Mango Boulevard Pty Ltd v Mio Art Pty Ltd

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SUPREME COURT OF QUEENSLAND

CITATION:

Mango Boulevard Pty Ltd & Anor v Mio Art Pty Ltd & Ors [2016] QCA 148

PARTIES:

MANGO BOULEVARD PTY LTD
ACN 101 544 601
(first appellant)
BMD HOLDINGS PTY LTD
ACN 010 093 348
(second appellant)
v
MIO ART PTY LTD ACN 121 010 875 as trustee of the SPENCER FAMILY TRUST

(first respondent)
SILVANA PEROVICH
(second respondent)
ROBERT WILLIAM WHITTON as trustee of the Estate of SILVANA PEROVICH (a bankrupt)
(third respondent)

FILE NO/S:

Appeal No 6097 of 2015
SC No 1714 of 2011

DIVISION:

Court of Appeal

PROCEEDING:

General Civil Appeal

ORIGINATING COURT:

Supreme Court at Brisbane – [2015] QSC 116

DELIVERED ON:

7 June 2016

DELIVERED AT:

Brisbane

HEARING DATE:

15 October 2015

JUDGES:

Fraser and Gotterson JJA and Dalton J
Separate reasons for judgment of each member of the Court, each concurring as to the orders made

ORDERS:

Dismiss the appeal with costs.

CATCHWORDS:

PERSONAL PROPERTY – TRANSFER – CHOSE IN ACTION – APPLICATION OF STATUTORY REGIME TO ASSIGNMENTS – ELEMENTS OF STATUTORY REGIME – ABSOLUTE ASSIGNMENT – where the appellants contended that Mio Art, the first respondent, had made a statutory assignment of its right to sue for payment under an agreement to Standard Builders Pty Ltd – where the appellants alleged the assignment took effect in accordance with s 199 of the Property Law Act 1974 (Qld) – where the trial judge found that there was no ‘absolute assignment not purporting to be by way of charge only’ – where the appellants argued that the effect of the first respondents agreement with Standard Builders Pty Ltd was an absolute, unconditional assignment of the debt – where the relevant agreement used the words ‘assign’ and absolutely – where, pursuant to the relevant agreement, unless and until the first respondent defaulted all moneys in respect of the secured assets were to be received by it – whether there was an absolute assignment of the debt

PERSONAL PROPERTY – TRANSFER – CHOSE IN ACTION – APPLICATION OF STATUTORY REGIME TO ASSIGNMENTS – ELEMENTS OF STATUTORY REGIME – NOTICE AND WRITING – where the appellants contended that Mio Art, the first respondent, had made a statutory assignment of its right to sue for payment under an agreement to Standard Builders Pty Ltd – where the appellants alleged the assignment took effect under s 199 of the Property Law Act – where a judge of the trial division held that if there was such an assignment it was not effective because of the absence of the required ‘express notice in writing’ – where the appellant argued that notice was given via its receipt of a copy of a letter to Standard Builders from its solicitor referring to a (separate) dispute between Standard Builders and the appellants – where the appellants alleged that notice was also given by the first respondent’s disclosure of the relevant agreement in separate litigation involving the parties – where the appellants argued that notice was also given by a…

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Details
Case
[2016] QCA 148
Decision Date

CaseChat Overview and Summary

Mango Boulevard Pty Ltd sought to establish that Mio Art Pty Ltd had made a statutory assignment of its right to sue for payment under an agreement to Standard Builders Pty Ltd. The primary contention was that the assignment took effect in accordance with section 199 of the Property Law Act 1974 (Qld). The central issues for the court were whether the security agreement between Mio Art and Standard Builders constituted an absolute assignment of the debt and, if so, whether the requisite statutory notice was provided in writing to the debtor. The appellants argued that the terms of the agreement, which used the words "assign" and "absolutely," indicated an absolute, unconditional assignment. They further contended that the statutory notice requirement was met through various documents, including a letter from the appellants' solicitor to Standard Builders and disclosures in separate litigation.

The court examined the language of the security agreement and found that it did not constitute an absolute assignment, as the agreement provided that moneys in respect of the secured assets were to be received by Mio Art until a default occurred. This was inconsistent with the characteristics of an absolute assignment. Additionally, the court assessed the sufficiency of the notice provided to the debtor. It held that the statutory notice requirement under section 199 of the Property Law Act 1974 (Qld) necessitates "express notice in writing" that conveys an intention to notify the debtor of the assignment and draws their attention to the fact of the assignment. The court concluded that the documents provided by the appellants did not meet this standard, as they did not expressly or by implication draw the debtor's attention specifically to the fact of the assignment.

The court dismissed the appeal, holding that there was no absolute assignment and that the statutory notice requirement was not satisfied. The final orders of the court were to dismiss the appeal with costs.

Orders

Orders of the court

Dismiss the appeal with costs.

Background

Background to the litigation

In the following provisions of the security agreement “Chargor” refers to Mio Art and “Chargee” refers to Standard Builders:[1][1]The first page of the security agreement wrongly describes Standard Builders as “Chargor” and Mio Art as “Chargee”. Nothing turns upon that mistake.“BackgroundA.The Chargor has agreed to mortgage and charge to the Chargee all the Secured Assets to secure financial accommodation now or in the future to be provided to or at the request of the Chargor.…2.1Mortgage of Secured AssetsThe Chargor transfers, mortgages and assigns by way of security to the Chargee the Secured Assets to be held by the Chargee absolutely, but subject to the provisions for redemption contained in clause 2.22.2RedemptionIf the Chargor pays or causes to be paid to the Chargee the Secured Money and if the Chargor otherwise performs and observes the covenants, conditions and agreements on its part contained in this document and the Transaction Documents then the Chargee shall at the request and cost of the Chargor execute a release of the Secured Assets from this document and where applicable re-deliver to the Chargor any share or unit certificates and the transfers thereof delivered pursuant to this document or if the Secured Assets have been transferred and registered in the name of the Chargee, the Chargee shall execute and deliver a re-transfer to the Chargor as the Chargor shall direct.2.3Deposit of CertificatesThe Chargor shall deposit with the Chargee any share of unit certificates relating to the Secured Assets and the Chargee shall be entitled to retain possession of those certificates until all Secured Money has been paid or repaid.2.4Dividend/Voting RightsUntil the occurrence of an Event of Default all dividends, distribution and other moneys in respect of the Secured Assets shall be received by the Chargor and the Chargee shall not exercise any voting power in respect of the Secured Assets at any meeting but upon the occurrence of an Event of Default the provisions of this clause shall cease to have further effect and, at the option of the Chargee, all dividends and other moneys payable in respect of the Secured Assets will be receivable by the Chargee and all voting rights associated with the Secured Assets shall be enjoyed and be exercisable by the Chargee alone without any without interference by the Chargor.2.5ChargeUntil such time as the assignment referred to in clause 2.1 is perfected the Chargor hereby charges the Secured Assets to the Chargee for payment of the Secured Money. The Chargor does this as beneficial owner except for those Secured Assets which the Chargor owns as trustee of a trust, in which case the Chargor does this as sole trustee of the relevant trust. …3.During the continuance of this security (and where appropriate from time to time) the Chargor must comply with the following provisions. In Agnew v Commissioner of Inland Revenue,[2] the Privy Council explained that, A similar process was described in a different context by the High Court in CPT Custodian Pty Ltd v Commissioner of State Revenue (Vic)[3] and also should be adopted here.[3](2005) 224 CLR 98.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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