Bildom Pty Ltd v Clement - [2019] VSC 865

59 VR 352

BILDOM PTY LTD and Others v CLEMENT and Others Supreme Court of VictoriaEfthim AsJ 16 August, 06 November 2019[2019] VSC 865Banks and Banking — Cheques — Mandate — Forged cheques — Bookkeeper engaged by plaintiff misappropriated funds of plaintiff — Defendant bank admitted debiting accounts with no mandate — Pleading — Whether open to bank to plead that plaintiff represented that first defendant was agent and officer of the plaintiff.

Practice and procedure — Pleading — Whether pleading permitted — Allegation that performance of an illegal act was within scope of agency —Supreme Court (General Civil Procedure) Rules 2015 (Vic), r 36.04(1)(b).

The plaintiffs sued the estate of a bookkeeper alleging that, while engaged by them, the bookkeeper over a long period had misappropriated funds by forging cheques payable to himself. The second defendant, Westpac Banking Corporation (bank) sought leave to file an amended defence and counterclaim so as to include allegations that the bookkeeper was an officer and agent of the plaintiffs and that the bookkeeper’s fraudulent activity occurred while undertaking the position or role into which he was placed by the plaintiffs, with the result that the plaintiffs were liable to the bank for any losses which the bank might suffer if adjudged liable to any of them.

The plaintiffs opposed the amendment primarily on the basis that the bank’s amendment in substance pleaded that performance of an illegal act was within the scope of the agent bookkeeper’s authority, and that this was precluded by authority.

Held, allowing the amendment:

(1)
The amendment would enable the real questions between the parties to be determined and allow the parties to understand the case against them. [10]–[12].
BHP Information Technology Pty Ltd v Digital Equipment Corporation (Australia) Pty Ltd[1998] VSC 113[4]–[5]; ACN 074 971 109 v National Mutual Life Association of Australasia Ltd[2010] VSC 186[28] referred to.
(2)
The proposed pleading of agency was primarily based on the position into which the bookkeeper was put by the plaintiffs, and his authority over a long period to prepare cheques. Although this may plead, contrary to general authority, an agent’s authority as encompassing the performance of an illegal act, the issue was open and should be resolved at trial. [21]–[28].
Lloyd v Grace, Smith & Co[1912] AC 716; Colonial Mutual Life Assurance Society Ltd v Producers and Citizens Cooperative Assurance Co of Australia Ltd(1931) 41 CLR 41, 46 considered.Northside Developments Pty Ltd v Registrar-General(1990) 170 CLR 146, 184 referred to.

Application

This was an application for leave to file an amended defence and counterclaim. The facts are stated in the judgment.

doi: 10.25291/VR/59-VR-35259 VR 353R G Craig with R Burd for the plaintiffs. S M Hooper for the first defendant. M B Loughnan QC with B Carew for the second defendant. Reserved judgment.EFTHIM AsJ

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.

Continue reading Bildom Pty Ltd v Clement

Details

AGLC: Bildom Pty Ltd v Clement [2019] VSC 865
Case: [2019] VSC 865
Decision Date: 06/11/2019

CaseChat Overview and Summary

Bildom Pty Ltd and others initiated legal proceedings against Clement and others, including Westpac Banking Corporation, to recover funds embezzled by a former employee, Peter Gretton. Gretton had embezzled over $3 million from the plaintiffs by forging cheques payable to himself between 2002 and 2017. Westpac, which had debited the plaintiffs' accounts without proper mandate, was also named as a defendant. The central issue before the court was whether Westpac should be granted leave to file an amended defence and counterclaim, which included allegations that Gretton was an agent of the plaintiffs and that his fraudulent activities occurred within the scope of his employment, thereby making the plaintiffs liable for any losses Westpac might incur if found liable to the plaintiffs.

The court ruled in favour of allowing the amendment to the defence and counterclaim. The court held that the amendment would facilitate the determination of the real questions between the parties and enable them to understand the case against them. The court found that while general authority cannot encompass the performance of an illegal act, this issue should be resolved at trial. The court noted that Westpac's proposed pleading of agency was primarily based on the position Gretton was put in by the plaintiffs and his authority over a long period to prepare cheques. The court observed that the plaintiffs understood Westpac's case and that if the plaintiffs believed the pleading was insufficient, they would fail in their defence.

The court allowed Westpac to plead agency but required modifications to the pleading of vicarious liability. The court emphasised that the pleading must be clear enough for the plaintiffs to understand and respond to it if they so desired. The court ordered that Westpac be granted leave to file an amended defence and counterclaim, but not in its current form, with the necessary modifications to ensure clarity and understanding for the plaintiffs.

Orders