SF Cosentino Pty Ltd v Glendining

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S APCI 2019 0004

SF COSENTINO PTY LTD	Applicant
v
JOHN GLENDINING and KIM RUSSELL	Respondents

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JUDGES:	TATE, KYROU and McLEISH JJA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	17 March 2020
DATE OF JUDGMENT:	9 June 2020
MEDIUM NEUTRAL CITATION:	[2020] VSCA 149
JUDGMENT APPEALED FROM:	[2018] VCC 1775 (Judge Macnamara)

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GUARANTEE AND INDEMNITY – Crop sale agreement and sub-lease – Breach and termination – Claim against guarantors for unpaid sums – Defence of misleading or deceptive conduct – Whether conduct of sole director of head tenant and vendor attributable to company – Reliance – Whether any loss caused – Whether judge impartial in dealing with self-represented litigants – Australian Consumer Law s 18 – Leave to appeal granted in respect of finding of reliance – Appeal allowed.

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APPEARANCES:	Counsel	Solicitors
For the Applicant	Mr P G Cawthorn QC with Mr H Kirimof	SMR Legal Pty Ltd
For the Respondents	Dr M Wolff	Aqua Law

TATE JA
KYROU JA
McLEISH JA:

TABLE OF CONTENTS

Introduction and summary..........................................................................	2
The history of the sub-lease and crop sale agreement ............................	3
Proposed sale....................................................................................................	3
Engagement of Rob Hosking............................................................................	4
Negotiations for sale with the Yorta Yorta people...........................................	5
The Hosking financials.....................................................................................	7
The kitchen meeting – 7 April 2015................................................................	13
The meeting with Schreiner – 22 April 2015..................................................	16
Russell expresses interest in the Yalca farm operations...................................	17
Valuation of crop – March to May 2016.........................................................	18
Execution of the contracts – personal guarantees and indemnities.................	19
The venture fails...............................................................................................	22
The County Court proceeding — SFC’s claim below...............................	24
The defences of Glendining and Russell....................................................	26
The judge’s reasons —misleading or deceptive conduct.........................	29
The grounds of appeal..................................................................................	33
Attribution:  was providing the Hosking financials conduct by SFC? — Ground 1..........................................................................................	34
Reliance: did Russell and Glendining rely on the Hosking financials? — Ground 2...............................................................................	39
Loss:  did any misleading or deceptive conduct cause loss?  — Ground 3.........................................................................................................	43
Was the judge impartial?  — Ground 4.....................................................	46
Conclusion......................................................................................................	47

Introduction and summary

1. Sam Cosentino (‘Cosentino’)[1] and his son Jim Cosentino (‘Jim’) were the registered proprietors of two farms in north eastern Victoria on which they grew vegetable crops for the wholesale market.  One farm is in Yalca and the other is in Somerville on the Mornington Peninsula.  Both farms were leased to the applicant, SF Cosentino Pty Ltd (‘SFC’), of which Cosentino was the sole director.  In 2014 Cosentino was looking to retire, and to that end, after some exploration of an outright sale of both farms which came to nothing, SFC entered into an arrangement on 31 May 2016 with PEAQ Farms Pty Ltd (‘PEAQ Farms’) to sub-lease the Yalca farm for 10 years with an option for a further 10 years (‘the sub-lease’).  On the same day SFC also agreed to sell to PEAQ Farms the crops already in…