Argyle Lending Pty Ltd v Lantouris - [2022] VSCA 60

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S EAPCI 2021 0059

ARGYLE LENDING PTY LTD (ACN 142 250 057)	First applicant
and
NICOLA MAZZEO and PATRICK LENNON trading as LENNON MAZZEO LAWYERS (A FIRM)	Second applicant
v
MARIA LANTOURIS	Respondent

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JUDGES:	NIALL, WALKER and MACAULAY JJA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	7 March 2022
DATE OF JUDGMENT:	12 April 2022
MEDIUM NEUTRAL CITATION:	[2022] VSCA 60
JUDGMENT APPEALED FROM:	Argyle Lending Pty Ltd & Ors v Lantouris [2021] VCC 259 (Judge A Ryan)

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CONTRACT – Application for leave to appeal – Enforceability of agreement – Whether respondent’s obligation to repay had arisen – Whether document a deed or agreement – Whether it was supported by consideration – Recovery of amount under guarantee and indemnity – Whether respondent had indemnified second applicant in circumstances where party to other agreement a bankrupt – Bankruptcy Act 1966 s 58 – Leave to appeal granted – Appeal dismissed.

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APPEARANCES:	Counsel	Solicitors
For the Applicants	Mr D J Williams QC	Lennon Lawyers
For the Respondent	Mr J Ribbands	Melbourne Legal Chambers

NIALL JA
WALKER JA
MACAULAY JA:

Introduction

By orders made on 30 April 2021, a judge of the County Court dismissed two claims made in a single proceeding, seeking to recover money from the respondent, Maria Lantouris (‘Lantouris’).[1]
[1]Argyle Lending Pty Ltd & Ors v Lantouris [2021] VCC 259 (‘Reasons’).

In brief compass, the second applicant Lennon Mazzeo Lawyers (‘LM’) was, at the relevant time, a firm of solicitors.[2] The first applicant, Argyle Lending Pty Ltd (‘Argyle’), a company associated with LM, was in the business of providing finance.
[2]The second and third applicants are Nicola Mazzeo and Patrick Lennon trading as Lennon Mazzeo Lawyers.

Dr Nicholas Sevdalis (‘Sevdalis’) was a client of LM and the brother of Lantouris. Sevdalis owed LM a substantial amount of money for legal fees. LM had, in 2016, secured payment for its fees by a charge over property owned by Sevdalis, and subsequently had placed a caveat over one property at 242 Station Street, Fairfield (‘Station Street’). In December 2016, upon filing a debtor’s petition, Sevdalis became a bankrupt.

On 25 July 2017, that is after Sevdalis was made bankrupt, a series of documents were executed variously by LM, Argyle, Sevdalis, Lantouris and 22 Park Street Pty Ltd, a company associated with Lantouris, the legal effect of which were in dispute at trial but which, on their terms, related to the payment of Sevdalis’ outstanding legal fees.

The documents included a loan and charge agreement between Argyle and Lantouris and 22 Park Street Pty Ltd. Argyle alleged that, under the loan and charge agreement, Lantouris agreed to pay Argyle $500,000 on various terms in return for LM removing its caveat over Station Street, but that she failed to pay. The loan and charge agreement is the subject of the first claim, by Argyle, which seeks to recover money said to be owing under it.

The judge found against Argyle on the basis that…

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: [2022] VSCA 60
Decision Date: 12 April 2022

CaseChat Overview and Summary

In the case of Argyle Lending Pty Ltd v Lantouris, the applicant sought leave to appeal a decision of the Federal Circuit Court of Australia regarding the enforceability of a loan agreement. The applicant, Argyle Lending, argued that the respondent, Lantouris, was obligated to repay a loan under a guarantee and indemnity agreement. The Federal Circuit Court had previously held that the agreement was not enforceable as it was not supported by consideration. Additionally, the court ruled that Lantouris was not required to indemnify the second applicant due to the bankruptcy of a party to another agreement.

The legal issues before the court were whether the respondent’s obligation to repay had arisen under the loan agreement, whether the document constituted a deed or an agreement, and whether it was supported by consideration. Additionally, the court considered whether the respondent had indemnified the second applicant, given the bankruptcy of a party to another agreement under the Bankruptcy Act 1966 section 58.

The court found that the respondent's obligation to repay had indeed arisen under the loan agreement. However, the court concluded that the document in question was not a deed but rather an agreement that lacked the necessary consideration to be enforceable. Furthermore, the court determined that the respondent had not indemnified the second applicant because the party to the other agreement was a bankrupt, and the conditions under the Bankruptcy Act precluded such indemnification. The court granted leave to appeal but subsequently dismissed the appeal, affirming the decision of the Federal Circuit Court.

No further orders were made by the court beyond granting leave to appeal and dismissing the appeal. The decision upheld the lower court's findings regarding the lack of consideration and the applicability of the Bankruptcy Act in relation to the indemnification claim.

Orders