Jane v Bob Jane Corporation Pty Ltd - [2013] VSC 406

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

No. S CI 2012 04648

BETWEEN

ROBERT FREDERICK JANE	Plaintiff
and
BOB JANE CORPORATION PTY LTD (ACN 005 870 431)	Second Defendant
and
PORT 471 PTY LTD (ACN 117 228 061)	Third Defendant

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JUDGE:	SIFRIS J
WHERE HELD:	Melbourne
DATE OF HEARING:	6-10, 13-14, 23 May 2013
DATE OF JUDGMENT:	9 August 2013
CASE MAY BE CITED AS:	Jane v Bob Jane Corporation Pty Ltd & Anor
MEDIUM NEUTRAL CITATION:	[2013] VSC 406

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SETTLED ACCOUNT – Loan account of director in books of company – Whether mutual debits and credits – Loan account operated as bank account of director – Balance of loan account paid to director – Whether balance agreed – Principles applicable – Settled account for period ending 30 June 2008.

SETTLED ACCOUNT – Whether leave to re-open accounts or liberty to surcharge and falsify should be granted – Leave refused – Accounts not shown to be erroneous so as to justify such leave – No fraud and no specific error established.

ESTOPPEL – Settled account – Amount paid to plaintiff in settlement of loan account – Whether plaintiff estopped from re-opening loan account.

LIMITATION OF ACTIONS – Action for account – Whether contractual or equitable – Whether statute barred – Accrual of cause of action – Limitations of Action Act 1958 (Vic) s 3(1), s (2); Wheatley v Bower [2001] WASCA 239 applied; Tito v Waddell (No 2) [1977] 1 Ch 106 not followed.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr G R McCormick	Goldsmiths Lawyers
For the Defendant	Mr I G Waller SC and Mr J S Mereine	HWL Ebsworth Lawyers

TABLE OF CONTENTS

A. Introduction......................................................................................................................... 1
B. Relevant Factual Background........................................................................................... 2

(i)        Prior to the Family Court Proceedings.................................................................... 2
(ii)      Transfers from the loan account the subject of this proceeding.......................... 3
(iii)     Bob Jane’s health......................................................................................................... 3
(iv)     The Family Court Proceedings, December 2006 – September 2009.................... 4
(v)      After the Family Court Proceedings........................................................................ 5

C.     Summary of Issues and Conclusions............................................................................... 6
D.     Critical Findings.................................................................................................................. 7
E.      Question 1: Was the sum of $540,244.86 referred to in paragraph 8 of the Amended Statement of Claim a gift or a loan?................................................................................................................... 9
F.      Question 2: Has the sum of $2,402,723.23 referred to in paragraph 11 of the Amended Statement of Claim been repaid by Port 471 Pty Ltd?............................................................................. 13
G. Question 3: Does section 5(2) of the Limitations of Actions Act 1958 (Vic) apply to all actions of account so as to bar any matter which arose prior to 5 March 2006?.................................. 15
H.     Question 4: Are there settled accounts?....................................................................... 19

Question 5: Is the plaintiff estopped from reopening the loan account balance?.. 25
J. Question 6: If there are settled accounts and the limitation period has not expired, should the accounts be re-opened or the Plaintiff be given liberty to surcharge and falsify?............ 26
K. Disposition......................................................................................................................... 28

HIS HONOUR:

A. Introduction

Robert Frederick Jane (‘Bob Jane’) commenced this proceeding…

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: [2013] VSC 406
Decision Date: 9 August 2013

CaseChat Overview and Summary

In the case of Jane v Bob Jane Corporation Pty Ltd, the plaintiff, Jane, sought to challenge the settlement of a loan account held with the defendant, Bob Jane Corporation Pty Ltd, arguing that the settlement was unjust and that the company should be surcharged and allowed to falsify the accounts. The dispute was heard by the Supreme Court of Victoria, which had to determine the nature of the loan account and whether it was properly settled. The court was also tasked with deciding whether the plaintiff was estopped from re-opening the loan account and whether the action for an account was statute-barred.

The primary legal issues revolved around whether the loan account in question was a mutual debit and credit account, and whether it had been properly settled. The court had to consider the principles applicable to settled accounts, particularly for the period ending 30 June 2008. Additionally, the court examined whether leave should be granted to re-open the accounts or to surcharge and falsify them, and whether the plaintiff was estopped from challenging the settlement. Finally, the court addressed the issue of whether the action for an account was statute-barred under the Limitations of Actions Act 1958 (Vic).

The court found that the loan account operated more like a bank account of the director rather than a mutual debit and credit account. Despite this, the balance of the loan account was paid to the plaintiff, and there was no evidence that this balance had been agreed upon. The court held that the accounts were not erroneous enough to warrant leave to re-open them or to surcharge and falsify. The plaintiff was also found to be estopped from re-opening the loan account, as the amount paid in settlement was considered final. Regarding the limitation of actions, the court determined that the cause of action accrued at the time of the settlement and applied the principles set out in Wheatley v Bower [2001] WASCA 239, finding that the action was not statute-barred.

The court refused to grant leave to re-open the accounts or to surcharge and falsify them, and held that the plaintiff was estopped from challenging the settlement. The action for an account was found not to be statute-barred. As a result, the plaintiff's claims were dismissed, and the settlement of the loan account was upheld.

Orders