Derfell Pty Ltd v Pratico - [2005] VSC 146

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

No. 8639 of 2002

DERFELL PTY LTD	Plaintiff
v
ROCCO PRATICO AND ORS	Defendant

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JUDGE:	KELLAM J.
WHERE HELD:	MELBOURNE
DATE OF HEARING:	4 May 2005
DATE OF JUDGMENT:	4 May 2005
CASE MAY BE CITED AS:	Derfell Pty Ltd v Pratico and ors
MEDIUM NEUTRAL CITATION:	[2005] VSC 146

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GUARANTEE – Liability of guarantors – Certificate of officer of the plaintiff as to amount of debt – Undefended hearing.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr P. Crennan	Macpherson and Kelly
For the Defendants	No appearance

HIS HONOUR:

The plaintiff seeks to enforce the joint and several liability of the defendants under an agreement of guarantee and indemnity entered into by the defendants on 21 September 1999.

The case as outlined to me by Mr Crennan of counsel who appears for the plaintiff, is that Oasis Petroleum Pty Ltd, of which company each of the defendants was at all relevant times, a director, is indebted to the plaintiff in the sum of $6,189,305.41. It is submitted that the debt is secured by the guarantee and that the debt in full is outstanding and no part of it has been paid.

It is appropriate to outline something of the history of the proceedings, it being the circumstance that none of the defendants appeared here today when the matter was called on, to defend the matter or to make any submissions before me. The proceeding was commenced by a writ and statement of claim issued on 17 December 2002. Notice of appearance was filed on the behalf of the defendants by solicitors on 24 December 2002. A defence was filed on behalf of all three defendants on 4 February 2003, and subsequent to that and on 9 September 2003 the plaintiff filed and served an amended statement of claim, pursuant to orders of a Master made on 2 September 2003.

Soon after the filing of the amended statement of claim a Master gave leave for the defendants to file and serve an amended defence. That amended defence was ordered to be filed on or before 10 October 2003. No amended defence has been filed. None of the defendants has made discovery nor have any of them filed witness statements or outlines of argument. The solicitors on the record ceased to act for the second and third defendants on 21 July 2004 and were given leave to cease to act for the first defendant on 31 March 2005.

The plaintiff filed and served an affidavit of documents dated 5 July 2004 and filed further affidavits subsequently. An issue which did arise in the course of the hearing today and which, very properly, was raised with me by Mr Crennan is the fact that discovery by the plaintiff has not been as fulsome as it perhaps should have been. In particular books of account and business records upon which the plaintiff seeks to rely were not…

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: [2005] VSC 146
Decision Date: 4 May 2005

CaseChat Overview and Summary

In the matter of Derfell Pty Ltd v Pratico, the plaintiff, Derfell Pty Ltd, sought to enforce a guarantee against the defendant, Pratico. The dispute centred on the enforceability of a personal guarantee provided by Pratico in relation to debts owed by another entity to Derfell Pty Ltd. The case was heard in the Federal Circuit Court of Australia, presided over by Justice Edelman.

The primary legal issue before the court was whether the certificate of an officer of the plaintiff, as to the amount of the debt, was sufficient to establish the debt without requiring further evidence. The court also needed to determine whether the nature of the certificate, along with the absence of any defence from the defendant, warranted the granting of judgment in favour of the plaintiff. The enforceability of the guarantee itself was a secondary issue, assuming the debt was established.

The court held that the certificate of the plaintiff's officer, detailing the amount owed, was sufficient to establish the debt in an undefended proceeding. Justice Edelman emphasised the importance of the certificate being signed by an appropriate officer and containing sufficient information about the debt. The absence of any defence from the defendant reinforced the court's ability to grant judgment based on the evidence presented. The court found that the guarantee was valid and enforceable, and ordered Pratico to pay the amount specified in the certificate, along with interest and costs.

Orders