Elders Rural Bank Ltd v Mapplelane Enterprises Pty Ltd & Ors
[2009] VSC 46
•26 February 2009
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
No. 5780 of 2006
| ELDERS RURAL BANK LTD | Plaintiff |
| v | |
| MAPPLELANE ENTERPRISES PTY LTD | First Defendant |
| DALLAS PHILLIP BOWDEN | Second Defendant |
| MARGARET JOY BOWDEN | Third Defendant |
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JUDGE: | MANDIE J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 9 - 12 February 2009 | |
DATE OF JUDGMENT: | 26 February 2009 | |
CASE MAY BE CITED AS: | Elders Rural Bank Ltd v Mapplelane Enterprises Pty Ltd | |
MEDIUM NEUTRAL CITATION: | [2009] VSC 46 | |
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BANKER AND CUSTOMER – claim pursuant to facility agreements and guarantee – allegation of forged signatures – alleged set-off agreement.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr M Hoyne | Corrs Chambers Westgarth |
| For the First Defendant | Mr P Bowden (by leave) | |
| For the Second Defendant | In person |
HIS HONOUR:
Introduction
The plaintiff, Elders Rural Bank Ltd (“the Bank”), claims moneys lent and interest thereon pursuant to various alleged agreements and also seeks possession under two mortgages allegedly given as security in relation to the loans. Consent orders were made in relation to the proceeding as against the third defendant and the trial went forward against the first and second defendants. I will hereafter refer, where convenient, to the first and second defendants as “the defendants.” The first defendant (“Mapplelane”) was not legally represented and leave was given to Mr Phillip Bowden (“Mr Bowden”) to represent Mapplelane. The second defendant, Dallas Phillip Bowden, is Mr Bowden’s son and he represented himself. In order to avoid confusion, I will refer to the second defendant as “Dallas.”
Mapplelane is sued as the borrower in the relevant transactions and Dallas is sued as a guarantor. The Bank as mortgagee seeks possession of two properties in the Shepparton area, one known as “Riverlands” of which Dallas is the registered proprietor and the other known as “Wunghnu” of which Mapplelane is the registered proprietor.
Apparently the Bank is partly owned by the parent company of Elders Ltd and, as will be seen, it appears that some confusion may have been caused to the defendants and others because the name “Elders” might refer to the Bank or might refer to Elders Ltd. In addition, the evidence shows that some employees of Elders Ltd operated the retail or “sales force” or “distribution” functions of the Bank whereas other employees of Elders Ltd had no connection with the Bank at all and were engaged in various parts of the business of Elders Ltd unconnected with the Bank, including that of stock and station agents.
As the defendants were not legally represented, their defences emerged partly from an amended defence that had been settled by counsel, partly from questions asked by Mr Bowden of the plaintiff’s witnesses and partly from the evidence given by Dallas. Unfortunately, although Mr Bowden engaged in quite lengthy cross-examination of the Bank’s witnesses, he did not for whatever reason make any closing submissions of fact or law. Dallas did not cross-examine any of the Bank’s witnesses and made no submissions on his own behalf. As a result, the Court did not have the benefit of any explanation, let alone a clear explanation, of the defences relied upon and I have to do the best I can based upon the amended defence and the matters raised in evidence. Some assertions were made by Mr Bowden in the course of his cross-examination, either in the form of questions to the witnesses or directly to the Court, that also gave some general indications of the defences upon which he relied. It was clear that he was endeavouring to put forward such defences as he considered were available both in relation to the case against Mapplelane and the case against Dallas.
Background facts
Mapplelane conducted a farming operation on a number of properties, principally comprising dairy farming and cattle trading.
I note here that the Bank proved that its solicitors had utilised the Notice to Admit procedure[1] under the Rules to establish the authenticity of the various documents upon which the Bank relied and that the defendants did not respond to the relevant Notice. As a result, the Bank established the authenticity of all of the documents upon which it sued and a number of other documents. In addition, the original documents were all tendered in evidence or, in the case of title documents and registered mortgages, copies certified by the Registrar of Titles were tendered in evidence. Although the defendants did not seek leave to withdraw any of the admissions that resulted from their failure to respond to the Notice to Admit, I have given due consideration to any challenges at trial to the authenticity of these documents – these challenges were substantially confined to limited evidence by Dallas that certain signatures purporting to be his were not his.
