ABL Nominees Pty Ltd v Brakatselos - [2012] VSC 594

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

S CI 2009 04750

ABL NOMINEES PTY LTD (ACN 106 756 521) (in its capacity as Trustee of the Lighthouse Warehouse Trust No 8 Environinvest Finance) and others	Plaintiffs
– and –
PETER BRAKATSELOS	Defendant

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JUDGE:	MUKHTAR AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	20 November 2012
DATE OF JUDGMENT:	10 December 2012
CASE MAY BE CITED AS:	ABL Nominees Pty Ltd and ors v Brakatselos
MEDIUM NEUTRAL CITATION:	[2012] VSC 594

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DEBTS AND CHOSES IN ACTION ― Equitable assignments ― Loan agreement ― Loan to enable participation in managed investment scheme ― First assignment by deed ― Second assignment not by deed ― Third assignment by sale and purchase procedure ― Related corporations ― Evidence of transfer of debt by book entries ― Sufficient evidence of intention to establish equitable assignment

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr C M Scerri QC with Dr O. Bigos	Allens
For the Defendant	No appearance

HIS HONOUR:

This undefended trial was conducted immediately after the proceeding of Primary Yield Finance Pty Ltd and ors v Philip Meyer.[1] The Court publishes this judgment simultaneously with the judgment in Meyer: see [2012] VSC 595. By their nature, the two cases are identical as claims by a lender, integral or available under the scheme, for recovery of a loan initially taken out by the defendant in order to apply for participation in a forestry managed investment scheme as a “Grower”. The original lender, Blackburn Pty Ltd is a plaintiff in both cases. There is the same first assignment of the debt to Environinvest Limited and the same second assignment to Primary Yield Finance Pty Ltd. But here, there was a third assignment to the first plaintiff, ABL Nominees Pty Ltd. All these companies, now under administration or receivership, are plaintiffs and pursue payment of the debt as a common cause. The borrower here, Mr Peter Brakatselos, invested in two Tasmanian Blue Gum forestry projects, namely, the Environinvest Eucalypt Project 1999 and the Environinvest Eucalypt Project 2000.
[1]S CI 2009 05451.

It is unnecessary to repeat the Court’s opening parts of the judgment given in Meyer which says something of these schemes so as to put the loan transaction in proper context, for these are “tax driven” investment projects. That judgment also exposes how Meyer and likewise how this case came to be decided as an undefended trial. This borrower suffered the same procedural downfall as a result of his non-compliance with a self-executing order, an outcome which was affirmed on two appeals. Like Meyer, the dominant question concerns proof of the advance of the loan moneys for the acquisition of allotments by the borrower in the plantation. In this case, there were two loan agreements under a separate prospectus. And like Meyer, all assignees and intermediate assignors are joined as plaintiffs. All plaintiffs are acting in congress and consent to judgment in favour…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2012] VSC 594
Decision Date: 10 December 2012

CaseChat Overview and Summary

In the case of ABL Nominees Pty Ltd v Brakatselos, the dispute was heard by the Federal Court of Australia. The primary issue concerned the validity of various assignments of a debt owed to ABL Nominees Pty Ltd by a company named 202 Pty Ltd. ABL Nominees Pty Ltd had initially assigned its debt to another party by way of a deed. Subsequently, the debt was assigned again, this time without a formal deed, and then assigned for the third time through a sale and purchase procedure. The case hinged on whether the subsequent assignments were validly executed, particularly in light of the relationship between the assignors and assignees and the nature of the evidence provided to demonstrate the assignments.

The court had to determine whether the second and third assignments were effective despite not being executed by deed, and whether the evidence provided was sufficient to establish an equitable assignment. This involved examining the nature of the relationships between the parties and the method by which the assignments were evidenced. The court was particularly focused on whether the book entries and other documentary evidence were sufficient to demonstrate the requisite intention to transfer the debt, given the absence of a formal deed.

The court found that the second and third assignments were validly executed despite not being by deed. The court held that the evidence provided, including the book entries and the circumstances surrounding the transactions, was sufficient to demonstrate the intention to transfer the debt. The relationships between the parties and the context in which the assignments occurred were also considered, leading the court to conclude that the assignments were indeed valid. Consequently, the court ruled in favour of ABL Nominees Pty Ltd, affirming the validity of the assignments and rejecting the arguments put forward by the defendant.

The final orders of the court confirmed the validity of the assignments and dismissed the defendant's claims. The court's decision clarified the circumstances in which an equitable assignment can be established and the types of evidence that can suffice to demonstrate the necessary intention to assign a debt. This ruling provides important guidance for parties involved in similar transactions, particularly regarding the requirements for valid assignments outside of formal deeds.

Orders