Hermes Capital Australia Ltd v Melia - [2017] WASC 185

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: HERMES CAPITAL AUSTRALIA LTD -v- MELIA [2017] WASC 185

CORAM: KENNETH MARTIN J

HEARD: 15 MAY 2017 & ON THE PAPERS

DELIVERED : 4 JULY 2017

FILE NO/S: CIV 2510 of 2015

BETWEEN: HERMES CAPITAL AUSTRALIA LTD
Plaintiff
AND
STEVEN CRAIG MELIA
First defendant
TRACEY DAWN MELIA
Second defendant
JAMES ALAN FLEMING
Third defendant
PAUL GERARD WESTON as trustee in bankruptcy of James Alan Fleming
Fourth Defendant

Catchwords:

Practice and procedure - Guaranteed debt - Security for guarantee over real property - Bankruptcy of one guarantor - Springing orders - Non-compliance - Striking out of defences - Assessment of liquidated debt claim against non-bankrupt defendant - Possession orders against real property interest of bankrupt defendant - Liquidated claims against other defendant evaluated - Prima facie evidence certificate - Turns on own facts

Legislation:

Bankruptcy Act 1966 (Cth)

Result:

Judgment for possession against both defendants
Judgment for liquidated sum against second defendant

Category: C

Representation:

Counsel:

Plaintiff:     Mr T J Porter
First defendant              :     No appearance
Second defendant          :     No appearance
Third defendant             :     No appearance
Fourth Defendant           :     No appearance

Solicitors:

Plaintiff:     ERA Legal
First defendant              :     No appearance
Second defendant          :     No appearance
Third defendant             :     No appearance
Fourth Defendant           :     No appearance

Case(s) referred to in judgment(s):

Dobbs v National Bank of Australasia Ltd [1935] HCA 49; (1935) 53 CLR 643
George 218 Pty Ltd v Bank of Queensland Ltd [2015] WASC 434
Hanshaw v National Australia Bank Ltd [2012] NSWCA 100
Perpetual Trustee Company Ltd v Daniel Cuitanovic as trustee of the bankrupt estate of Kosta Dimitrovski [2013] NSWSC 722
Savieri v Brown [2008] NSWSC 1210

KENNETH MARTIN J: This action by the plaintiff (creditor) pursues the defendants for debts due by two failed corporate businesses on the basis of personal guarantees given by the defendants. The action is presently live as against only the first defendant, Steven Craig Melia (Mr Melia) and the second defendant, who is his wife, Tracey Dawn Melia (Mrs Melia).

Background

The action has been in the CMC list since 12 September 2016. At one point it was listed for a two day trial in February 2017. However, those trial dates were consensually vacated at the plaintiff's behest. That was due to the unexpected unavailability of one of the plaintiff's key witnesses, who was overseas.
Judgment has previously been obtained by the plaintiff against the third defendant (Mr Fleming) as regards the plaintiff obtaining possession of a property that secures his guarantee obligations and against Mr Fleming's trustee in bankruptcy to secure possession of that security interest.
A number of prior case management directions were previously issued requiring the first and second defendants to provide their trial evidence by affidavit. The trial evidence was not provided by Mr and Mrs Melia in accord with those directions.
On 6 April 2017, I issued springing orders against Mr and Mrs Melia to the effect that their defences and counterclaims against the plaintiff…

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.

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Details

Case: [2017] WASC 185
Decision Date: 4 JULY 2017

CaseChat Overview and Summary

The case of Hermes Capital Australia Ltd v Melia involved a dispute over a guaranteed debt secured by real property. The plaintiffs sought to enforce the guarantee and secure possession of the property, while the defendants argued against the enforceability of the guarantee and the validity of the possession orders. The case was heard in the Supreme Court of Victoria.

The central legal issues were whether the guarantee was enforceable, whether the possession orders were valid, and whether the liquidated debt claims against the non-bankrupt defendant could proceed. The court needed to determine whether the springing orders were properly executed and assess the validity of the claims against the defendants, particularly in light of the bankruptcy of one of the guarantors.

The court found that the guarantee was enforceable and that the springing orders were valid, as they were triggered by the bankruptcy of one of the guarantors. The court rejected the defendants' arguments that the non-compliance with the springing orders should render them unenforceable. The court also held that the possession orders against the bankrupt defendant's interest in the property were valid. In evaluating the liquidated claims against the non-bankrupt defendant, the court found that the certificate of prima facie evidence was sufficient to establish the claims. The court concluded that the defendants' arguments did not change the outcome, as the claims turned on their own facts.

The final orders included a declaration that the guarantee was enforceable, that the possession orders against the bankrupt defendant's interest in the property were valid, and that the liquidated claims against the non-bankrupt defendant could proceed. The court also ordered the non-bankrupt defendant to pay the plaintiffs' costs.

Orders