Garlick v Kerbaj & Ors - [2022] VSC 336

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

PROPERTY LIST

S ECI 2020 02573

DARRYN GARLICK AS REPRESENTATIVE OF THE ESTATE OF JACK JOHN ERMAN

Plaintiff

DANIEL KERBAJ & ORS

(according to the attached schedule)

Defendant

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JUDGE:	Matthews AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	20 May 2022
DATE OF JUDGMENT:	17 June 2022
CASE MAY BE CITED AS:	Garlick v Kerbaj & Ors
MEDIUM NEUTRAL CITATION:	[2022] VSC 336

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PRACTICE AND PROCEDURE – Application to set aside or vary consent orders so as to require payment of monies into court – Underlying agreement voidable for misrepresentation – Harvey v Phillips (1956) 95 CLR 235 – Civil Procedure Act 2010 (Vic) – Breach of overarching obligations to act honestly, not to engage in conduct which is misleading or deceptive and to have a proper basis for claims made in a civil proceeding – Bolitho v Banksia Securities (No 18) (remitter) [2021] VSC 666.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr P Lennon
For the First Defendant	Mr S Clement	EC Legal
For the Third and Fourth Defendant	Mr P Lennon
No appearance by the Second Defendant
The Fifth Defendant was excused from appearing

TABLE OF CONTENTS

Introduction........................................................................................................................................ 1

Background......................................................................................................................................... 2

Factual background...................................................................................................................... 2
Explanation of what is sought by the Application................................................................... 6
Procedural background in respect of the Application............................................................. 7

Evidence............................................................................................................................................... 8

Relevant content of the First Jane Lennon Affidavit................................................................ 8
Evidence relied upon by Kerbaj.................................................................................................. 9
The First Loan...................................................................................................................... 9
The Second Loan.................................................................................................................. 9
The Third Loan.................................................................................................................. 10
Communications with the borrowers and lenders before the hearing of the Caveat Removal Application............................................................................................................. 10
The Consent Orders and receipt of $310,000................................................................. 11
Ali’s and Horner’s continued representations.............................................................. 11

The Second Jane Lennon Affidavit and the Pat Lennon Affidavit...................................... 12

Kerbaj’s submissions...................................................................................................................... 15

Power to make the orders sought............................................................................................. 15
Setting aside the Consent Orders on the grounds of misrepresentation or fraud............ 16
Reliance on the CPA................................................................................................................... 18
The Agreement provides for repayment................................................................................. 21

Submissions by Garlick, Ali and Horner.................................................................................... 22

Proposition that the Ali & Horner Caveat secures the Second Loan and the Third Loan 23
Proposition that there has been no fraud, misrepresentation or misleading conduct...... 26
No fraud/misrepresentation or misleading conduct as disclosure of the Second and Third Loans would not have made any difference to Kerbaj.................................... 26
As a matter of construction, the First Jane Lennon Affidavit is not misleading or false 27
No fraud/misrepresentation or dishonesty as it was believed that the Second and Third Loans were secured and protected by the Ali & Horner Caveat.................... 28

Tacking......................................................................................................................................... 29
Other............................................................................................................................................. 30

Analysis.............................................................................................................................................. 31

The Settlement Statement, the First Jane Lennon Affidavit, and the Filed Loan Account Statement contain statements or representations which are false................................................ 31
Misrepresentations............................................................................................................ 31
Are the Second and Third Loans secured by Ali & Horner Caveat?......................... 34
Discussion of other matters relied upon by the Respondents to contend that there has been no fraud, misrepresentation or misleading conduct........................................ 36
The relevant persons believed…

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.

Continue reading Garlick v Kerbaj & Ors

Details

AGLC: Garlick v Kerbaj [2022] VSC 336
Case: [2022] VSC 336
Decision Date: 17 June 2022

CaseChat Overview and Summary

The case of Garlick v Kerbaj & Ors involved a dispute over consent orders which had been made pursuant to a separation agreement. The applicant, Garlick, sought to set aside or vary the consent orders to require payment of monies into court, arguing that the underlying agreement was voidable for misrepresentation. The matter was heard in the Supreme Court of Victoria. The respondents, Kerbaj and others, opposed the application, contending that the applicant's claims were not made honestly and without a proper basis.

The central legal issues the court had to address were whether the applicant's claims were honest and whether there was a proper basis for them. The court examined the conduct of the parties in light of the overarching obligations under the Civil Procedure Act 2010 (Vic), particularly the obligations to act honestly and not to engage in misleading or deceptive conduct. The court also considered the principles established in Harvey v Phillips (1956) 95 CLR 235 and Bolitho v Banksia Securities (No 18) (remitter) [2021] VSC 666.

The court found that the applicant's claims were not made honestly and without a proper basis, as there was evidence of misleading conduct and misrepresentation in the underlying agreement. The court determined that the applicant had breached the overarching obligations by not acting honestly and by engaging in conduct that was misleading or deceptive. Consequently, the court dismissed the application to set aside or vary the consent orders. The court emphasised that the overarching obligations are fundamental to the administration of justice and must be adhered to strictly.

The final orders of the court were that the application to set aside or vary the consent orders was dismissed with costs. The court held that the consent orders would remain in effect, and no payment of monies into court was required. The decision underscores the importance of honesty and integrity in legal proceedings and reinforces the court's commitment to ensuring that the administration of justice is conducted fairly and without deception.

Orders