[1]This was established by an affidavit of Daniel Wylie sworn 11 December 2007 and an affidavit of Amanda Claire Fajerman sworn 10 February 2009.
Adam Charles Moss testified that between 2002 and 2004 he was employed by Elders Ltd but that, pursuant to such employment, he acted for the Bank as District Finance Manager[2] at the Shepparton branch and, from June 2004, as a Regional Banking Manager of the Bank. Mr Moss testified that he met Mr Bowden and Dallas in late 2001 or early 2002 probably at their farm. They told him that they traded through a company called Mapplelane and that they were seeking a loan to purchase a property known as Glenlea, to refinance debts owed to another financier and to build up their stock numbers. They told him that Mr Bowden would be closely involved in running the operations but that Dallas was the sole director of Mapplelane, which had been set up this way as a result of the matrimonial breakdown between Mr Bowden and his wife Margaret. Mr Moss recommended to the Bank that Mapplelane have a term loan facility limited to $575,000 and a trading limit facility limited to $125,000.
[2]Another witness, Richard John Barry, referred to this position as “District Banking Manager.”
Mr Moss testified that letters of offer (see below) and a number of other related documents were probably taken by him to the Bowdens at their farm which was not far out of Shepparton.
By letter dated 18 February 2002 from the Bank to Mapplelane, the Bank offered a term loan facility to Mapplelane, in its own right and as trustee for the Bowden Family Trust,[3] such facility to be guaranteed by Dallas and his mother, the third defendant. The purpose of the facility was expressed to be to assist the borrower in property purchase and in refinancing an existing debt and the facility limit was $575,000. The letter set out the interest rate and other terms and conditions of the proposed loan facility. Amongst the securities required by the Bank in its letter were registered mortgages over properties not presently relevant, a guarantee and indemnity from Dallas and a deed of charge over Mapplelane.
[3]In his witness statement, Dallas said that Mapplelane was the trustee of the “Grassland Pastoral Trust” but this was not substantiated by any documentary evidence and nothing seems to turn on it.
The Bank’s letter of offer dated 18 February 2002 was accepted by Mapplelane on 7 March 2002 by Dallas signing in the space provided in the letter in his capacity as sole director of Mapplelane. I will refer to this agreement as the “First Term Loan Agreement.” Dallas also signed in the place indicated as a guarantor. Receipt was also acknowledged by the defendants of a copy of the Bank’s Facility Terms.
The Facility Terms provided,[4] inter alia, that a certificate signed by the Bank or any authorised officer stating an amount owing to the Bank at a particular date or as to any other matter or thing was conclusive evidence against the borrower and the guarantor unless proved incorrect (“the conclusive evidence clause”).
[4]See cl.12.1.
The Bank sued upon the First Term Loan Agreement but placed primary reliance upon a later agreement that picked up the amount due under the First Term Loan Agreement.
The evidence shows that, although the First Term Loan Agreement facility was established in part to finance the purchase of the property known as “Glenlea,” the facility was not utilised for that purpose. The evidence indicates that there was a proposed contract of sale in relation to Glenlea and that “Camerons Lawyers” of Shepparton were the solicitors acting for the defendants in the transaction. On or about 11 March 2002, the vendors told Dallas that the transaction was not proceeding and, by letter from Camerons to Dallas dated 4 April 2002, Mr Simon John Furphy, a solicitor and member of the firm of Camerons, confirmed his instructions received from Dallas that the matter was no longer proceeding.
By another letter, also dated 18 February 2002, from the Bank to Mapplelane, the Bank offered a trading limit facility to Mapplelane, in its capacity as trustee for the Bowden Family Trust. The purpose of the facility was to meet seasonal and livestock expenses and the limit was $125,000. The letter set out the interest rate and other terms of the proposed facility and required a number of securities including a guarantee and indemnity from Dallas and a deed of charge over Mapplelane. This document was not sued upon by the Bank but the money advanced thereunder was sought to be recovered under later agreements.
On 23 April 2002, Dallas signed a document entitled “Unlimited Guarantee and Indemnity” in favour of the Bank (“the 2002 guarantee”) and his signature was witnessed by Mr Furphy.
Mr Furphy signed a certificate dated 23 April 2002 addressed to the Bank to the effect that he had explained the guarantee to Dallas who had informed him that he (Dallas) understood the general nature and effect of the document and the obligations and risks involved in signing it. I note that the amended defence of the defendants alleged that the purported signature of Dallas on the 2002 guarantee was a forgery but Dallas admitted in evidence that the signature was his. In any event Mr Furphy testified to that effect and I accept his evidence in that respect, and generally.
