Alessandrino v Viner
[2008] WASC 32
•12 MARCH 2008
ALESSANDRINO -v- VINER [2008] WASC 32
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2008] WASC 32 | |
| Case No: | CIV:2190/2007 | 4 MARCH 2008 | |
| Coram: | MASTER SANDERSON | 11/03/08 | |
| 7 | Judgment Part: | 1 of 1 | |
| Result: | Both applications dismissed | ||
| B | |||
| PDF Version |
| Parties: | VINCENZO MARIO ALESSANDRINO CARMELO ALESSANDRINO ROBERT IAN VINER |
Catchwords: | Summary judgment applications by both plaintiffs and defendant Turns on own facts |
Legislation: | Nil |
Case References: | Albion Insurance Co Ltd v Government Insurance Office (NSW) (1969) 121 CLR 342 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- CARMELO ALESSANDRINO
Plaintiffs
AND
ROBERT IAN VINER
Defendant
Catchwords:
Summary judgment applications by both plaintiffs and defendant - Turns on own facts
Legislation:
Nil
Result:
Both applications dismissed
(Page 2)
Category: B
Representation:
Counsel:
Plaintiffs : Mr M L Bennett
Defendant : Mr R R Cywicki
Solicitors:
Plaintiffs : Lavan Legal
Defendant : GV Lawyers
Case(s) referred to in judgment(s):
Albion Insurance Co Ltd v Government Insurance Office (NSW) (1969) 121 CLR 342
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1 MASTER SANDERSON: This is the return of two chamber summons - both the plaintiffs and the defendant have sought summary judgment. The facts can be summarised in the following way.
2 The plaintiffs and the defendant are directors of Blackcrest Pty Ltd (Blackcrest). By trust deed of 23 April 1987, Blackcrest became the trustee of the Blackcrest Unit Trust. There have been various variations to the trust deed over the years, but none of those variations is material to this application. The second-named plaintiff and the defendant are also directors of a company styled United Finance Corporation Pty Ltd (United). The first-named plaintiff is the secretary of United. By trust deed of 14 October 1980, United became the trustee of the United Finance Unit Trust. Once again, that trust deed has been varied from time to time and, once again, none of those variations are material to this litigation.
3 In 1987, Blackcrest, in its capacity as trustee for the Blackcrest Unit Trust, purchased 20 lots on a strata plan which is commonly known as the Kardinya Commercial Retail and Medical Centre (Kardinya Commercial Centre). Over the years Blackcrest sold a number of lots to reduce debt and by 2003 Blackcrest owned six of the 20 lots, having sold the remaining 14.
4 As at 30 June 2007, the United Finance Unit Trust held 45 units in the Blackcrest Unit Trust.
5 From 1987 when Blackcrest purchased the Kardinya Commercial Centre, United, in its capacity as trustee for the United Finance Unit Trust, had a loan with Blackcrest Unit Trust. The initial purpose of the loan was to finance the purchase of lots in the Blackcrest Unit Trust. The balance of the loan has varied over time. As at 30 June 1991, the balance of the loan was $553,180. By 30 June 2004, United Finance Unit Trust's indebtedness to Blackcrest was $1,750,000. In late 2005, Blackcrest refinanced the loan, borrowing a further $50,000. At all material times, the loan funds were provided by Perpetual Trustees (Perpetual).
6 By terms of a mortgage in writing dated 13 December 2005 between Perpetual and Blackcrest, Perpetual advanced the sum of $2,350,000 to Blackcrest. The mortgage was secured by a first ranking mortgage over the remaining six lots held by Blackcrest in the Kardinya Commercial Centre and an unlimited joint and several guarantee in indemnity provided by the two plaintiffs and the defendant.
7 By late 2005, United, in its capacity as trustee for the United Finance Unit Trust, had accrued outstanding interest payments on its loan of
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- $51,664. It then borrowed a further $51,664 from Blackcrest by way of the Perpetual refinance. That resulted in the total indebtedness of United to Blackcrest increasing to a total of $1,801,664. There is some dispute as to the figures in this matter and this is an issue to which I will return later in these reasons. However, for the purposes of establishing the factual situation, the precise figures are not relevant.
8 It is worth pausing at this point to make plain what had occurred. Blackcrest had borrowed money from Perpetual and it had lent that money to United. It was not in dispute that it was entitled to take that action: see affidavit of the first-named plaintiff sworn 13 December 2007, annexure VMA2, cl 43(c), page 45. To ensure repayment of the money borrowed, Perpetual had a mortgage over Blackcrest's units in the Kardinya Commercial Centre. It also had the guarantee and indemnity from the plaintiffs and the defendant. Assuming that at some stage Perpetual, acting pursuant to the provisions of the mortgage, sold up the secured assets, then any shortfall would have had to have been met by the plaintiffs and the defendant. That was the effect of the guarantee and indemnity. But there could be no doubt that the plaintiffs and the defendant would then have a right of indemnity against United. It was, after all, United who was the ultimate beneficiary of the loan. Whether or not the right of action against United had any value is not to the point. The right to take that action undoubtedly existed. Counsel for the defendant had no difficulty with that proposition.
