Accordus Pty Ltd v Jones
[2018] WADC 29
•1 MARCH 2018
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS
LOCATION: PERTH
CITATION: ACCORDUS PTY LTD -v- JONES [2018] WADC 29
CORAM: DEPUTY REGISTRAR KUBACZ
HEARD: 14 FEBRUARY 2018
DELIVERED : 1 MARCH 2018
FILE NO/S: CIV 2589 of 2017
BETWEEN: ACCORDUS PTY LTD
Plaintiff
AND
DAMIAN THOMAS JONES
Defendant
Catchwords:
Practice and procedure - Summary judgment - Action on guarantee - Turns on own facts
Legislation:
Nil
Result:
Application allowed
Representation:
Counsel:
Plaintiff: Mr C Williams
Defendant: In person
Solicitors:
Plaintiff: Solomon Bros
Defendant: Not applicable
Case(s) referred to in judgment(s):
Cordinup Resorts Pty Ltd v Terana Holdings Pty Ltd (1997) 143 FLR 18
Deputy Commissioner of Taxation v Roget (No 2) [2014] WADC 25
Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87
Moscow Narodny Bank Ltd v Mosbert Finance (Aust) Pty Ltd [1976] WAR 109
Quantum Asset Management Pty Ltd v Love Properties (WA) Pty Ltd [2017] WASC 167
DEPUTY REGISTRAR KUBACZ: This matter came on for hearing on 14 February 2017 for the plaintiff's application for summary judgment filed on 11 October 2017. The plaintiff's application was supported by the affidavit of Justin Hyde dated 5 October 2017.
The defendant was initially represented however at the commencement of the hearing, his solicitors made an oral application to come off the record due to its relationship with the defendant breaking down the previous evening. I made orders removing the defendant's solicitors from the record and excusing them from the hearing.
For the substantive hearing, the defendant was self‑represented.
By court order, the defendant filed affidavits sworn on 21 December 2017 and 8 January 2018 in opposition to the plaintiff's application. The defendant was also ordered to file written submissions, which he failed to do.
The facts of the matter are straightforward. The plaintiff entered into a 'debt factoring' finance arrangement with Jones Business Group Pty Ltd trading as Australian Carton Company (ACC). Pursuant to a 'debt factoring' finance arrangement, the plaintiff and defendant on behalf of ACC entered into a 'Finance Facility Deed' (the Facility Deed) on 4 July 2016 whereby the defendant gave a guarantee and indemnity covering the liability to the plaintiff of ACC.
The Facility Deed contemplated the plaintiff advancing moneys to ACC on the security of ACC assigning to the plaintiff debts that were owed to ACC by ACC's customers.
Pursuant to the Facility Deed (and being the subject of this action), over the course between November 2016 and April 2017, ACC assigned twenty different debts owed by different ACC clients to the plaintiff and the plaintiff advanced moneys in accordance with the terms of the Facility Deed, totalling an amount of $398,479.71. These debts are deposed to in the affidavit of Justin Hyde dated 5 October 2017 and in the statement of claim.
Unfortunately, ACC's clients failed to repay the moneys owing and the plaintiff has not been paid the full amount of its advances (affidavit of Justin Hyde dated 5 October 2017 and in the statement of claim).
A copy of the Facility Deed is found at annexure 'JH‑9' of the affidavit of Justin Hyde dated 5 October 2017 and annexure 'DTJ2' of the affidavit of Damien Thomas Jones dated 8 January 2017.
Pursuant to the Facility Deed:
1.If a customer of ACC fails to pay to the plaintiff the face value of a debt by the date that payment is due, then ACC must immediately repay the moneys lent to it by the plaintiff on the security of the assignment of that debt and pay to the plaintiff fees and costs and all other amounts to which the plaintiff is entitled: cl 5.5 and cl 16.1(g);
2.ACC and the defendant are required to immediately indemnify the plaintiff for its expenses or losses that it suffers as a result of not receiving the full face value of a debt that is payable by a customer of ACC: cl 15.1;
3.The defendant guaranteed the payment to the plaintiff of all moneys owed or payable by ACC and the performance of all ACC's obligations: cl 11.1(a), cl 11.1(b) and cl 11.2; and
4.The defendant by way of a separate and principal obligation to the plaintiff, is required to indemnify the plaintiff for any loss suffered by the plaintiff due to ACC not paying any moneys owed or payable or by ACC not performing any of its obligations with the Facility Deed: cl 11.1(c).
Summary judgment principles
The principles of when a court should allow an application for summary judgment are well established and have been eloquently summarised in Deputy Commissioner of Taxation v Roget (No 2) [2014] WADC 25 (Davis DCJ) and Quantum Asset Management Pty Ltd v Love Properties (WA) Pty Ltd [2017] WASC 167 [79] and [80] (Banks‑Smith J).
It is trite law that the power to order summary judgment should be exercised with great care and should never be exercised unless it is clear that there is no real question to be tried: Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87, 99.
The defendant must show by affidavit or otherwise that there is some triable issue either of fact or law, and that he has an arguable defence or a defence on the merits: Moscow Narodny Bank Ltd v Mosbert Finance (Aust) Pty Ltd [1976] WAR 109, 110 ‑ 111.
Extension of time to make the application
Before I deal with the application proper, I need to address the fact that the plaintiff's application has been bought out of the time limitations prescribed by O 14 r 1(1) of the Rules of the Supreme Court 1971 (RSC).
Order 14 r 1(1) RSC stipulates that an application for summary judgment must be made within 21 days after an appearance if filed or at any later time by leave of the court. The defendant filed his appearance on 9 August 2017 and the application for summary judgment was filed on 11 October 2017, six weeks after the time limitation lapsed.