The 2002 guarantee was expressed to be given in relation to the obligations to the Bank of Mapplelane as borrower.[5] The 2002 guarantee defined “guaranteed money” as meaning all money and damages which, for any reason or at any time, were owing by the borrower to the Bank and the guarantor[6] unconditionally and irrevocably guaranteed the due and punctual payment to the Bank of all of the guaranteed money, and further provided that, if the borrower did not pay to the Bank any of the guaranteed money when due, the guarantor was obliged to pay the guaranteed money to the bank on demand. Liability under the guarantee was expressed to be unlimited and the document was said to be a “continuing guarantee.” The 2002 guarantee also contained the conclusive evidence clause.
[5]In item 3 of the Schedule to the 2002 guarantee, Dallas was also referred to as a borrower but nothing turns on this because “borrower” is defined as meaning “each” person described in item 3 of the Schedule and reference to “borrower” was further defined as a reference to the named borrowers “jointly and each of them severally.”
[6]See cl. 3.1.
By a deed of charge dated 30 April 2002 (“the Deed of Charge”), duly lodged and entered in the Australian Register of Company Charges, Mapplelane charged all of its property, as defined, in favour of the Bank in substance to secure all money due or that might become due to the Bank by Mapplelane. The Deed of Charge was signed by Dallas on behalf of Mapplelane. It was initially stamped in relation to an amount secured of $10,000 and duty was subsequently paid in relation to an increased amount of $700,000 on or about 8 May 2002.
The Bank seeks a declaration that the Deed of Charge is valid and enforceable but does not otherwise seek, in this proceeding, to enforce the Deed of Charge.
On 30 April 2002, pursuant to the First Term Loan Agreement, it was not contested that the Bank advanced to Mapplelane the sum of $344,174.79 by way of refinancing loans previously obtained by it from certain other financiers. The evidence shows that interest accrued on this advance such that, as at 30 January 2003, the amount outstanding including interest was $366,176.68.
Some evidence was given concerning a livestock mortgage given to the Bank by Mapplelane and dated 30 October 2002. However, as no relief was sought in the amended statement of claim in relation to the livestock mortgage, it is unnecessary to deal with that evidence.
Mr Moss testified that he was contacted by Mr Bowden in November 2002 and informed that they required additional finance to complete the purchase of a property at Wunghnu and that on 18 November 2002 he obtained the signature of Dallas to a loan application that led to letters of offer in January 2003 (see below) and that he took the letters and other related documents to Mr Bowden and Dallas and obtained the necessary signatures.
By letter dated 20 January 2003 from the Bank to Mapplelane, the Bank offered to make available a trading limit facility to a limit of $125,000. The letter set out the interest rate and contained or incorporated various terms and conditions (including the Facility Terms) and noted that a number of securities were already held including the Deed of Charge and the guarantee from Dallas. The letter required provision of a further security, namely, a registered mortgage “over purchase property covered by Certificate of Title Volume 10352 Folio 198” (“the Wunghnu property”). The letter was signed in the space provided for acceptance by Dallas, on behalf of Mapplelane, and dated 21 January 2003.
By a further letter dated 20 January 2003 from the Bank to Mapplelane, the Bank offered to make available a “Trust Term Loan Facility” to a limit of $690,000 for the stated purpose of assisting Mapplelane in purchasing property. Securities were noted as in the letter dealing with the trading limit facility and, again, a first mortgage over the Wunghnu property was required. The letter was signed in the space provided for acceptance by Dallas, on behalf of Mapplelane, and dated 21 January 2003.
The Bank sued upon the trading limit facility of January 2003 but placed primary reliance upon a later agreement. The Bank did not sue upon the Trust Term Loan Facility but said that the amount due thereunder had been taken up in a later agreement upon which reliance was placed.
By a mortgage (registered on 7 February 2003 in the Office of Titles, No. AB862281Y), Mapplelane mortgaged all its estate and interest in the Wunghnu property to the Bank in consideration of and to better secure loans, advances or financial accommodation provided by the Bank to Mapplelane. The Wunghnu mortgage was signed by Dallas on behalf of Mapplelane. The mortgage incorporated Memorandum of Common Provisions No. AA709 (“the MCP”). In the mortgage, Mapplelane covenanted to pay the secured money to the Bank in accordance with its obligations under any relevant document – the effect of this is, under the MCP, that the mortgage is security for all present and future obligations of Mapplelane to the Bank.
