Peter A Clarke

In Bernstein v Georgakakis & Anor Beach J analysed an application for removal of a caveat placed in August 2005 over property owned by a sole proprietor but arising out of an agreement between her husband and someone he was in business with.   It is a useful judgment in both restating principles but in dealing with equitable interests in this (unusual) fact situation.

His Honour sets out the principles at [5] & [6] regarding the principles applicable in removing caveats under section 90(3) of the TLA, namely:

• it is broadly analogous to determination of interlocutoryinjunctions – the power is discretionary;
• the caveator has the onus of establishing there is a serious question to be tried that he has an interest in the land; and
  
• the balance of convenience favours maintenance of the caveat until trial;

The evidence

The agreement, reproduced at [7], in this case is exhibit A as an example of what to avoid when seeking to make a claim for an equitable right over property. The agreement seemed to relate to an agreement between the Plaintiff/sole proprietor’s husband and a putative business partner regarding purchase of shares in a pet food business.  His Honour forensically analysed the many deficiencies in the agreement, at [17] – [26].  The first observation made was that it consisted of 5 recitals and no operative clauses. The problems included the agreement:

• requiring the husband to pay $3 million for 15% share in a company that had not been established at the time of the agreement;
• referring to the parties a creditor and debtor respectively.  Hardly consistent with an investment;
• in one part limiting the interest to $3 million, at another recital registering the interest for not less than $3million.

Unusually in such applications the deponents were cross examined and his Honour found that that sole proprietor never knew of this agreement.  In examining the enforceability of the agreement Read the rest of this entry »

Abraham Lincoln had good advice about writing a letter when angry. Write the letter, you will have a good time getting your feelings onto paper and feel the better for it. Leave it overnight. Return the next day, burn the letter and writer another. Good advice , bad for defamation lawyers. It should be mandatory for lawyers who put pen to paper in anger.

There can be a fine line between being forthright and acting without fear or favour on behalf of one’s client and being offensive, provocative or, the using the catch all phrase, bringing the profession into disrepute. The Full Bench of the ACT Supreme Court considered this question in DAVID LANDER v COUNCIL OF THE LAW SOCIETY OF THE AUSTRALIAN CAPITAL TERRITORY, The court reviewed a decision of the Legal Practitioners Disciplinary Tribunal that David Lander, had by statements made in a letter to the Chief Executive of the ACT Department of Education and Training was guilty of unsatisfactory professional conduct.

The letter (republished in full at par 4) leaves very little need for explanation. The following extracts demonstrate why it prompted a complaint Read the rest of this entry »

In Sopov & Ors v Kane Constructions Pty Ltd the Court of Appeal again traverses the well worn path of applications for stay of execution. The applicants sought a stay of a Court of Appeal decision pending a special leave application to the High Court. I most recently analysed the approach to stays by the Court of Appeal in my post on Gangemi v Osborne.

In this proceeding the applicants/appellants sought to distinguish a stay application to the High Court from other stay applications, submitting that the former did not require special or exceptional circumstances (par 45). The other bases for the application, which constituted exceptional circumstances were:

• the applicants did not have the resources to pay the judgment debt and their accountant said they would face bankruptcy if the orders were enforced. This meant they could not prosecute their appeal (par 45);
• there was a substantial prospect that special leave would be granted (par 46);and
• the respondents had already received substantial monies (par 46)

At paragraphs 52 & 53 their Honours restated the well settled proposition that the principles applying to stays pending a High Court special leave applications do not differ from other stay applications, stating: Read the rest of this entry »

Prolonged delay between issue and hearing on a damages/liquidated sum claim often means a significant interest component in a final award for a successful plaintiff. That can be the subject of a significant argument and separate determination, as the Court of Appeal did in Giller v Procopets (No 2) [2009] VSCA 72 and, a case I was and remain involved in, Walker & Anor v Hamm & Ors (No 2) [2009] VSC 290. Both decisions carefully and clearly set out the applicable principles associated with the award of interest and when delay or other factors justify adjusting the period of time over which interest should be calculated and/or varying the rate.