The plaintiff has therefore sought the leave of the court to extend the time for applying for summary judgment.
The delay is explained in the affidavit of Justin Hyde dated 5 October 2017 at par 7 and 8 where he deposes that he was waiting for the defendant to file his defence prior to making any application for summary judgment. When a defence was not filed, the application was made.
There are no firm rules as to when an extension ought to be granted as this is a matter for the court's discretion upon a consideration of all the circumstances of the case. Central to the exercise of that discretion is whether there has been a prejudice to the defendant occasioned by the delay.
I cannot see how there has been any prejudice to the defendant by the short delay of the plaintiff particularly in circumstances where a defence has not been filed. Further, the defendant did not raise any prejudice due to the delay in his evidence or oral submissions.
I therefore consider it appropriate to grant leave to the plaintiff to make the application out of time.
Determination
As outlined above, the plaintiff's claim is straightforward and it is submitted that a prima face case has been made against the defendant. Based on the evidential material before me and in particular the terms of the Facility Deed, this certainly appears to be the case.
It is therefore for the defendant to put before the court some material that demonstrates a triable issue either of fact or law, and that he has an arguable defence or a defence on the merits: Moscow Narodny Bank Ltd v Mosbert Finance (Aust) Pty Ltd (110 – 111); Cordinup Resorts Pty Ltd v Terana Holdings Pty Ltd (1997) 143 FLR 18, 23 (Murray J).
As mentioned above, the defendant failed to provide any written submissions despite orders and his oral submissions did little to assist him.
It is clear, from his oral submissions, that there is no dispute that there was indeed a Facility Deed between the plaintiff and ACC in which he was a guarantor for ACC. This is substantiated in the defendant's affidavit of 8 January 2018 where the Facility Deed with the defendant's signature is annexed as 'DTJ2'. The defendant made no oral submissions refuting this, nor did he make any oral submissions denying that the plaintiff was not paid the sums due and owing by ACC's client pursuant to the Facility Deed.
As to whether he had an arguable defence or a defence on its merits the defendant raised two potential defences in his oral submissions. First, that he relied on representations made by the plaintiff that there was insurance in place which limited his liability if payments were not made by ACC's clients to the plaintiff. Second, given that the plaintiff commenced separate legal proceeding against ACC's clients for recovery of the moneys should preclude the plaintiff pursing this action.
I will deal with each of these potential defences in turn.
Representations
The defendant deposes in his affidavit of 8 January 2018, that various representations were made by Mr Hyde of the plaintiff that in the event of a default of payment of the assigned debts, an insurance policy was in place which would limit the defendant's potential liability into repayment of those debts under the Facility Deed; par 17(ii), 28, 31, 33, 54 ‑ 58, 63, 68 and 71 ‑ 73.
The relevant provisions of the Facility Deed (cl 2.1) categorically states that insurance is taken out to cover unpaid debts due to 'customer insolvency' only. Further a copy of the plaintiff's collection procedure letter was provided to the defendant, annexure 'DTJ4' of the defendant's 8 January 2018 affidavit which also clearly states that 'the customer would need to be bankrupted before the insurance policy would kick in and a claim for insurance could be made'.
From what the defendant deposes at par 17(ii), 28, 31, 33, 54 ‑ 58, 63, 68 and 71 ‑ 73 was said to him by the plaintiff, it is clear that the representations made to him in fact confirmed the terms of the Facility Deed and the collection procedure letter that the insurance would only become available in the case of debtor insolvency.
The defendant's understanding of this was confirmed in his oral submissions when he stated that he 'was told by representatives of the defendant that it had in place insurance to cover any losses that may arise by the default in payment of an assigned debt if the debtor was under a statutory windup'.
Unfortunately for the defendant, it appears that he did not understand or fully appreciate what was meant by the debtor being wound up before the insurance was available as he believed the insurance was available in the event of an unpaid debt.
I cannot find that there have been any misrepresentations made to the defendant about the insurance cover provided under the Facility Deed at all. The representations made by the plaintiff, as contained in the defendant's affidavit and via the Facility Deed and collection procedure letter are consistent with insurance being available in the case of debtor insolvency. It is, I am afraid, a case of a misunderstanding of the representations and the terms of the Facility Deed and the by the defendant.
Proceedings against the debtors
There is no argument from the plaintiff that it has commenced proceedings against the relevant debtors the subject of this matter.
At par 76 of his 8 January 2018 affidavit, the defendant states that he believes that any defence raised by the defendants in those proceeding will be relevant to and have a bearing on his defence. Further, at par 77, that it is unfair and unjust if the plaintiff was successful in both proceedings as it would be awarded an amount in excess of what it is allegedly owed.
Unfortunately for the defendant, the above statements do not amount to adequate defences in this matter.
It is trite that a plaintiff may seek multiple judgements against multiple debtors for the same debt, but the rule against double recovery prevents the plaintiff from obtaining multiple recoveries for the same debt. If the plaintiff were to obtain judgment in its favour in each action, either any payments from the other judgments would reduce ACC's liability and therefore the defendants liability as guarantor or the defendant would be entitled to be subrogated to the plaintiff's rights against the other defendants should payment be first received from this defendant.
Conclusion
In consideration of all of the evidence before me, it is my opinion that the defendant has failed to show by affidavit or otherwise that there is some triable issue either of fact or law, and that he has an arguable defence or a defence on the merits: Moscow Narodny Bank Ltd v Mosbert Finance (Aust) Pty Ltd (110 – 111) and therefore there is no real question to be tried: Fancourt v Mercantile Credits Ltd (99).
The plaintiff's application for an extension of time to bring the summary judgment application and for summary judgment is allowed.
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