Garden Estate Hackham Pty Ltd v Angas Securities Ltd - [2018] SASC 125

SUPREME COURT OF SOUTH AUSTRALIA
(Civil: Application)
GARDEN ESTATE HACKHAM PTY LTD v ANGAS SECURITIES LTD
[2018] SASC 125
Judgment of The Honourable Justice Blue
5 September 2018
PROCEDURE - SUPREME COURT PROCEDURE - SOUTH AUSTRALIA - PROCEDURE UNDER RULES OF COURT - PLEADINGS - GENERALLY
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - PLEADINGS - STRIKING OUT
LIMITATION OF ACTIONS - CONTRACTS, TORTS AND PERSONAL ACTIONS - APPLICATION OF THE STATUTES TO PARTICULAR CAUSES OF ACTION
LIMITATION OF ACTIONS - CONTRACTS, TORTS AND PERSONAL ACTIONS - WHEN TIME BEGINS TO RUN - PARTICULAR CAUSES OF ACTION
Application for permission to file a replacement statement of claim following the strike out of the original statement of claim.
The plaintiffs each entered into a loan contract with the first defendant to provide finance to assist in the purchase of properties intended to be used as retirement villages. The plaintiffs plead various causes of action in relation to the dealings between the parties.
The defendants object to permission being granted to include various paragraphs of the proposed statement of claim on the ground that the cause of action is statute barred and/or the cause of action sought to be pleaded is untenable.
Held:
1. There is no basis on which it can be concluded on the face of the proposed statement of claim that the pleaded causes of action of breach of contract, unconscionable conduct and misleading conduct in respect of the alleged refusal to produce duplicate certificates of title are statute barred by section 35 of the Limitation of Actions Act 1936 (SA) or section 12GF of the Australian Securities and Investments Commission Act 2001 (Cth) respectively. Permission to introduce these causes of action should be granted (at [34],[37] and [40]).
2. The pleading of an economic duress cause of action is on the face of the proposed statement of claim statute barred by section 35 of the Limitation of Actions Act 1936 (at [52]). The pleaded facts are incapable of supporting an extension of time under section 48 of the Limitation of Actions Act 1936 (SA) (at [62]). Permission to introduce this cause of action should be refused (at [63]). Permission to introduce a cause of action of unjust enrichment should be refused because it is common ground that its fate is dependent on the fate of the economic duress cause of action (at [63]).
3. The pleading of a cause of action based on the interest provisions of the loan contracts comprising penalties does not disclose a tenable cause of action. Permission to introduce this cause of action should be refused (at [70] and [71]).
4. The plaintiffs should bring forward a further pleading of the unconscionable conduct cause of action in respect of the interest provisions so that further consideration can be given to whether permission to introduce this cause of action should be granted (at [78]).
Australian Securities and Investments Commission Act 2001 (Cth) ss 12CB, 12DA, 12DC, 12ED, 12GF; Limitations of Actions Act 1936

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.

Keep reading for free

Create a free CaseChat account to read Garden Estate Hackham Pty Ltd v Angas Securities Ltd and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2018] SASC 125
Decision Date: 5 September 2018

CaseChat Overview and Summary

Garden Estate Hackham Pty Ltd and Garden Estate Christies Pty Ltd brought proceedings against Angas Securities Ltd in the Supreme Court of South Australia. The plaintiffs sought to recover interest payments made on two loans provided by Angas Securities Ltd. The loans were provided to finance the purchase of properties by the plaintiffs, which were to be converted into retirement villages. The plaintiffs alleged that Angas Securities Ltd improperly charged interest at a higher rate than agreed upon, and sought damages for the overcharged interest. The central legal issue before the court was whether the plaintiffs' claims for damages based on overcharged interest were statute-barred. The court had to determine whether the plaintiffs' proposed statement of claim, which included claims for damages for overcharged interest, would be amenable to being struck out on the basis of limitation periods. The court examined the pleaded background, noting the terms of the loan agreements and the interest rates that were to apply. The court considered the complex nature of the issue of when the plaintiffs suffered loss and damage, and whether it was clear enough to warrant striking out the claim. The court found that the plaintiffs' proposed statement of claim was not so deficient that it would be amenable to being struck out, as it was not clear that a time limitation defence was bound to succeed. However, the court also noted that the plaintiffs had not provided sufficient details regarding the interest charged and paid, and directed the plaintiffs to provide this information before a final decision on the cause of action was made.

