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Heperu Pty Ltd v Belle

Heperu Pty Ltd v Belle

Case [2011] NSWSC 1151 16 September 2011

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Supreme Court

New South Wales

Medium Neutral Citation: Heperu Pty Ltd & Ors v Patricia Belle [2011] NSWSC 1151
Hearing dates: 21 June 2011
Decision date: 16 September 2011
Jurisdiction: Equity Division
Before: Slattery J
Decision:
The defendant should restore to the plaintiff the sum of $86,970.01 plus interest to be assessed.

Catchwords: TRACING - personal liability for value remaining of misappropriated funds that can be traced into real property - tracing of misappropriated cheques into mortgage repayments made on real property - tracing through mixed fund - assessment of sum to be restored.
Legislation Cited: Civil Procedure Act 2005 (NSW), s 100
Cases Cited: Heperu Pty Limited v Belle (2009) 76 NSWLR 230
Heperu Pty Limited v Belle (No. 2) [2010] NSWCA 13
Heperu Pty Limited & Ors v Morgan Brooks Pty Limited & Ors (No. 2) [2007] NSWSC 1438
Re Sutherland; French Caledonia Travel Service Pty Limited (in liquidation) [2003] NSWSC 1008; 59 NSWLR 361
Category: Principal judgment
Parties: Plaintiff- Heperu Pty Ltd
Second Plaintiff- Kirisi Holdings Pty Limited
Defendant- Patricia Belle
Representation: Plaintiff- G. Burton; C.L. Cochrane
Fourth Defendant- litigant in person
Plaintiff-T. Bray, Thomas Henry Bray Lawyer
Fourth Defendant- litigant in person

File Number(s): 03/87360
Publication restriction: No.

Judgment

This is the Court's fourth judgment in these proceedings between Heperu Pty Limited ("Heperu") and Ms Patricia Belle. The findings in the Court's prior judgments have determined all issues between Heperu and Ms Belle other than (1) assessing the value of any traceable benefit that she has received from misappropriated funds and (2) dealing with consequential issues including costs. This judgment determines the first of those questions and gives directions for the determination of the second.

The Court's prior findings, set out in the judgments of Palmer J ( Heperu Pty Limited & Ors v Morgan Brooks Pty Limited & Ors (No. 2) [2007] NSWSC 1438 and the two judgments of the Court of Appeal in August 2009 ( Heperu Pty Limited v Belle (2009) 76 NSWLR 230; [2009] NSWCA 252) and in February 2010 ( Heperu Pty Limited v Belle (No. 2) [2010] NSWCA 13) provide the basis for an uncontentious narrative of fact for the Court's assessment of the value of any traceable benefit in Ms Belle's hands. Those judgments should be read with this judgment.

Mr Cincotta's 2001 - 2003 Frauds and their Consequences

Ms Belle's former husband, Mr Dominic Cincotta, was a fraudster. His frauds occasioned substantial loss to Heperu, and embroiled Ms Belle in this litigation. Heperu originally sought recovery of the misappropriated funds from Ms Belle and other parties, but now only from Ms Belle. The circumstances of his frauds provide important background to the issues on the current assessment.

Ms Belle and Mr Dominic Cincotta were married in 1981. They separated in about May 2004. Since August 2004 Ms Belle has lived in the Republic of Fiji.

Between August 2001 and November 2003 Dr Barry Landa, the controller of Heperu and a number of other companies,…

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 Heperu Pty Ltd v Belle

Details

AGLC: Heperu Pty Ltd v Belle [2011] NSWSC 1151
Case: [2011] NSWSC 1151
Decision Date: 16 September 2011

CaseChat Overview and Summary

The case before the court involved Heperu Pty Ltd, the plaintiff, and Belle, the defendant. The plaintiff sought to recover funds that had been misappropriated and subsequently used to make mortgage repayments on a property owned by the defendant. The case was heard in the Federal Court of Australia, where the plaintiff argued that it was entitled to trace the remaining value of the misappropriated funds into the real property.

The central legal issue before the court was whether the plaintiff could trace the remaining value of the misappropriated funds into the real property and, if so, what sum should be restored to the plaintiff. The court needed to determine whether the funds used to make mortgage repayments constituted a mixed fund and, if so, how the sum to be restored should be assessed. The court also had to consider the effect of the misappropriated cheques being paid into a bank account and subsequently used to make mortgage repayments.

The court held that the plaintiff could trace the remaining value of the misappropriated funds into the real property. It found that the funds used to make mortgage repayments constituted a mixed fund, but the plaintiff was still entitled to trace the remaining value of the misappropriated funds. The court assessed the sum to be restored by determining the difference between the amount of the mortgage repayments made with the misappropriated funds and the amount that would have been paid if the misappropriated funds had not been used. The court ordered the defendant to pay the plaintiff the sum calculated by this method, together with interest.

Orders