Esanda Finance Corporation v Terry Shields Pty Ltd

[1991] FCA 252

JUDGMENT NO. 252, ........ ...., 91 -

IN T H E FEDERAL COURT O F AUSTRALIA	)
)
NEW SOUTH WALES DISTRICT REGISTRY	No. 270 ot 1990

)

GENERAL DIVISION )

BETWEEN:  ESANDA FINANCE CORPORATION

Applicant

AND:  TERRY SHIELDS PTY LIMITED

First Respondent

ALLEN CYRlL TAUNTON

Second Respondent

TERRY SHIELDS PTY LIMITED

Cross Applrcant

ALLEN CYRlL TAUNTON

First Cross-Respondent

AUSTRALIA & NEW ZEALAND

BANKING GROUP LIMITED

Second Cross-Respondent

for the sum of $80,000 and costs.

m:	Davies J.
Date:	10 May l 9 9 1
Place:	Sydney  l O M A Y 1991

FEDERAL COURT OF

AUSTRALIA

MINUTES O F ORDER	PRINCIPAL	I	.
REGISTRY

T H E COURT ORDERS THAT:  ---L -

1.            There be judgment in favour of the applicant against the second respondent

2.           There be judgment on the cross-claim in favour of the first respondent against the second respondent for the sum of $6,246 and costs, such costs to include the costs recoverable by the applicant against the first respondent.

Note:  Settlement and entry of orders is dealt with in Order 36 of the Federal Court
Rules.

IN THE FEDERAL COURT OF AUSTRALIA	) )
NEW SOUTH WALES DISTRICT REGISTRY	) No. 270 of 1990
) )

BETWEEN:  ESANDA FINANCE CORPORATION
LIMITED

Applicant

TERRY SHIELDS PTY LIMITED

First Respondent

ALLEN CYRIL TAUNTON

Second Respondent

TERRY SHIELDS PTY LIMITED

Cross Applicant

ALLEN CYRIL TAUNTON

First Cross-Respondent

AUSTRALIA & NEW ZEALAND

BANKING GROUP LIMITED

Second Cross- Respondent

m:	Davies J.
m:	10 May 1991
Place:	Sydney

REASONS FOR JUDGMENT

These proceedings were brought by Esanda Finance Corporation Llm~ted ("Esunda"),

a finance company, against Terry Shields Pty Limited ("Terry Shields"), a motor dealer and Allen Cyril Taunton ("Taunton"), who was formerly an employee of Terry Shields. There is a cross-application brought by Terry Shields against Taunton and Australia & New Zealand Banking Group Limited ("ANZ").

In 1989, finance was sought by a Mr George Alfred Meier ("Meler") from Esanda for

the acquisition of a vehicle said to he a classic SSK handcrafted sports car, a hand produced

replica of an SS Mercedes Benz sports car. Esanda required a valuation of the vehicle by an independent assessor and, subsequently, received a letter dated 11 December 1989 on the

letterhead of Terry Shields and signed by Taunton which spoke well of the vehicle and said

that "it would find a ready market at a retail price of $95,000 and would support a wholesale

price of $75,000 to $76,000."

Esanda approved the finance and subsequently recerved an invoice from Terry Shields showing a sale of such a vehicle of which an engine number and chassis number were specified. The sale was to Meier. The price was said to be $95,000 of whrch $20,000 had been paid leaving a balance of $75,000 to be financed by Esanda.

Meier signed a hire purchase agreement with Esanda on 18 December 1989 and on

that day Esanda provided a bank cheque of $75,000 whrch was credited to the accuunt of

Terry Shields.

On the same day, on the instructrons of Taunton, Terry Shields drew a cheque for

$73,500 in favour of Classic Handcrafted Cars. The cheque however was paid into Meier's

account. There is in evidence an invoice from Classic Handcrafted Cars to Terry Shields for one SSK classic sports car of the correct engrne and chassrs numbers, the invoice shows a

price of $93,500, of which $20,000 was said to have been paid. However, it appears that

Classic Handcrafted Cars knows nothing of any such vehicle and had no dealing with Meier

or with Taunton. As the vehicle has never been seen, it is probable that what occurred was a

fraud in which Meier and Taunton collaborated.	Taunton did not appear a t the hearing to
contend to the contrary.

On 4 March 1991, it was ordered by consent that there he judgment for Esanda

against Terry Shields in the sum of $80,000 and there be judgment for Terry Shields against

ANZ in the sum of $73,500.

At the trial on 4 March, evidence led by Esanda proved the following sums:.

"Cash price paid by Esanda	$75,000.00
Less payments received	$ 4.640.82
$70,359.18
Plus interest on overdues to 1/3 /90	$ 1,302.57
Plus agents costs	S 20.00
-
Plas F.I.D.	$ 63.51
$71,745.26
Plus statutory interest a t

Supreme Court rates -

From	1/3 /90 to 31/8 /90
(184 days) @ 21% =	$7,595.17
From 1/9/90 to 28/2 /91
(180 days) @ 19% =	$6,722.43

From	1 / 3 / 9 1 to	4 /3 /91
(3 days) @ 17% =	$100.25	$14.417.85

+ $33.42 daily"

As these sums exceed the amount for which judgment has been given against Terry Shields, it seems to me that justice would better seem to be done if the amount of $80,000, the amount of the judgment against Terry Shields, was the sum adopted.

There will be judgment in favour of Esanda against Taunton in the sum of $8U,000

plus costs.

The judgment in favour of Terry Shields against Taunton will be, as sought, the net sum of $5,000 plus interest. Taunton should pay the costs of the cross-applicat~on	and any
costs payable by Terry Shields to Esanda.
I certify that this and the preceding 3 pages are a true copy of the reasons for judgment herein of the Honourable Mr Justice Dnv S.

/ I	t"
J

Date:  1U May 1991

Counsel for the appellant:	Mr N. Cotman
Solicitors for the appellant:	Dunhill Madden Butler
Counsel for the respondent:	Mr D.J. Higgs & Mr P. O'Loughlin
Solicitor for the respondent:	Messrs Coleman & Greig
Dates of hearing:	4 March 1991
Date of judgment:	10 May 1991