9 By 7 March 2007, the plaintiffs had decided that the Kardinya Commercial Centre had to be sold. The first-named plaintiff wrote to the defendant putting that position. That letter, which appears as annexure VMA10 to the first-named plaintiff's affidavit of 13 December 2007, had attached to it a resolution of the directors of Blackcrest which the defendant was asked to sign. The defendant wrote back on 29 March 2007 declining to sign the resolution and indicating he opposed sale of the units. The response of the plaintiffs was to call a directors meeting. On 18 April 2007, the defendant again wrote to the first-named plaintiff re-stating his opposition to the sale of the units and indicating he would not be attending the directors meeting. The meeting was duly held on 18 April 2007 and, in the defendant's absence, the directors resolved to sell the Kardinya Commercial Centre. The sale was completed on 29 June 2007 and the sale price was $4,600,000.
10 As at the date of the sale, Blackcrest was indebted to Perpetual in an amount of $2,372,690.96. As the settlement statement reveals (annexure VMA16), at settlement a cheque was provided to Perpetual, a
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- discharge of the mortgage was provided to Blackcrest, two unit holders were paid what appears to have been part of their entitlement and the rest of the funds were passed to Blackcrest.
11 In other words, at settlement, Blackcrest discharged a liability which was the primary responsibility of United.
12 The directors of Blackcrest then set about dividing up the retained proceeds of sale among the unit holders. At par 23 of his affidavit of 13 December 2007, the first-named plaintiff says that each unit holder was to receive $18,521.50 for every unit held in the Blackcrest Unit Trust. The papers do not reveal how this amount was calculated. It must be assumed that the process involved deducting from the sale price all legitimate expenses (for instance, settlement agent's fees) and then dividing the notional net sale proceeds (leaving to one side the amount paid to Perpetual to satisfy the loan that was the responsibility of United) among the remaining unit holders. The papers do not reveal how many unit holders there were and whether indeed this was the methodology employed. This is a significant omission.
13 The plaintiffs calculated that subsequent to settlement United was indebted to Blackcrest in the sum of $968,196.50. This amount was calculated by putting the indebtedness of United to Blackcrest at $1,801,664. From that was deducted United's entitlement of $833,467.50 (45 units x $18,521.50) to arrive at the balance.
14 On 5 July 2007, the plaintiffs 'in our capacity as guarantors to Blackcrest' (see par 33 of the affidavit of the first-named plaintiff sworn 13 December 2007) made payment to Blackcrest. This payment was made some seven days (or thereabouts) after settlement.
15 The plaintiffs now say that they are entitled to a contribution from their co-surety to the extent of one-third of the amount they have paid. The defendant denies that he has any liability to the plaintiffs. It is his position that all of the debt due to Perpetual was paid by Blackcrest. The guarantee was therefore never called upon. That being so, he says that he is not liable in law or in equity to make any contribution to the amount paid to Blackcrest by the plaintiffs.
16 The facts of this case present a unique situation. Both parties were agreed that in equity and law 'persons who are under co-ordinate liabilities to make good the one loss (e.g. sureties liable to make good a failure to pay the one debt) must share the burden pro rata': see Kitto J in Albion Insurance Co Ltd v Government Insurance Office (NSW) (1969) 121
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- CLR 342, 350. On that basis, counsel for the defendant conceded that if at settlement of the sale of the Kardinya Commercial Centre there had been a shortfall such that the sale price did not satisfy the amount due under the Perpetual mortgage and the shortfall had been met by the plaintiffs pursuant to their guarantee, they would have had a right to a contribution from the defendant.
17 It was the defendant's contention that the guarantee had never actually been called upon. In one sense that is right. Despite what the first-named plaintiff says in his affidavit, the plaintiffs and the defendant were not guarantors to Blackcrest. Counsel for the plaintiffs during his submissions pointed out that the terms of the guarantee and indemnity given by the plaintiffs and the defendant to Perpetual - not to Blackcrest - rendered the parties primarily liable for the debt along with Blackcrest. That may or may not be correct and I express no concluded view on the proposition. But it is important to note that the guarantee was not given to Blackcrest. It was given to Perpetual. To that extent, however the payment made by the plaintiffs may be characterised, it cannot be characterised as a payment made pursuant to the guarantee.
18 Having reached that point, it is sufficient if I say that I am not satisfied that this is a case where summary judgment ought be entered for the plaintiffs. Ordinarily, when an order for summary judgment is refused, it is inappropriate to say too much about the facts. However, in this case the facts are largely not in dispute. Furthermore, there was an application for summary judgment by the defendant. While no appeal against a refusal to enter summary judgment for the plaintiffs is subject to an appeal, a defendant has an appeal right. That being so, some reasons for refusing summary judgment need to be provided. Here the plaintiffs' case is clearly arguable and there ought not be judgment for the defendant.
19 As I have indicated above, there does seem to me to be a deficiency in the materials in this case. I have not been able, from the materials provided, to work out how the amount paid by the plaintiffs to Blackcrest was calculated. In broad terms I understand the procedure, but there is a clear deficiency in the evidence. This is a case where the point for determination is short and there is unlikely to be any need for oral evidence. It would be greatly to the benefit of the parties if the method of calculation were clarified by the filing of further affidavit material. That may then allow for a prompt hearing of the dispute before a judge perhaps even without the need for pleadings.
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20 I would dismiss both the plaintiffs' and the defendant's applications for summary judgment. The costs of both applications ought be costs in the cause. I will hear the parties further as to appropriate directions from this point on.
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