Modeca Investments Pty Ltd v Commonwealth Bank of Australia [2017] VSCA 203 (18 August 2017): Statutory demand, application to set aside, claim that offsetting claim exceeds debt, sections 420A, 459H and 459J of Corporations Act 2001

August 20, 2017

The Victorian Court of Appeal considered an appeal from an unsuccessful application to set aside a statutory demand in Modeca Investments Pty Ltd v Commonwealth Bank of Australia [2017] VSCA 203.  The issue was the question of offsetting claim and its value as far as the applicant was concerned.  Ultimately the question became whether the applicant could show there had been a breach of section 420A of the Corporations Act, most importantly whether the process could be successfully attacked.

FACTS

The alleged debt arose out of a loan agreement entered into between the Commonwealth Bank of Australia (“CBA”) and Read the rest of this entry »

Culve Engineering Pty Ltd v Apollo General Engineering (Aust) Pty Ltd (in liq) [2017] VSCA 182 (7 July 2017): power to make a substitution order, exercise of discretion, Rule 9.09 of the Civil Procedure Rules

July 23, 2017

The Victorian Court of Appeal in Culve Engineering Pty Ltd v Apollo General Engineering (Aust) Pty Ltd (in liq) [2017] VSCA 182 considered the scope and operation of Rules to permit a substitution order being made.

FACTS

The third applicant, Sandra Cerrato, was the executrix of the deceased estate of her father, Rocco Cerrato who . Mr Cerrato died on 14 August 2014 [1]. Prior to and in  2010 Mr Cerrato was a director of the first applicant, Culve Engineering Pty Ltd (‘Culve Engineering’), the second applicant, Tena Denham Nominees Pty Ltd (‘Tena Denham’), and the first respondent, Apollo General Engineering (Aust) Pty Ltd (in liquidation) (‘Apollo’) [2]. Ms Cerrato was joined as a defendant to this proceeding in her capacity as executrix in substitution for her father by an order made by an associate judge on 18 September 2015. She and the other applicants unsuccessfully appealed that decision to a judge in the Trial Division [3].

Prior to 21 April 2010 Apollo carried on Read the rest of this entry »

McDonald v Dods [2017] VSCA 129 (2 June 2017): Defamation, inference of publication on the internet, damages

June 11, 2017

In McDonald v Dods [2017] VSCA 129 the Victorian Court of Appeal considered the issue of inference of publication to unknown individuals who may have read a blog post.

It is an appeal from judgments of Bell J inDods v McDonald (No 1) [2016] VSC 200 (6 May 2016) and Dods v McDonald (No 2) [2016] VSC 201 (6 May 2016).

FACTS

The applicant, McDonald, was the administrator and author of the website ‘www.justice4tylercassidyjust15.com’ (the “website”) from December 2008 to October 2012 where he discussed the death of Tyler Cassidy by police shooting [3]. The respondent Read the rest of this entry »

Rescom Asia Pacific Pty Ltd v Reapfield Property Consultants Pty Ltd [2014] VSCA 92 & Foxhat Employment Service Pty Ltd v Deputy Commissioner of Taxation [2014] VSC 218: application to set aside statutory demands

July 6, 2014

In Rescom Asia Pacific Pty Ltd v Reapfield Property Consultants Pty Ltd and Foxhat Employment Service Pty Ltd v Deputy Commissioner of Taxation the Victorian Court of Appeal and the Supreme Court considered applications to set aside statutory demands in very different circumstances.

Rescom Asia Pacific Pty Ltd v Reapfield Property Consultants Pty Ltd

The applicant sought leave to appeal a decision of Randall AsJ dismissing an application to set aside a statutory demand.  The grounds of appeal included a failure to find there was a genuine dispute or offsetting claim [2].