In Kalenik v Apostolidis & Ors (No 2) Hargrave J again considered those principle. The default position is

“..interest ‘must’ be ordered for the whole of the period after the issue of the writ unless ‘good cause Read the rest of this entry »

Today’s Sydney Morning Herald is doing the meltdown thing about a plaintiff, Liskula Gentile Cohen,  successfully forcing Google to provide identifiers of a blogger.  The ruling enables  Cohen to  identity the blogger that described her as a skank and an old hag.  Actually the blogger said:

“I would have to say the first-place award for ‘Skankiest in NYC’ would have to go to Liskula Gentile Cohen,” the anonymous blogger wrote.

“How old is this skank? 40 something? She’s a psychotic, lying, whoring, still going to clubs at her age, skank.”

Very blogspeak.  Cohen is planning on suing.  In the Australian context there would be some interesting pleading challenges if one was to run a justification defence.  But the US laws are far more difficult for the plaintiff, particularly if Cohen is regarded as a public figure.  Cohen has apparently already made contact with the blogger by phone.  They know each other.

The Times on line (UK) has run a similar theme to the Australian Press reports with  Vogue model Liskula Cohen wins right to unmask offensive blogger, but it should know better.  It identified Richard Horton, the Night Jack blogger, months ago and fended off his attempt to maintain anonymity publish his details prompting a breathless analysis in June under the banner Analysis: bloggers can no longer be sure on anonymity,  The decision, by Mr Justice Eady, of The Author of a Blog v Times Newspapers Limited refusing an injunction to protect a blogger’s anonymity is hardly ground-breaking law.

There has never been a separate stand alone right to unmask/identify a blogger.

The interlocutory decision of the Manhattan Supreme Court sets no precedent.  The case involves long established principles Read the rest of this entry »

In Friend v Brooker [2009] HCA 21 the High Court, in again taking issue with the New South Wales Court of Appeal, has undertaken a useful review of equitable principles vis a vis co ordinate liability. It has again opted for a stricter construction of equitable principles.

Facts (pars [10] – [ 37])

The facts are quite prosaic and depressingly familiar for those in small business. The Plaintiff/Respondent (Brooker) and Defendant/Appellant (Friend) establish an engineering business together, operating through a company. The Company performs a large job for the sum of $2.5million, in this case for a Council. The account is disputed, at least in part. This results in a liquidity crisis made all the more precarious because the Company’s indebtedness was secured by mortgages over Brooker and Friend properties. Brooker turns to a third party, a friend, for finance. The friend, through a company, loans Brooker $350,000 securing it with a mortgages over properties owned by Brooker family members as well as a guarantee by Brooker. Of the sum lent $330,000 was applied to discharge the Company’s debts. The Council ultimately made payment of a significant amount of the monies outstanding, $900,000, to the company as per a settlement. Brooker, not surprisingly, wants to apply that sum to his outstanding indebtedness which had blown out to $1.1million.

The trial judge dismissed Brooker’s claim and found there was no agreement. The Court of Appeal found, by a 2 – 1 majority, that Friend was liable in equity to contribute though on slightly differing grounds. The President found there was a common obligation arising out of the facts while McColl found there was a fiduciary obligation which required each director to meet an equal share of the capital contribution.

The Decision

Per French CJ, Gummow, Hayne & Bell.

The majority, in a comprehensive analysis, stated that in contribution matters equity is concerned with the equality of exposure of obligers (debtors) to an obligee (creditor). Equity intervenes to ensure that the debtors share a common burden, for example where a creditor seeks to recover only against one debtor, but not where all the obligers may derive some benefit. For equity to apply there must be a co ordinate liabilities regarding a debt (pars 38 & 39). The Court made it clear Read the rest of this entry »

Justice Beach continues to set a cracking pace in the judgment reaching and decision writing stakes with his, now typically, clearly written decision in C-Tech Laser Pty Ltd & Anor v Truong [2009] VSC 229 (15 June 2009) , and appeal from the Magistrates Court. Beach J together with the other recent appointments Judd, Vickery and Davies produce clear, concise and decisive judgments, much like Gordon J of the Federal Court.

