corporations Act 2001. A VCAT order, filed in the Magistrates’ Court pursuant to section 121 of the Victorian Civil and Administrative Tribunal Act 1998, is enforceable as a monetary order. There was no genuine dispute that the sum the subject of the demand is due and payable .
The demand claimed interest from the day after VCAT made the order until the day that the statutory demand was issued.
Had the demand been Read the rest of this entry »
April 12, 2012
Today Justice Beach, in Barrow v McLernon & Anor  VSC 134 handed down a very interesting and useful decision regarding discovery and the operation of section 27 of the Civil Procedure Act. It is an appeal from a decision of an Associate Justice.
The Plaintiff is suing Hugh McLernon and IMF (Australia) Limited for defamation arising out of the publication on 30 May 2011 of an email and two pdf attachments . The Plaintiff wishes to use documents discovered in this proceeding in support of issuing other proceedings, also a cause of action in defamation . Five documents discovered constitute Read the rest of this entry »
December 14, 2011
In recent decisions of Sportsco Pty Ltd v Singh Group Pty Ltd (No 2)  VSC 576 (per Ferguson J) and BKW Investments Pty Ltd v Training Connect Limited  FCA 1314 (per Cowdroy J) the courts considered applications to set aside statutory demands. In Sportsco the court, hearing an appeal from an Associate Justice, refused to set aside the application. In BKW the court set aside the application.
Sportsco Pty Ltd v Singh Group Pty Ltd (No 2)
The underlying dispute related to the purchase of a franchise business. Singh, the purchaser, submitted that the statutory demand on Sportsco for $70,500 was a refundable deposit under the franchise agreement. Sportsco, the vendor, applied to set aside the demand claiming there was a genuine dispute concerning the debt and that it had an offsetting claim. Singh alleged there was an agreement that the money was refundable if it was unable to obtain finance for the franchise business. Singh did not obtain finance. While Singh was provided with an an offer to lease premises from which the franchise would operate it was never executed by Singh. Sportsco claimed there was a dispute as to what constituted the agreement and whether the agreement was subject to finance. It also claimed Singh was liable to pay a franchise royalty fee of five years as a consequence of the breach and was liable for damages of approximately $300,000.
Ferguson J referred to TR administration proprietor Ltd V Frank marketing and Sales Brochure Ltd as support forthe proposition that Read the rest of this entry »
June 29, 2011
In Australian Securities and Investments Commission v Healey Middleton J found against the directors of Centro Properties Limited. It is a very long and detailed decision which provides an excellent summary of the obligations of directors.
ASIC alleged that the approval of the consolidated financial accounts of Centro Property Limited. Centro Property Trust and Centro Retail Trust for the financial year ending 30 June 2007 contravened sections 180(1), 344(1) and 601FD(3) of the Corporations Act 2001. Those contraventions included failing to disclose $1.5billion of short term liabilities of Centro Property and $500 million of Centro Retail by classifying them as non current liabilities and failing to disclose guarantees of short term liabilities of an associated company of about US $1.75 billion that had been given after the balance date (see  for a detailed summary of the issues). Middleton J found that those matters were well known to the directors or, if not well known to them, should have been  & .
Middleton J found, at , the directors failed “..to take all reasonable steps required of them, and acted in the performance of their duties as directors without exercising the degree of care and diligence the law requires of them.” His consideration of the facts with respect to each director is found at ( – ). It is too extensive to comment upon here. The focus of this post is on the legal principles enunciated by Middleton J.
Middleton J highlighted the consequences of the breaches and why they are significant when he said, at :
This proceeding is not about a mere technical oversight. The information not disclosed was a matter of significance to the assessment of the risks facing CNP and CER. Giving that information to shareholders and, for a listed company, the market, is one of the fundamental purposes of the requirements of the Act that financial statements and reports must be prepared and published. The importance of the financial statements is one of the fundamental reasons why the directors are required to approve them and resolve that they give a true and fair view.
Middleton j restated the obligations and responsibilities of a director as: Read the rest of this entry »
June 7, 2011
In Cohen v State of Victoria Nos 3 (“Cohen”) Forrest J ordered indemnity costs against solicitor for the plaintiff, Oldham Naidoo, arising out of the application by the defendants in Cohen v State of Victoria No 2 which resulted in the proceedng being struck out as an abuse of process (which I reviewed here).
The relevant conduct upon which the court exercised its discretion is set out at :
(a) the issuing of the proceeding on 24 December 2008 in the name of Dr Cohen without obtaining his instructions or authorisation to do so;
(b) the maintenance of the claim (for nearly two years) in the name of Dr Cohen without any communication to him advising that he was the named representative plaintiff and therefore the subject of a number of obligations including that imposed by s 33ZD of the Supreme Court Act 1986 (Vic);
(c) the incurring of a number of costs orders against Dr Cohen – none of which were brought to his attention;
(d) the making of an allegation in the statement of claim central to Dr Cohen’s “claim” which, upon any reasonable investigation, was demonstrably false.
The key issues for consideration was whether there should be an award of costs against a legal practitioner acting without the authority of the client and, if so, whether to grant those costs on an indemnity rather than a party/party basis. In support of the former proposition Forrest J referred to the English case of Fricker v Van Glutten where his honour Read the rest of this entry »