The evidence shows that the Trust Term Loan Facility was primarily comprised of two amounts, namely, the sum of $366,176.68 being principal and interest due under the First Term Loan Agreement and the further sum of $299,954.57 advanced to assist in the purchase of the Wunghnu property. The total of these amounts together with associated expenses and fees and accrued interest resulted in an amount of $680,319.37 being owed by Mapplelane under this facility as at 1 April 2003.
In June 2004, Mr Moss became the Regional Banking Manager and Richard John Barry, also employed by Elders Ltd, became the District Finance Manager at the Shepparton branch of the Bank. From June 2004 until June 2005 (when Mr Moss left his employment with Elders Ltd) he and Mr Barry shared the day to day responsibilities for the accounts associate with the Bowdens. In about September 2004 Mr Bowden advised Mr Moss that he had established another company, Meadowlands Property and Investment Pty Ltd (“Meadowlands”) for various reasons and subsequently moneys were also advanced to Meadowlands.[7]
[7]A proceeding by the Bank against Meadowlands was struck out because the company had been deregistered.
In 2004 a company, Corporate Farms Pty Ltd (“Corporate Farms”) owned three adjacent properties at Blighty in the area of Deniliquin in New South Wales. Mr Wolfgang Wagner was at all relevant times the Australian manager of Corporate Farms and managed these properties which ran dairy cattle. Mr Wagner had discussions with Mr Bowden concerning the sale or lease of these properties but the only relevant agreement that was concluded was an agreement dated 28 August 2004 between Corporate Farms and Mr Bowden and/or his nominee (“the Corporate Farms agreement”). The Corporate Farms agreement recited that Corporate Farms was the owner of a herd of 596 cows and that Corporate Farms agreed to lease the herd to Mr Bowden and/or his nominee for the rental payments therein set out until 31 July 2007. There was also a mechanism agreed for purchase of the herd but this did not happen. Mr Wagner gave evidence about what transpired in relation to this agreement to which I shall later refer.
By letter dated 20 October 2004 (but not purportedly signed by the defendants until 12 April 2005), the Bank wrote to Mapplelane, as trustee for the Bowden Family Trust, offering a term loan facility on the terms and conditions therein contained. The purpose of the facility was expressed as being “to assist the borrower in restructuring existing facilities, formalize current excess and put in place specific debt reduction plan…” and the facility limit was $1M. The letter listed a number of securities already held (including the guarantee and indemnity from Dallas) and required further securities, including a first registered mortgage over the property described in Certificate of Title Volume 9310 Folio 156 (“the Riverlands property”). The letter referred to three guarantors including Dallas and provided that “[b]y acceptance of this letter of offer, each guarantor acknowledges that…the guarantee and indemnity referred to…is unlimited and is not limited to moneys owing to the bank under, or in relation to, the facility.” The letter made provision for acceptance of the offer not only by Mapplelane but by the individual guarantors including Dallas. It is apparent, and I am satisfied, that the references to the guarantee given by Dallas relate to the 2002 guarantee.
By a mortgage dated 2 February 2005 (registered on 23 February 2005 in the Office of Titles, No. AD461609J), Dallas mortgaged to the Bank all his estate and interest in the Riverlands property in consideration of and to better secure loans, advances or financial accommodation provided by the Bank to him or to such other person as he should direct. I am satisfied that the mortgage was signed by Dallas and witnessed by his father, Mr Bowden. In his witness statement Dallas said that the mortgage was never executed by him and that the signature appearing thereon was a forgery. In his evidence in chief, Dallas confirmed what appeared in his witness statement, namely, that his purported signature on the mortgage was not his signature.[8] However, in cross-examination,[9] the following exchange occurred:
[8]See transcript p.326.
[9]See transcript p.531.
Q: Can you go to p.530 of the Court Book please, Mr Bowden?
…
Q:Now, that’s the mortgage for Riverlands. Now, I’m a bit confused. At p.531 is that not your signature?
A: It appears to be my signature.
Q: That is your signature, is it?
A: Yes.
Q:So when you say in your witness statement that it’s not, you’re wrong there. Correct?