FACTS

The statutory demand relates to a claim for commission on the sale of various apartments in Carlton. The vendor retained Rescom as the underwriter for the sale of the apartments.  It was a term of the retainer that in the event that the total sale price of the apartments did not reach a pre-determined level, Rescom would pay the difference to the vendor [6]. If the total proceeds exceeded the predetermined level the vendor would pay the excess amount to Rescom. If the total proceeds exceeded a pre-determined level by a certain amount, then the excess would be shared between Rescom and the vendor [7].

Rescom engaged Reapfield as its sole marketing agent in Singapore on terms which included a 5% commission on the transacted price of all sales within Singapore[8].  The Agreement referred to a price schedule in an Annexure A of the agreement.

There was, and is, a dispute between the parties as to contents of Annexure A to the agreement with there being two schedules, one referring to lower prices than the other. That said Randall AsJ found he did not need to determine which schedule was incorporated into the agreement for the purpose of determining the application. Focusing on the terms of the marketing agreement and on contemporaneous conduct [9] he found that the agreement did not impose an obligation on Reapfield other than to use all due care, skill and diligence.  There were no consequences for failure by Reapfield to achieve a particular price [10].

Regarding the contemporaneous conduct the Randall AsJ found [16]:

  • the vendor accepted offers made by purchasers procured by Reapfield and booking forms that set out the purchase price and were signed on behalf of Rescom [over the caption] “accepted by underwriter”
  • email correspondence to the effect that Rescom “appreciated the good job” and that Rescom was in the “midst of arranging payment as promised”.
  • text messages passing between Rescom and Reapfield accepting the invoice for the commissions claimed without complaint and advising that payment would be made when Rescom received draw downs “from equity partners.”
  • there were over 20 text messages where Reapfield sought payment and Rescom repeatedly promised to make payment.
  • No complaint was made about the invoice that set out the prices obtained for each of the apartments or the liability to pay the commission [17].

DECISION

The Court referred to and liberally quoted from the latest Court of Appeal authority on statutory demands, Troutfarms Australia Pty Ltd v Perpetual Nominees Ltd, handed down last year [3].  The key principles can be reduced to the following:

Wolfe v Permanent Custodians [2013] VSCA 331 (22 November 2013): CONSUMER CREDIT, unjust terms, unconscionability & duty to cooperate

November 24, 2013

The Court of Appeal in Wolfe v Permanent Custodians [2013] VSCA 331  considered issues of duty to co operate in the context of a contractual relationship and unconscionability by a creditor in recovery proceedings against a defaulting mortgagor.

FACTS

Permanent Custodians Ltd (“Permanent”) holds a first mortgage over a property in Pascoe Vale which secured a loan to Mr Wolfe and his former partner [1]. In 2008 there was default on the loan. In August 2009 Permanent obtained default judgment against Wolfe, a default judgment for the loan and for possession of the Property against his former partner and issued a warrant of possession. Eviction by the Sheriff was scheduled for the week commencing 4 December 2009 [4]. Wolfe  entered into an arrangement, on terms set out in a letter from Permanent’s solicitors on 1 December 2009 (the “1 December 2009 arrangement”)[5].

Those terms were, at [6],relevantly:

Lubura v Nezirevic [2013] VSCA 215 (4 September 2013): Application to set aside judgment obtained in default of appearance, Supreme Court (General Civil Procedure) Rules 2005 O 64 & County Court Civil Procedure Rules 2008 O 64A.

September 24, 2013

A standard brief for very junior barristers starting out has been to make application to set aside a judgment obtained in default of defence or appearance.  The gold standard case setting out the principles was, and to a large extent is, Kostakenellis v Allen.   Now the Court of Appeal in Lubura v Nezirevic [2013] VSCA 215 has considered the first element of the test for setting aside judgments, whether the applicant has a defence on the merits. While it is a unanimous decision each of Warren CJ, Osborn JA and Robson AJA each had separate reasons.

FACTS

The facts are most comprehensively set out in Robson AJA’s reasons.