The court refused permission to include certain paragraphs in the plaintiffs' proposed statement of claim, and directed the parties to discuss appropriate orders. The court's decision was that the plaintiffs' claims were not so clearly statute-barred that they could be struck out, but the plaintiffs needed to provide more detailed information regarding the interest charged and paid. The court's decision left open the possibility that the plaintiffs' claims for damages based on overcharged interest could proceed, subject to the plaintiffs providing further information.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

It is common ground that the test whether permission should be granted is whether the proposed statement of claim would if filed be amenable to being struck out.Pleaded background The facts below are drawn from the proposed statement of claim and are set out for the purpose of understanding the pleaded background to the impugned paragraphs of the proposed pleading. They may or may not be disputed in due course. In October and November 2009, James Michalakas incorporated:1the first plaintiff Garden Estate Hackham Pty Ltd (Hackham Co) to purchase a property at Hackham (the Hackham property) on which were constructed 95 one-bedroom units used as senior citizens’ rental accommodation; 2the second plaintiff Garden Estate Christies Pty Ltd (Christies Co) to purchase a property at Christies Beach (the Christies property) on which were constructed 50 one-bedroom units used as senior citizens’ rental accommodation. Mr Michalakas intended to convert each property into a retirement village under the Retirement Villages Act 1987 (SA) (the Retirement Villages Act) by amongst other things applying to the Registrar-General for registration of a Retirement Village memorial on the title of each property. The first defendant Angas Securities Ltd (Angas) is a publicly listed company carrying on business amongst other things as a financier. In November 2009 Hackham Co entered into a contract to purchase the Hackham property for $4 million. In January 2010 Hackham Co entered into a contract with Angas (the Hackham loan agreement) under which Angas agreed to lend $2.6 million to Hackham Co for 12 months subject to extension secured amongst other things by first mortgage over the Hackham property and a fixed and floating charge over the assets of Hackham Co (the Hackham loan). In February 2010 Hackham Co settled the purchase of the property using amongst other things funds provided by Angas. In about November 2009 Christies Co entered into a contract to purchase the Christies property for $3.5 million. In February 2010 Christies Co entered into a contract with Angas (the Christies loan agreement) under which Angas agreed to lend $2.125 million to Christies Co for 12 months subject to extension secured amongst other things by first mortgage over the Christies property and a fixed and floating charge over the assets of Christies Co (the Christies loan). In March 2010 Christies Co entered into a contract with Angas under which Angas agreed to pay $1 million to Christies Co in connection with the purchase of the Christies property (addressed in more detail below). In April 2010 Christies Co settled the purchase of the property using amongst other things funds provided by Angas. Under each loan agreement, interest was payable monthly in advance at the rate of 22 per cent per annum (the Higher Rate) but Angas agreed to accept interest at the rate of 14 per cent per annum (the Lower Rate) during the first 12 months if amongst other things interest was paid on time and the borrower was not in default of any term of the loan agreement.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

The question when the plaintiffs suffered loss and damage is a complex one. It is unlikely that the position is so clear that the plea should be struck out on the ground that a time limitation defence is bound to succeed. However, the plaintiffs do not plead how much interest they were charged (and how it was calculated) or how much they paid from February 2010 onwards. This should be done before I make a final decision in respect of this cause of action.Conclusion Permission will be refused to include paragraphs 66, 67, 81, 82 and 113 to 120. I will hear the parties as to the appropriate orders to reflect my reasons for judgment.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.