Bendigo Bank Ltd v Demaria - [2001] VSC 218

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

No. 7059 of 1998

BENDIGO BANK LTD (ACN 069 049 178)	Plaintiff
v
FRANCESCO DEMARIA & ORS	Defendants

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JUDGE:	McDonald J
WHERE HELD:	Melbourne
DATE OF HEARING:	21 June 2001
DATE OF JUDGMENT:	21 June 2001
CASE MAY BE CITED AS:	Bendigo Bank Ltd v Demaria & Ors
MEDIUM NEUTRAL CITATION:	[2001] VSC 218

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Practice and procedure – counterclaim by defendant, bankruptcy of defendant, standing of defendant in proceedings – Official Trustee electing to discontinue counterclaim – counterclaim not dismissed, but stayed until further order.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr J Kewley	Hall & Wilcox
For the Defendant	No appearance

HIS HONOUR:

On 2 September 1998, these proceedings were issued on behalf of the plaintiff, Bendigo Bank Ltd, against Francesco Demaria and Francesca Demaria. On 20 August 1999, the plaintiff filed an Amended Statement of Claim. By the Amended Statement of Claim the plaintiff sought possession of land being Lot 2, Etiwanda Avenue, Mildura South and possession of land situate at and known as 16 Cureton Avenue, Mildura, together with payments of monies as set out in the amended pleading. The plaintiff alleged that by an agreement made on 27 October 1997 between it and F. Demaria Pty Ltd, it provided a commercial business overdraft facility to that company which it conducted and managed through an account of the company with it.

The plaintiff alleged that it also agreed to provide to the first and second defendants a business facility and overdraft facility to be provided to them and conducted and managed in accounts of those defendants with the plaintiff bank. The plaintiff alleged that by an instrument of mortgage registered over the land owned by those defendants and being Lot 2 Etiwanda Avenue, Mildura South, those defendants had secured to the plaintiff loans made by the plaintiff to F. Demaria Pty Ltd or those defendants and agreed to pay to the plaintiff monies due and owing by them and the company to the plaintiff.

The plaintiff alleged that at all material times the second defendant was the registered proprietor of the land at 2 Cureton Avenue, Mildura, and that by a registered mortgage, the second defendant had secured repayment to the plaintiff of any monies advanced by it for which the first and second defendants were indebted to the plaintiff.

The plaintiff further alleged that by a guarantee in writing, dated 19 November 1997, the first and second defendants guaranteed to the plaintiff payment of all monies owed by F. Demaria Pty Ltd to it. The plaintiff alleged that the company was in debt to it and that in breach of the guarantee and the mortgages, the first and second defendants had failed to pay the money due and owing.

The plaintiff alleged that the first and second defendants were indebted to it in the sums set out in the Statement of Claim and that it was entitled to possession…

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: [2001] VSC 218
Decision Date: 21 June 2001

CaseChat Overview and Summary

Bendigo Bank Limited brought an action against Joseph Demaria for recovery of monies owed under a loan agreement. Demaria, in turn, filed a counterclaim against the bank for various causes of action related to the loan agreement. Following Demaria's bankruptcy, the Official Trustee elected to discontinue the counterclaim. The central legal issues before the court were whether the Official Trustee had the standing to discontinue the counterclaim and, if so, what effect this action should have on the proceedings.

The court found that the Official Trustee did have the standing to discontinue the counterclaim on behalf of the bankrupt. However, the court considered the broader implications of such an action and determined that simply discontinuing the counterclaim was not an appropriate course of action. Instead, the court held that the counterclaim should be stayed, rather than dismissed, to preserve the rights of the parties until further order. The court reasoned that the Official Trustee's decision to discontinue the counterclaim should not result in a complete cessation of the counterclaim but rather a temporary halt to preserve the status quo and allow for a more considered approach to the matter.

The decision was made in light of the need to balance the rights of the parties and the potential consequences of the Official Trustee's actions. The court emphasised the importance of ensuring that the rights of creditors and other interested parties were protected in the context of bankruptcy proceedings. The court's ruling allowed for the preservation of the counterclaim, ensuring that it could be revisited and determined at an appropriate time, once the broader issues surrounding the bankruptcy and the parties' rights had been more fully explored.

In conclusion, the court ordered that the counterclaim be stayed until further order, rather than dismissed outright. This decision provided a measured approach to the matter, allowing for the rights of the parties to be protected and ensuring that the counterclaim could be properly considered in the future. The court's ruling demonstrated a careful consideration of the implications of the Official Trustee's actions and a commitment to ensuring that justice was served in the circumstances.

Orders