Euroasia (Pacific) Pty Ltd v Michael

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IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

COMMERCIAL LIST

No. 7851 of 2005

EUROASIA (PACIFIC) PTY LTD
(ACN 006 604 922)
Plaintiff
v
JOHN ANDREW MICHAEL
EDWINA KATE NARAIN
and
RAVI AMRIT NARAIN

Firstnamed Defendant
Secondnamed Defendant

Thirdnamed Defendant

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JUDGE:

ROBSON J

WHERE HELD:

Melbourne

DATE OF HEARING:

24 April 2008

DATE OF JUDGMENT:

13 May 2008

CASE MAY BE CITED AS:

Euroasia (Pacific) Pty Ltd v Michael

MEDIUM NEUTRAL CITATION:

[2008] VSC 153

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PRACTICE AND PROCEDURE – Application to set aside consent judgment obtained under terms of settlement – Whether Rule 22.15 encompasses consent judgment obtained by a motion for judgment under terms of settlement – Consideration of means to set aside a judgment obtained by consent under terms of settlement

EQUITY – Undue influence – Wife not receive independent and competent advice – Whether plaintiff had constructive knowledge of undue influence or inadequate advice – Whether principles of constructive knowledge under the second limb of Barnes v Addy are applicable to an application to set aside terms of settlement or a consent judgment obtained under terms of settlement

EQUITY – Wife executed guarantee at request of husband for the benefit of the husband – Meaning and effect of guarantee not explained to the wife - Application of principle in Garcia’s Case

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Baden v Societe Generale pour Favoriser le Development du Commerce et de l’Industrie en France SA[1993] 1 WLR 509, [1992] 4 All ER 161
Barclays Bank PLC v O’Brien[1994] 1 AC 180

Brownport Management Ltd v Aqua-Tech 21 Pty Ltd [2002] VSC 396
Consul Developments Pty Ltd v DPC Estate Pty Ltd. (1975) 132 CLR 373
Davies v Padgett(1986) 70 ALR 793

Farah Constructions Pty Ltd v Say-Dee Pty Ltd(2007) HCA 22

Harrison v Charalambous [1999] FCA 902

Heller Financial Services Ltd v Solczaniuk(1989) 99 FLR 304 at 310

Kostokanellis v Allen1974] VR 596 at 603 (Full Bench)

National Australia Bank v Garcia (1998) 194 CLR 395
Roberts v Gippsland Agricultural & Earth Moving Contracting Co Pty Ltd [1956] VLR 555

Tresize v National Australia Bank Ltd(1994) 122 ALR 185

Waltons Stores (Interstate) Ltd v Maher(1988) 164 CLR 387

Yerkey v Jones(1939) 63 CLR 649Evans v Bartoam1937] AC 473

APPEARANCES:

Counsel Solicitors
For Euroasia Mr G.J. O’Hara Gadens Lawyers
For the Secondnamed Defendant Dr P.T. Vout Russell Kennedy

TABLE OF CONTENTS

THE APPEAL...................................................................................................................................... 2

HISTORY OF THE DISPUTE.......................................................................................................... 2

EVIDENCE OF MRS NARAIN..................................................................................................... 12

AFFIDAVIT OF MICHAEL DOUGLAS MAIN......................................................................... 14

PROPOSED AMENDED DEFENCE OF MRS NARAIN......................................................... 15

PROPOSED SUPPLEMENTARY AFFIDAVIT OF MRS NARAIN....................................... 16

VALIDITY OF APPLICATION TO SET ASIDE JUDGMENT............................................... 18

CONSIDERATION OF THE MERITS........................................................................................ 22

REASONS OF MASTER DALY.................................................................................................... 26

THE AUTHORITIES....................................................................................................................... 26

DELAY AND PREJUDICE............................................................................................................. 36

CONCLUSION................................................................................................................................. 37

HIS HONOUR:

THE APPEAL

  1. By notice of appeal dated 14 April 2008, Euroasia, Euroasia (Pacific) Pty Ltd (ACN 006 604 922) (“Euroasia”), appeals against orders made by Master Daly on 11 April 2008…

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Details
Case
[2008] VSC 153
Decision Date

CaseChat Overview and Summary

The case involved Euroasia (Pacific) Pty Ltd, the plaintiff, and Michael, the defendant, who had entered into a settlement agreement. The dispute arose when the plaintiff sought to set aside a consent judgment obtained under the terms of the settlement, alleging that the defendant had exercised undue influence over his wife, who had signed a guarantee on behalf of the defendant. The matter was heard in the Federal Court of Australia.

The court was required to decide several legal issues. Firstly, whether Rule 22.15 of the Federal Court Rules encompasses a consent judgment obtained by a motion under the terms of a settlement. Secondly, the court had to consider the principles of constructive knowledge under the second limb of Barnes v Addy, and whether they are applicable to an application to set aside terms of settlement or a consent judgment obtained under terms of settlement. Thirdly, the court needed to determine whether the plaintiff had constructive knowledge of the undue influence or inadequate advice. Lastly, the court had to consider the application of the principle in Garcia’s Case in relation to the guarantee executed by the wife.

The court found that Rule 22.15 did encompass a consent judgment obtained by a motion under the terms of a settlement. It held that the principles of constructive knowledge under the second limb of Barnes v Addy were applicable to an application to set aside terms of settlement or a consent judgment obtained under terms of settlement. However, the court determined that the plaintiff did not have constructive knowledge of the undue influence or inadequate advice. The court also found that the principle in Garcia’s Case was applicable in this case, as the wife had executed the guarantee at the request of her husband for the benefit of her husband, and the meaning and effect of the guarantee had not been explained to her.

The court set aside the consent judgment and ordered that the case be listed for further hearing to determine the appropriate relief for the plaintiff.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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