A: I don’t know. It appears to be, but the date on the first page…
Q:Well, no, let’s just deal with this step by step. That’s your signature, correct?
A: Looks to be.
These answers by Dallas contradicting both his witness statement and his evidence in chief did not engender confidence in his evidence. Counsel for the Bank went on to mention to Dallas that the Riverlands mortgage had been registered and that therefore he must have made the duplicate Certificate of Title available to the Bank. Dallas said that he did not know where the duplicate Certificate of Title for Riverlands was at the start of 2005 but agreed that it was a fair assumption that the Bank “got it somehow.” Shortly thereafter, Dallas said that the signature of the witness underneath his signature appeared to be that of his father.
By the mortgage of the Riverlands property, Dallas covenanted to pay the secured money to the Bank in accordance with his obligations under any relevant document. The mortgage incorporated the provisions contained in the MCP. Under the MCP, “secured money” is defined to include all moneys now or in the future owing by the mortgagor to the Bank including any moneys payable by the mortgagor, whether as principal debtor or surety and whether payable before or after the date of the mortgage. Further, “relevant document” is defined to include any letter of offer and any collateral security given by the mortgagor to the Bank and any other agreement or arrangement made between the mortgagor and the Bank. In turn, “collateral security” is defined to mean any instrument which then or in the future created an obligation to pay, or which was entered into as security for payment of any of the secured money, including any guarantee or guarantee and indemnity.
In substance, Mr Moss testified that, on 12 April 2005, he had personally witnessed the execution by Dallas of the Bank’s letter of offer dated 20 October 2004. Mr Moss had no specific recollection of that event but based his testimony upon his invariable practice when obtaining and witnessing signatures. On the other hand, Dallas testified that Mr Moss had brought this letter to him and his father in October 2004, that they looked at it and “rejected it on the spot.” Dallas further testified that he did not sign the acceptance on this letter or sign it as guarantor and that it was not his signature which appeared in either of the spaces provided. In support of this testimony, he added that for the entirety of the calendar year 2005 he was residing at Deniliquin and working on land owned and operated by Meadowlands. Dallas said that he did not speak to anyone from the Bank in 2005 because he was in Deniliquin seven days a week. He said that, as a result, this was a “forged transaction.” I accept the evidence of Mr Moss and I reject the evidence of Dallas in these respects for reasons that follow.
I found Mr Moss to be a credible witness. I am sure that he would not have forged the signatures of Dallas on the relevant document. Of course, someone else, perhaps outside the Bank’s camp, may have done so but I further consider it to be improbable that Mr Moss would have purportedly witnessed those signatures without having been present when Dallas made them. On the other hand, Dallas was, I regret to say, a most unimpressive witness whose evidence lacked any conviction and in whose uncorroborated evidence I am unable to have any confidence. With regard to Dallas’ statement that he was residing at Deniliquin for the entirety of the calendar year 2005, he conceded that he did from time to time visit the farm properties near Shepparton. As a result it cannot be said that it would have been impossible for Mr Moss to have witnessed his signatures in April 2005. Adding to the improbability of Dallas’ account, although Dallas denied that it was his signature as guarantor that had been purportedly witnessed by Mr Moss,[10] he said that the signature on the same page, also purportedly witnessed by Mr Moss, was his father’s signature.[11]
[10]See the Court Book (exhibit “A”) p.541.
[11]See transcript p.380.
The amount claimed by the Bank under the facility said to be established by the letter dated 20 October 2004 (“the Second Term Loan Agreement”) is constituted by a consolidation of the amounts due to the Bank by Mapplelane under all of the earlier facilities to which I have referred together with interest thereon.
Bernard John O’Dea gave evidence that at relevant times he was a stock agent employed by Elders Ltd but that he had never acted for or on behalf of the Bank. Mr O’Dea said that he had business dealings with the Bowden family over a period of years. He said that in November 2005 he saw Mr Bowden at the Shepparton sale yards. Mr Bowden told him that he wanted to sell some of his stock and dairy cattle that he had at Blighty in New South Wales. Mr O’Dea suggested that he would introduce Mr Bowden to Lawrence Patrick Flanagan who was an expert in dairy cattle sales. Mr Bowden agreed with this suggestion. Later that month, by arrangement, Mr O’Dea and Mr Flanagan met Mr Bowden at his farm at Blighty. Mr O’Dea testified that the cattle were in such condition that Mr Flanagan said that they would be very difficult to sell. Mr O’Dea said that there was no discussion of possible price or numbers of cattle that might be sold.
