Javelin Asset Management v Byrne - [2015] VSC 491

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT

S ECI 2015 000085

JAVELIN ASSET MANAGEMENT PTY LTD (ACN 136 367 194)	Plaintiff
v
GERARD LAURENCE BYRNE	Defendant

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JUDGE:	JUDD J
WHERE HELD:	Melbourne
DATE OF HEARING:	5 August 2015
DATE OF JUDGMENT:	17 September 2015
CASE MAY BE CITED AS:	Javelin Asset Management v Byrne
MEDIUM NEUTRAL CITATION:	[2015] VSC 491

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CORPORATIONS – Managed Investment Scheme – Group proceeding under Part 4A of the Supreme Court Act 1986 – Court approved compromise – Group member borrowers obliged to repay scheme loans – Recovery proceeding against defaulting borrower – Plaintiff a party to Deed of Settlement but not all relevant group proceedings – Entitlement of non-party to a group proceeding to enter judgment under Deed of Settlement of group proceedings.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr M Costello	HWL Ebsworth Lawyers
For the Defendant	Mr M Stirling	Hunts Lawyers

HIS HONOUR:

By an Originating Motion filed on 26 March 2015 the plaintiff, Javelin Asset Management Pty Ltd, applied for judgment against the defendant, Gerard Laurence Byrne, under a Deed of Settlement and Release executed between the parties to the Great Southern Group proceeding on 23 July 2014. The settlement, recorded in the Deed, was approved by the court on 11 December 2014.[1]
[1][2014] VSC 584.

The defendant had entered into three loan agreements with Great Southern Finance Pty Ltd to fund his investment in managed investment schemes. The schemes were the 2007 and 2008 High Value Timber Project; the 2007 and 2008 Diversified Olives Income Project; and the 2006 and 2007 Wine Grape Income Project. The loans were for $126,333.33 (timber project); $551,795.83 (olive project) and $393,983.34 (wine grape project) respectively.

By a Sale of Debt Agreement, dated 31 March 2009, the loans were assigned to the plaintiff.

Enforceability of grower loan agreements was challenged by the plaintiffs in the Group proceeding, which involved 16 separate proceedings, commenced under Part 4A of the Supreme Court Act 1986. Each scheme in which the defendant invested was the subject matter of a proceeding, although the plaintiff was a defendant in only four proceedings. They were:

(a) S CI 02882/2010 (2005 and 2006 Plantations Project);

(b) S CI 03993/2011 (2008 Almond project);

(c) S CI 04135/2011 (the defendant’s olive project); and

(d) S CI 04207/2011 (the defendant’s timber project).

The plaintiff was not joined as a defendant in the S CI 04916/2011 proceeding, which related to the wine grape project.

The defendant, as an investor in the timber project, the olive project and the wine grape project, was a Group Member in each proceeding within the meaning of Part 4A of the Act. He did not opt out under s 33J of the Act. While Javelin had not been joined as a defendant to the wine grape proceeding, the enforceability of the wine grape scheme grower loans were challenged in that proceeding. All proceedings were heard together, and Javelin participated in the trial.

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: [2015] VSC 491
Decision Date: 17 September 2015

CaseChat Overview and Summary

The case of Javelin Asset Management v Byrne involved Javelin Asset Management as the plaintiff and Byrne as the defendant. The dispute centred around the repayment of loans made under a managed investment scheme, where Javelin Asset Management was the lender. The loans were part of a larger group proceeding that had been approved by the court under Part 4A of the Supreme Court Act 1986. The court was required to determine whether a non-party to all the relevant group proceedings could nevertheless enter a judgment under a Deed of Settlement that had been approved by the court.

The primary legal issue before the court was whether Byrne, who was a party to a Deed of Settlement but not to all the relevant group proceedings, was entitled to enter judgment under that Deed. The court had to assess whether such an entry of judgment was permissible despite the non-participation of Byrne in all the group proceedings. This raised questions about the enforceability of the Deed of Settlement in relation to parties who had not been parties to all the group proceedings.

The court reasoned that for the Deed of Settlement to be enforceable against all parties, including those who had not participated in all the group proceedings, there needed to be clear and unambiguous terms within the Deed that provided for such enforceability. The court found that the Deed of Settlement did not contain such clear terms, and thus Byrne, who was not a party to all the relevant group proceedings, was not entitled to enter judgment under the Deed. The court's decision hinged on the interpretation of the Deed of Settlement and its applicability to non-parties of all the group proceedings. The court held that the Deed did not provide sufficient basis to allow Byrne to enter judgment.

Orders