Labracon Pty Limited v Cuturich & Anor [2013] NSWSC 97
Hearing dates:
10, 11, 12 October 2012
Decision date:
26 February 2013
Jurisdiction:
Equity Division
Before:
Lindsay J
Decision:
Judgment for the Plaintiff. Direct that parties bring in short minutes of orders giving effect to these Reasons
Catchwords:
CONTRACTS - general contractual principles - illegal and void contracts - plaintiff was assignee of two loan agreements between assignor as lender and first defendant as borrower, charging land owned by first defendant - plaintiff was the assignee of a deed of charge between assignor as lender, first defendant as borrower, and second defendant as chargee - whether loan agreements and deed of charge were unenforceable as elements of a sham arrangement intending to defraud creditors of the defendants. ESTOPPEL - estoppel by deed - in general - plaintiff was the assignee of two loan agreements and a deed of charge acknowledging the receipt of loan moneys by the first defendant from the assignor - whether the defendants were bound by any estoppel from denying receipt of the moneys. ESTOPPEL - estoppel by deed - in general - whether estoppel by deed is a subset of estoppel by convention. DEEDS - what amounts to a deed - generally - defendants' execution of two instruments was not attested by a non-party witness - section 38(1) of the Conveyancing Act 1919 (NSW) does not require each and every signature to have been attested by a non-party witness - a party who knowingly takes the benefit of a deed may be bound by it even without execution of it. DEEDS - other matters - enforceability of receipt clause - plaintiff took assignment of lender's rights under the deeds without notice of any deficiency in amounts paid to borrower compared with amounts acknowledged as having been received - whether plaintiff was entitled to a judgment in debt in the sum of the amounts acknowledged as having been received
[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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Labracon Pty Ltd v Cuturich [2013] NSWSC 97
Case
[2013] NSWSC 97
Decision Date
CaseChat Overview and Summary
Labracon Pty Ltd, the assignee of two loan agreements and a deed of charge, brought proceedings against the Cuturich couple, the original borrowers, to enforce the agreements and charge. The defendants argued that the agreements and charge were part of a sham arrangement intended to defraud their creditors and that the plaintiff was not entitled to enforce them. The defendants also raised estoppel by deed and the validity of the deeds as legal issues. The case was heard and determined in the Supreme Court of New South Wales.
The court was required to decide whether the loan agreements and deed of charge were unenforceable as elements of a sham arrangement intending to defraud creditors. The court also had to determine if the defendants were bound by any estoppel from denying receipt of the moneys acknowledged in the deeds, and whether estoppel by deed was a subset of estoppel by convention. Furthermore, the court considered the enforceability of the receipt clause and the validity of the deeds, particularly whether the lack of attestation by a non-party witness affected their enforceability.
The court found that the loan agreements and deed of charge were not part of a sham arrangement, and the defendants were estopped from denying receipt of the moneys acknowledged in the deeds. The court also held that estoppel by deed was a subset of estoppel by convention. The lack of attestation by a non-party witness did not render the deeds unenforceable, and the plaintiff was entitled to a judgment in debt in the sum of the amounts acknowledged as having been received. The plaintiff was granted the relief it sought, and the defendants' defences were dismissed.
The court ordered that the defendants pay the plaintiff the amounts acknowledged as having been received under the deeds, together with interest and costs. The court's decision was based on the principle that the plaintiff, as an assignee, took the deeds without notice of any deficiency in the amounts paid to the borrower compared with the amounts acknowledged as having been received. Therefore, the plaintiff was entitled to enforce the receipt clause and recover the full amounts acknowledged.