Mr Flanagan testified that he was a stock agent employed by Elders Ltd from 1998 to 2009, having previously been a farmer for some thirty years. Mr Flanagan said that he had never been employed by or represented the Bank. Mr Flanagan testified in considerably greater detail concerning this visit with Mr O’Dea to the farm at Blighty. Mr Flanagan gave evidence of what he learned on that occasion about the condition of the farm and of the cattle and the state of milk production. He estimated that, after driving around the paddocks, he had seen around 500 to 600 cattle. Mr Flanagan testified that Mr Bowden told him that he wished to sell the dairy cattle and that he told Mr Bowden that it was too late to sell them because the cattle that had been dried off could not be sold as milking cattle and those that were being milked only once per day would be difficult to sell. Mr Flanagan said that, although he could not recall the conversation in detail, he might have said that the cattle might be worth $500 to $600 each and the better quality ones might be worth up to $1000. Mr Flanagan said that other than this they did not discuss numbers of possible prices because few of the cattle were in a condition to be sold.
Mr Flanagan referred to a visit by him, a few days later, to the Bowdens’ farm near Shepparton on which occasion there was some discussion concerning some heifers and some yearlings but, as far as I can ascertain, this event has no relevance to the issues in this proceeding.
Returning to the Corporate Farms agreement, Mr Wagner testified that, in the second half of 2005, he noticed the number of cattle on the Blighty properties was diminishing, that he questioned Mr Bowden about this and that Mr Bowden told him that he had moved some of the cattle to other properties (contrary to the terms of the agreement). Mr Wagner further testified that, by late 2005, rental payments under the Corporate Farms agreement were in arrears and that, after discussion, an agreement was reached regarding the sale of the cattle owned by Corporate Farms. Mr Wagner gave in evidence two documents that indicate that Mr Bowden must have nominated Meadowlands as the lessee of the Corporate Farms herd. The first document is a fax from Meadowlands to Corporate Farms notifying that Meadowlands would “like to exercise its right of option to purchase the livestock.” The second document is a letter from Corporate Farms to Meadowlands and signed both on behalf of Corporate Farms and also by Mr Bowden on behalf of Meadowlands, dated 8 December 2005. In the letter, Corporate Farms requires the herd to be sold in its name and the proceeds to be paid directly from the selling agent to Corporate Farms. The total amount to be paid by Meadowlands to Corporate Farms was $414,700.
Mr Wagner testified that his “managers” in New Zealand decided that the herd should be “repossessed” and sold and that he phoned Mr Bowden in late December 2005 to advise him of this and that Mr Bowden told him to “go ahead”. Mr Wagner said that, as a result, on 30 December 2005 he attended with others at the Blighty property, located 322 cattle and removed them by truck. Mr Wagner said that on that day he was accompanied by Mr Flanagan of Elders Ltd who was there as the stock agent for Corporate Farms. Mr Wagner testified that he returned to the Blighty property on 14 January 2006 and located and removed 46 more cattle. Of these cattle, 123 were sold as “cull cows” and the balance were sold in a number of separate sales with Elders Ltd acting as agents for Corporate Farms. The total amount obtained by Corporate Farms was approximately $280,000. The balance of the herd were never located.
Mr Flanagan confirmed Mr Wagner’s evidence. He said that Mr Wagner had asked him to go with him to the farm at Blighty and “help out in which case he would sell the cattle through me.” Mr Flanagan said that he went to the property with his son, and assisted in rounding up the cattle. Mr Flanagan added that he had asked Mr Wagner whether it was clear that Corporate Farms had the right to move the cattle and Mr Wagner assured him that it did.
Mr Barry was the District Banking Manager employed by Elders Ltd, for the Bank, at the Shepparton branch from June 2004 onwards but he took primary responsibility for the accounts associated with the Bowdens from about June 2005 onwards. From time to time he communicated with Mr Bowden concerning the Mapplelane and Meadowlands accounts. He had a meeting with Mr Bowden concerning the accounts on 7 September 2005 and other meetings with him on 10 and 23 February 2006. Mr Barry said that the Bank had no involvement at all in any sales of cattle owned by Mapplelane, Meadowlands or the Bowdens and, specifically, no involvement or connection with the cattle sold by Mr O’Dea through Mr Flanagan.
