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APT Finance Pty Ltd v Bajada

APT Finance Pty Ltd v Bajada

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JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : THE COURT OF APPEAL (WA)

CITATION: APT FINANCE PTY LTD -v- BAJADA [2008] WASCA 73

CORAM: PULLIN JA
NEWNES AJA

HEARD: 10 MARCH 2008

DELIVERED : 31 MARCH 2008

FILE NO/S: CACV 108 of 2006

BETWEEN: APT FINANCE PTY LTD (ACN 080 974 278)
Appellant
AND
ALEXANDER STANISLAS BAJADA
First Respondent
RINZE BRADSMA
Second Respondent

ON APPEAL FROM:
Jurisdiction              :  DISTRICT COURT OF WESTERN AUSTRALIA
Coram  :WISBEY DCJ
File No  :CIV 2924 of 2002

Catchwords:

Practice and procedure - Equitable assignment of debt by plaintiff before action commenced against debtor in plaintiff's name - Legal assignment of debt during course of action - Effect of legal assignment - Application to substitute assignee as plaintiff - Whether O 18 r 6(2) applied - Whether application should be under O 18 r 7(2) - Whether merits of claim by assignee to be considered on application for substitution

Legislation:

Rules of the Supreme Court 1971 (WA), O 18 r 6(2), O 18 r 7(2)

Result:

Appeal allowed

Category: B

Representation:

Counsel:

Appellant:     Mr M H Zilko SC & Mr P N Bevilacqua
First Respondent           :     Mr A P Hershowitz
Second Respondent       :     No appearance

Solicitors:

Appellant:     Price Sierakowski
First Respondent           :     Muries Lawyers
Second Respondent       :     No appearance

Case(s) referred to in judgment(s):

Bacon v Yatchaw Irrigation & Water Supply Trust (1898) 23 VLR 485
Carob Industries Pty Ltd (In Liq) v Simto Pty Ltd [2000] WASCA 362
Elliott v Williams (1996) 15 SR (WA) 336
Hobbs v Rawson [1961] WAR 79
Hughes v Pump House Hotel Co Ltd [1902] 2 KB 190
Jennings v Credit Corporation Australia Pty Ltd [2000] NSWSC 210
Kings Quality Homes Ltd v A J Paints Ltd [1997] 3 All ER 267
McIntosh v Shashoua (1931) 46 CLR 494
Norman v Federal Commissioner of Taxation (1963) 109 CLR 9
Oshlack v Richmond River Council (1998) 193 CLR 72
Thomas v National Australia Bank Ltd [2000] 2 Qd R 448
Three Rivers District Council v Bank of England [1995] 4 All ER 312
Weddell v JA Pearce & Major [1988] Ch 26
Woodings v Stevenson [2001] WASC 174
Yorkshire Regional Health Authority v Fairclough Building Ltd [1996] 1 All ER 519

JUDGMENT OF THE COURT: This is an appeal against a decision of Wisbey DCJ made on 11 August 2006 dismissing the appellant's application for substitution of Seiza Investments Pty Ltd (Seiza Investments) in place of the appellant as the plaintiff in an action in the District Court. The respondents are the defendants in the action, which has not yet gone to trial. The second respondent, however, has played no active part in this application.

Background

In the action, the appellant alleges that it made certain loans to the first respondent, pursuant to loan deeds dated 30 June 1999, 18 October 1999 and 31 May 2000 respectively.
The appellant says it assigned its interest in the loans to ZCM Matched Funding Corporation (ZCMMFC) under an…

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: [2008] WASCA 73
Decision Date: 31 MARCH 2008

CaseChat Overview and Summary

In the matter of APT Finance Pty Ltd v Bajada, the primary issue under consideration was the substitution of Seiza Investments Pty Ltd as the plaintiff in a legal action, which was originally brought by APT Finance Pty Ltd. The action involved claims for the repayment of loans made to the first respondent. The appeal arose from a decision by Wisbey DCJ dismissing APT Finance's application to substitute Seiza Investments as the plaintiff in the District Court proceedings. The second respondent had not actively participated in the application. The crux of the dispute centred on the validity of multiple assignments of the debt from the first respondent to various entities, culminating in Seiza Investments. The appellant contended that it had validly assigned its interest in the loans to Seiza Investments through a series of intermediaries, and that Seiza Investments should replace it as the plaintiff in the action once the first respondent had been notified of these assignments.