In C-Tech Beach J considers the elements in a malicious falsehood claim. Malicious falsehood (also known as injurious falsehood) is not often pleaded. There was often no good reason to plead it because the facts generally supported a claim in defamation. The advantage of relying upon defamation was that it is actionable per se; with damages being at large. Further there is not need to prove malice in defamation. The reforms to Defamation with the Defamation Act 2005 means that, under section 9, most corporations are precluded from suing in defamation. With the amendment to the defamation law (in the main a great improvement) pleading malicious falsehood is a legitimate response to a tortious wrong. The issue of malice still provides evidential challenges however often evidence of the accompanying or subsequent behaviour of the putative defendant can be relied upon to draw that inference.

The facts

The Appellant’s causes of action were malicious falsehood and unlawful interference with business.

The Appellant pleaded Read the rest of this entry »

I had the pleasure of listening to Robert McClelland addressing the Commercial Bar last night.  It wasn’t a bad address (reproduced below) about what wonderful things he has in mind for litigation in the federal sphere. It even got a report in today’s Australian.  While he is a member of Cabinet he doesn’t appear to be a driving force (at least in public) in this government.  That place seems to be reserved for the  Swann, Tanner, Gillard, Faulkner, Albanese with wonderkids like Bowen and Arbib rushing up.  He is almost a cookie cut out of a down to earth hard practical member of the NSW Right. 

These days the Attorney General’s role is very much in the second rank.  It was not always thus.  Up until the 1960s the role was occupied by very serious political players including Alfred Deakin, Billy Hughes, John Latham Robert Menzies, Doc Evatt, Garfield Barwick and Tom Hughes with not a few ascending to the High Court: Isaacs, Latham, Evatt (pre AG), Barwick and Murphy.  In the last 20 years the position has been filled by some notables but generally stolid types.  The one serious positive about McClelland is that he has been in the litigation trenches and knows how the system operates.

Here is the speech: Read the rest of this entry »

Yesterday’s Federal Court decision in Grant Thornton Services (NSW) Pty Limited v St. George Wholesale Distributors Pty Ltd (No 2) throws up both a curious factual situation but the relatively little considered section 459(S) of the Corporations Act 2001. It is also a salient and sombre lesson in how to run an application.

Facts

Grant Thornton Services (NSW) Pty Ltd (“Grant Thornton”) provides accounting services.  It provided those services to the “Paul’s Warehouse” group of companies.  St George Wholesale Distributors Pty Ltd (St George) is part of that group but unlike other companies in that group it had net asssets.  Grant Thornton issued invoices on St George totalling $91,305.50. When the invoices were not paid Grant Thornton issued a statutory demand.  St George neither paid the sum nor applied to set aside the demand.  When St George found itself the subject of winding up application it roused itself to apply for leave to oppose the application on the basis that there was a genuine dispute. Leave is required because, per section 459 (S), St George could have earlier applied to set aside the statutory demand because there was a genuine dispute.

The issues

Section 459(s) (pars [7]  – [10])

To get leave section 459(s) requires that a court is satisfied that the ground is material to proving that a company is solvent.

In my experience there is a growing tendency of legal representatives copying letters to their opposing numbers to the court when there is a judge allocated to a proceeding.  The Internet makes that feasible and an easy operation.  There is also a tendency to correspond with a judge’s associate, copying the other side.  Both practices are fraught.  Courts try to be flexible and the assistance by some associates in facilitating consent orders is a terrific example of marrying technology with being responsive to parties needs.  The cost and time savings in not having to attend to get an adjournment or the worry in whether a fax has got to the court in time to adjourn a date off is significant.

But there is a limit and there is propriety………….and Singh v Secretary, Department of Employment and Workplace Relations is a salutory lesson in overstepping the line.  

The Full Court’s commentary Read the rest of this entry »