Defences
Apart from denials and non-admissions, the defendants in their amended defence relied upon the following positive defences.
In para 15 of the amended defence, they alleged that the purported signature of Dallas on the 2002 guarantee was not his signature but was a forgery. As indicated above,[12] this defence was contradicted by the evidence.
[12]See para [16].
In paras 5 and 16A of the amended defence, they alleged that the purported signatures of Dallas written on the letter of offer dated 20 October 2004 and also in relation to the guarantee therein referred to were not his signatures but were a forgery. For the reasons stated earlier,[13] this defence fails.
[13]See para [35].
By para 76 of the amended defence, they alleged that by an agreement made in November 2005 between the Bank and Meadowlands it was agreed that livestock in the possession of Meadowlands at a property near Deniliquin numbering approximately 1120 would be sold at a price net of commission of $750 per head and that the proceeds of sale would be offset against any moneys owed by the defendants to the Bank. This alleged agreement was particularised as being oral and constituted by conversations between Mr Bowden with Messrs O’Dea and Flanagan “employees of Elders VP[14] the agent for the [Bank].” By paras 77 and 78 of the amended defence they alleged that approximately 1,456 head of cattle were removed from the property by persons acting on behalf of the Bank but that, in breach of the agreement, the Bank had not applied the proceeds of sale of the livestock against moneys owed by the defendants to the Bank. By para 79 of the amended defence they claim an entitlement to set off the proceeds of sale estimated to be over $1M against the moneys owed to the Bank.
[14]Elders VP is apparently a business name utilised by Elders Ltd.
No satisfactory evidence was produced by the defendants in relation to this alleged agreement and set off. At the outset, Mr Bowden indicated that he would not be calling himself to give evidence on behalf of Mapplelane. On the other hand, Dallas said that he intended to call his father, Mr Bowden, as a witness. In the event, neither of the defendants called Mr Bowden as a witness. The evidence from Messrs O’Dea, Flanagan and Barry, which I accept, showed that there was no agreement in relation to the sale of livestock of the kind alleged by the defendants, that such cattle as were removed from the farm at Deniliquin were the property of Corporate Farms and that the Bank had no involvement in the sale of livestock whether owned by Corporate Farms, Meadowlands or either of the defendants. As Mr Bowden was not called to give evidence, the evidence called by the Bank was uncontradicted, supported by some documentary evidence and credible. I should add that some very limited evidence was adduced from Dallas concerning the making of an offer for cattle but the evidence did not support the agreement alleged and in any event I found it lacking in credibility. Accordingly, the defendants’ claim to a set-off fails.
Another defence informally advanced on behalf of the defendants was that the First Term Loan Agreement and the 2002 guarantee were unenforceable because the proposed purchase of Glenlea had not taken place and that this was a condition upon which their enforceability depended. This defence is not made out. The proposed purchase of Glenlea was only one of the purposes for which these agreements were entered into. Indeed, substantial funds were advanced by the Bank on the faith both of the agreement and the guarantee after the defendants knew that the Glenlea transation was not proceeding. In any event the terms of the First Term Loan Agreement (to the limit provided) and the 2002 guarantee (unlimited) covered present and future moneys owing by Mapplelane to the Bank.
Conclusions
The Bank has proved the various loan agreements and the guarantee upon which it relies. The service of requisite demands by or on behalf of the Bank was also proven. The defendants have failed to establish any of the defences upon which they relied.
The Bank put in evidence certificates, both pursuant to the conclusive evidence clause contained in the various agreements sued upon and also pursuant to s.55B of the Evidence Act 1958, which proved the relevant financial transactions and the amounts due for principal, interest and other amounts.
The Bank established that the resulting total amount owing to it by Mapplelane as at 9 February 2009 was $1,489,615.31.[15]
[15]Comprising principal of $1,087, 710.05 plus interest, but excluding costs.
The Bank is entitled to judgment against Mapplelane for the said sum together with judgment for possession of the Wunghnu property pursuant to Mapplelane’s mortgage thereof in favour of the Bank.
I am satisfied that the Bank is entitled to judgment against Dallas for the same amount pursuant to the 2002 guarantee, together with judgment for possession of the Riverlands property pursuant to Dallas’ mortgage thereof in favour of the Bank.
The Bank is also entitled to a declaration that the Deed of Charge is valid and enforceable against Mapplelane, according to its terms.
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