The legal issues that the court needed to address included the applicability of O 18 r 6(2) and O 18 r 7(2) of the relevant court rules to the substitution application and whether the merits of the claim by the assignee should be considered at the application stage. Specifically, the court had to determine if the substitution application should have been made under O 18 r 6(2) or O 18 r 7(2), and whether the merits of Seiza Investments' claim needed to be evaluated when deciding on the substitution application. The court also had to consider whether the assignments had been validly executed and if the appellant had standing to bring the action after the assignments were made.

The court found that the substitution application should have been made under O 18 r 6(2) of the court rules, as it was appropriate in this context. The court held that the merits of Seiza Investments' claim did not need to be considered when deciding on the substitution application, focusing instead on the validity of the assignments and the standing of the parties involved. The court allowed the appeal, finding that Seiza Investments should be substituted as the plaintiff in the action. The reasoning was based on the premise that once the assignments were effectively communicated to the first respondent, Seiza Investments became the legal owner of the debts and thus had the right to pursue the action in its own name. The appeal was ultimately successful, leading to the substitution of Seiza Investments as the plaintiff in the original action.

Orders

Orders of the court

Appeal allowed

Background

Background to the litigation

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Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

JUDGMENT OF THE COURT: This is an appeal against a decision of Wisbey DCJ made on 11 August 2006 dismissing the appellant's application for substitution of Seiza Investments Pty Ltd (Seiza Investments) in place of the appellant as the plaintiff in an action in the District Court. The respondents are the defendants in the action, which has not yet gone to trial. The second respondent, however, has played no active part in this application. In the action, the appellant alleges that it made certain loans to the first respondent, pursuant to loan deeds dated 30 June 1999, 18 October 1999 and 31 May 2000 respectively. The appellant says it assigned its interest in the loans to ZCM Matched Funding Corporation (ZCMMFC) under an unsecuritised assets deed dated 13 April 2002. Shortly afterwards, by a deed of novation dated 26 July 2002 and a loan assets offer deed dated 25 July 2002, ZCMMFC assigned its interest in the loans to Zurich Capital Markets Asia Ltd (ZCMA). In turn, by a deed of novation and a loan assets offer deed, both dated 16 April 2003, the interest of ZCMA in the loans was assigned to Challenger Mortgage Finance Pty Ltd (CMF). Subsequently, by a deed of novation and a loan assets offer deed, both dated 26 September 2003, CMF assigned its interest in the loans to Challenger Life No 2 Ltd (Challenger Life). Then, by a deed of novation and loan assets offer deed, both dated 8 November 2004, Challenger Life assigned its interest in the loans to Seiza Investments. On the appeal the first respondent raised an issue as to whether the loans had been validly assigned by the various transactions relied on by the appellant. We will come back to that issue in due course. The appellant says that in June and July 2001 it became entitled to demand repayment by the first respondent of the money owing under the loan deeds. Demand for repayment was made by a notice dated 9 September 2002. The demand was not met and, on 29 October 2002, the appellant commenced proceedings in the District Court against the respondents claiming payment of the amounts said to be owing under the loan deeds. No notice of the various assignments to which we have referred was given to the first respondent until, on 13 May 2005, a firm of chartered accountants, Rodgers Reidy, wrote to the first respondent informing him that a Mr Moodie of that firm had been appointed by Seiza Investments as receiver and manager over certain assets of the first respondent, pursuant to powers contained in the loan deeds. The letter went on to describe each of the assignments. It is common ground that that letter constituted the first notice to the first respondent of the assignments. The first respondent's solicitors wrote to the appellant's solicitors on 19 May 2005, contending that as the appellant had assigned its interest in the debts before the District Court action was commenced, it had no standing to bring the action. There followed correspondence between the solicitors on that issue. It is not necessary to refer in any detail to that correspondence. Suffice it to say that Seiza Investments was of the view that as notice of the assignments had been given to the first respondent by the letter from Rodgers Reidy of 13 May 2005, Seiza Investments had become the legal owner of the debts and should be substituted as the plaintiff in the action. On 4 July 2005, the solicitors for Seiza Investments wrote to the first respondent's solicitors to say that, having received counsel's advice, an application would be made by Seiza Investments to be substituted as plaintiff in the action.

Ratio Decidendi

Legal Principle Established

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