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 »

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 »

 In a unanimous decision the High Court in Kakavas v Crown Melbourne Limited [2013] HCA 25 rejected an appeal by Harry Kakavas against Crown Casino in equity.  The court undertook a detailed analysis of the principles of unconscionable conduct and special disadvantage.

FACTS

Kakavas submitted, at [6], that the principles of Amadio applied, particularly that “..whenever one party by reason of some condition or circumstance is placed at a special disadvantage vis-à-vis another and unfair or unconscientious advantage is then taken of the opportunity thereby created”. He also submitted that Crown had constructive notice of his special disadvantage [150].

Crown submitted:

1. that Kakavas’ abnormally strong urge to gamble was not a compulsion which deprived him of the ability to make a worthwhile choice whether or not to gamble, or to continue to gamble, with Crown or anyone else [11];
2. Crown’s employees did not knowingly exploit the appellant’s abnormal interest in gambling. Kakavas presented as a successful businessman able to afford to indulge himself in the high stakes gambling in which he chose to engage [11]
3. Kakavas suffered no compensable loss [12]

DECISION

 The court undertook a detailed overview of the principle of equitable fraud.  When the considering the principles of equity enunciated in Amadio their Honours stated:

“..the task of the courts is to determine whether the whole course of dealing between the parties has been such that, as between the parties, responsibility for the plaintiff’s loss should be ascribed to unconscientious conduct on the part of the defendant.”

When seeking equitable intervention their Honours stated the following:

1. the principle which the appellant invokes Read the rest of this entry »

In Arhanghelschi v Ussher [2013] VSC 253 the Supreme Court, per Ferguson J, consider the claim of oppression and the construction of the unit trust deed.

FACTS

Dr Arhanghelschi, the Plaintiff, and the four defendants are radiologists who conducted a practice in Ballarat under the name Base Imaging Group Pty Ltd (“BIG”).  Through BIG the doctors successfully tendered for work from the Ballarat Health Services (“BHS”) in 2009. In June 2010 they established a unit trust which performed its obligations under the BHS contract. Each doctor held 20% of the units in the trust.

The four defendant doctors wished to part company with Arhanghelschi.   On 4 March 2013 three of the unit holders gave notice under the Deed  stating that they wished Arhanghelschi  to cease to be involved in the business with immediate effect [13]. On 7 March 2013 the defendants gave notice requiring the trust to convene a meeting [15]. That meeting took place on 15 March where the directors resolved that Arhanghelschi  resign as a director of BIG and from his position with BHS [17].  No reason was given at the meeting for the action taken but at trial the defendant’s evidence was that Arhanghelschi was unapproachable, he took long lunches, left early and arrived late, and finally was working for a Bendigo radiology group [19].

DECISION

Is there an obligation of good faith and reasonableness

Her Honour stated that a Unitholders Deed must Read the rest of this entry »

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 »

Griffiths J in Platinum Communications Pty Ltd v Computer Networks Pty Limited [2012] FCA 1260 considered an amendment to application to set aside a statutory demand.

FACTS

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 [1].  When the software was switched on the plaintiff suffered difficulties in many of its stores [7].  The plaintiff claimed Read the rest of this entry »

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) Introduction1
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 »

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 »

Last Friday, the New South Wales Court of Appeal in Roberts v Investwell Pty Ltd (In liq) [2012] NSWCA 134 considered the operation of equitable charges and mortgages in the context of unfair preferences.

FACTS

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 [3].  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 [4].  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  [6].

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 [7].

The relevant provisions of the agreement are set out at  [9], the most relevant of which was Read the rest of this entry »

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) [2012] VSC 146 and Alda Constructions Pty Ltd v Car Parking Solutions Pty Ltd [2012] VSC 145.

Business Structures Pty Ltd v D’Amico (t/a D’Amico Steel Works)

Facts

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 [5].

The demand claimed interest from the day after VCAT made the order until the day that the statutory demand was issued.

Decision

Had the demand been Read the rest of this entry »