Early in the morning of  Sunday 8 July 2007 the respondent and other friends attended at the Red Star bar in Pultney Street, Dandenong [30].  A fight broke out between two groups, one of which contained the respondent and the other containing the appeallent, both in the bar and outside on the street subsequently. The respondent was surrounded and assaulted by at least two males with bottles, receiving injuries including bruising and laceration to his ear and head, as well as a ruptured globe to his right eye. He lost sight in his right eye as a consequence of the assault. Other members of the group were also assaulted [31]. The appellant was initially charged with four counts: intentionally causing serious injury, and (as an alternative) recklessly causing serious injury, common assault, and affray.  On 25 November 2011, a fresh presentment was filed, with two charges to which the appellant pleaded guilty; assault of a person unknown to the Director of Public Prosecutions and affray [33].

On or about 30 August 2010 the Appellant received the writ in the civil proceeding brought by the respondent. The appellant says Read the rest of this entry »

Wilde & Anor v Morgan & Ors [2013] VSCA 250 (20 September 2013) : Mortgage, Default notice, Service, Effect of provision of a ‘new’ address Transfer of Land Act 1958 (Vic) section 113, doctrine of fair notice.

September 23, 2013

The court of appeal, per Hansen and Tate JJA, considered the operation of default notices, service and the doctrine of fair notice in Wilde & Anor v Morgan & Ors [2013] VSCA 250. It was an appeal from a decision of AsJ Derhham in Re: Art Pacific Pty Ltd; Wilde v Morgan & Ors [2013] VSC 330 (27 June 2013).

FACTS

The applicants sought orders, set out at [1], that:

(1) the appointment of the first and second respondents as agents for the third respondent by Deed of Appointment of Agents for Mortgagee in Possession dated 23 October 2012 (the Deed) under a mortgage of land between the second applicant and the third respondent was invalid;

(2) further or alternatively, the first and second respondents entry into possession or assumption of control of the land of the second applicant pursuant to the Deed was invalid.

The issue at the core of the hearing at first instance and on appeal was Read the rest of this entry »

Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd [2013] VSCA 158 (24 June 2013): Summary Judgment, section 63 of Civil Procedure Act

June 26, 2013

The Victorian Court of Appeal in Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd [2013] VSCA 158 considered the test for summary judgment under section 63 of the Civil Procedure Act 2010.

At [35] the Majority (Warren CJ and Nettle JA) stated the test as:

a) the test for summary judgment under s 63 of the Civil Procedure Act 2010 is Read the rest of this entry »

Violet Homes Loans Pty Ltd v Schmidt & Anor [2013] VSCA 56 (25 March 2013): unconscionable conduct

April 21, 2013

In Violet Homes Loans Pty Ltd v Schmidt & Anor [2013] VSCA 56 the Court of Appeal unanimously upheld the trial judge’s decision that a mortgage originator

FACTS

In Perpetual Trustees Australia Limited v Schmidt & Anor [2010] 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 [12].  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 [13].  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 [14].  The documents were provided to a finance broker, Medallion Finance Concepts (“Medallion”) who onforwarded them to Violet [16]. 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 [20].  At no time did anyone from Violet deal with Schmidt directly.

DECISION

Unconsionability

The Court found that “..recklessness, in the form of wilful blindness, may in some cases supply the necessary element of moral obloquy”[58].  The court said Read the rest of this entry »

360 Capital Re Limited v Watts & Ors [2012] VSCA 234 (4 October 2012):Changes to constitution, restrict ability of members to convene and conduct meetings, whether proposed changes adversely affecting members’ rights , section 601GC of Corporations Act 2001

October 11, 2012

The Victorian Court of Appeal in 360 Capital Re Limited v Watts & Ors [2012] VSCA 234 dismissed an appeal from a decision in Watts & Watts & Ors v 360 Capital Re Limited & Anor [2012] 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”).

FACTS

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 [4] :

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 »