Citigroup Pty Ltd v CrediProtect Pty Ltd - [2010] NSWSC 1054

CITATION: Citigroup v CrediProtect [2010] NSWSC 1054

HEARING DATE(S): 6/09/10, 07/09/10, 08/09/10, 09/09/10 and 10/09/10

JURISDICTION: Equity Division
Commercial List

JUDGMENT OF: McDougall J at 1

EX TEMPORE JUDGMENT DATE: 10 September 2010

DECISION: Citigroup is entitled to judgment for the amount claimed, and the cross-claim fails.

CATCHWORDS: TRADE PRACTICES - misleading or deceptive conduct - unconscionability - sale of debt book - plaintiff seeking judgment for payment of remaining instalment of purchase price - where second and third defendants guaranteed obligations of first defendant - cross-claim - whether plaintiff engaged in misleading or deceptive conduct - whether alleged representatives made - whether deed of sale and deed of guarantee obtained by unconscionable conduct. - CONTRACTS - whether negligent misrepresentations made.

LEGISLATION CITED: Civil Procedure Act 2005 (NSW)
Trade Practices Act 1974 (Cth)

CATEGORY: Principal judgment

CASES CITED: Blomley v Ryan (1956) 99 CLR 362
Commercial Bank of Australia Limited v Amadio (1983) 151 CLR 447
Louth v Diprose (1999) 175 CLR 621
Nguyen v Cosmopolitan Homes [2008] NSWCA 246
Turner v Windever [2003] NSWSC 1147
Watson v Foxman (1995) 49 NSWLR 315

PARTIES: Citigroup Pty Limited (First Plaintiff / Cross Defendant)
CrediProtect Pty Ltd (First Defendant / First Cross-Claimant)
Michelle Bubke (Second Defendant / Second Cross-Claimant)
National Receivables Group Pty Ltd (Third Defendant / Third Cross-Claimant)

FILE NUMBER(S): SC 2009/298630

COUNSEL: N C Hutley SC / B F Katekar (Plaintiff)
M W Sneddon / C E Alexander (Defendants)

SOLICITORS: Henry Davis York Lawyers (Plaintiff)
Gillard Consulting Lawyers (Defendants)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
COMMERCIAL LIST

McDOUGALL J

10 September 2010 (ex tempore – revised 13 September 2010)

2009/298630 CITIGROUP PTY LIMITED v CREDIPROTECT PTY LTD

JUDGMENT

1 HIS HONOUR: On 28 September 2007, the plaintiff (Citigroup) sold about $62.3 million worth of consumer debt to the first defendant (CrediProtect). The purchase price, calculated at 5.78 per cent of the face value of the debt sold, was payable by three instalments. The first two instalments were paid, but the third instalment, of $2,736,285, was not. The second and third defendants (Ms Bubke and NRG) guaranteed the obligations of CrediProtect, by deed made on 11 October 2007.

2 Citigroup sues CrediProtect, Ms Bubke and NRG for the amount of the unpaid instalment and interest. The defendants say that the execution of the deed of sale and the deed of guarantee was obtained by unconscionable conduct on the part of Citigroup, both under the general law and pursuant to s 51AA of the Trade Practices Act 1974 (Cth). They rely, in the alternative, on the proposition that the execution of those documents was procured by misleading or deceptive conduct (s 52 of the Trade Practices Act) or by negligent misrepresentation. They have cross-claimed for relief including rescission and damages.

3 For the reasons that follow, Citigroup is entitled to judgment for the amount claimed together with interest, and the cross-claim fails.

The agreed issues

4 The parties agreed upon the issues for decision. I set them…

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: [2010] NSWSC 1054
Decision Date: 10 September 2010

CaseChat Overview and Summary

Citigroup Pty Ltd, the plaintiff, sought judgment for payment of the remaining instalment of the purchase price from CrediProtect Pty Ltd, the first defendant, for the sale of a debt book. CrediProtect Pty Ltd had guaranteed the obligations of the first defendant, and the second and third defendants, who were officers of CrediProtect, guaranteed these obligations. CrediProtect filed a cross-claim against the plaintiff alleging that it had engaged in misleading or deceptive conduct, unconscionability, and negligent misrepresentation in relation to the sale. The court had to decide whether the plaintiff engaged in misleading or deceptive conduct, whether the representatives made certain representations, and whether the deed of sale and deed of guarantee were obtained by unconscionable conduct. Additionally, the court needed to determine if there were negligent misrepresentations made in relation to the sale.

The court found that the plaintiff did not engage in misleading or deceptive conduct and that the representatives did not make the alleged representations. The court also found that the deed of sale and deed of guarantee were not obtained by unconscionable conduct. The court held that the plaintiff had not made any negligent misrepresentations, and therefore, the cross-claim was dismissed with costs. The court found that the plaintiff was entitled to the remaining instalment of the purchase price and ordered CrediProtect Pty Ltd to pay the outstanding amount to the plaintiff, together with interest and costs.

The court's reasoning was based on the evidence presented and the applicable law. The court found that the plaintiff had acted in good faith and had not engaged in any misleading or deceptive conduct. The court also found that the representatives did not make the alleged representations and that there was no evidence of unconscionable conduct in obtaining the deed of sale and deed of guarantee. The court held that the plaintiff had not made any negligent misrepresentations and that the cross-claim was without merit. The court ordered CrediProtect Pty Ltd to pay the remaining instalment of the purchase price, together with interest and costs.

Orders