Smits v Shirlaw - [2011] NSWCA 133

Court of Appeal

New South Wales

Case Title: Smits v Shirlaw

Medium Neutral Citation: [2011] NSWCA 133

Hearing Date(s): On the papers

Decision Date: 30 May 2011

Jurisdiction:

Before:
Hodgson JA at 1; Macfarlan JA at 22

Decision:
Application for leave to appeal dismissed with costs.
[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Catchwords:
EQUITY - Equitable set-off - Claim by assignee of debt - Whether debtor's claims against assignor should be set-off against debt due to assignee - Relevance of sufficiency of evidence to exercise of discretion.

Legislation Cited:
Conveyancing Act 1919 s 12

Cases Cited:

Texts Cited:

Category: Principal judgment

Parties:
Leonardus Gerardus SMITS (applicant)
Andrew Charles SHIRLAW (respondent)

Representation

- Counsel:
A Greinke (applicant)
D Barnett (respondent)

- Solicitors:
Self-represented (applicant)
Foulsham & Geddes (respondent)

File number(s): 2010/391711

Decision Under Appeal

- Court / Tribunal:

- Before: Sorby DCJ

- Date of Decision: 25 October 2010

- Citation: Andrew Charles Shirlaw v Leonardus Gerardus Smits (District Court of NSW, 25 October 2010, unreported)

- Court File Number(s) 2009/334992

Publication Restriction:

Judgment

HODGSON JA: On 25 October 2010, Sorby DCJ determined proceedings in which the respondent Andrew Shirlaw sued the applicant Mr Smits for a debt of $87,000 plus interest. The primary judge gave judgment for Andrew Shirlaw in the sum of $87,000, gave leave for him "to apply on interest in the judgment sum" [sic], and ordered Mr Smits to pay Andrew Shirlaw's costs.

Mr Smits has applied for leave to appeal from that decision. By the consent of the parties, the application is being dealt with in the absence of the public and without the attendance of the parties.

Proceedings below

The Court has not been provided with the transcript of the hearing below or with all of the exhibits.

The basic facts of the case, as alleged by Mr Smits, are set out as follows in his witness statement dated 2 July 2010:

1 I am the defendant.

2 On 11 November 2005 a written declaration of trust was executed by Kevin Richard Shirlaw (" Shirlaw ") personally and as receiver and manager of Ostabridge Pty Ltd under which Shirlaw would acquire and hold first and second mortgages with dealing numbers 702987988 and 704246070 (" the Mortgages ") over Lot 202 on SP 161001 at Yeppoon in Queensland in favour of Shirlaw, Pioneer Investments (Aust) Pty Ltd (" Pioneer ") and myself as beneficiaries (" the Trust ").

3 By transfer dated 14 November 2005 with dealing number 709132801 Shirlaw became the registered owner of the Mortgages as trustee of the Trust, as assignee from Citimark (The Galleries) Pty Ltd.

4 In late 2005…

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.

Continue reading Smits v Shirlaw

Details

AGLC: Smits v Shirlaw [2011] NSWCA 133
Case: [2011] NSWCA 133
Decision Date: 30 May 2011

CaseChat Overview and Summary

Smits (the debtor) sought to appeal a decision of the primary judge concerning an equitable set-off. The dispute arose from a debt owed by Smits to Shirlaw, who was the assignee of that debt from a third party, Mr. G. Smits contended that he had claims against Mr. G that should be set off against the debt due to Shirlaw. The primary judge had found that the evidence presented by Smits was insufficient to establish a right to equitable set-off.

The central legal issue before the Court of Appeal was whether the primary judge erred in finding that Smits had not adduced sufficient evidence to warrant the exercise of equitable set-off. This involved considering the principles governing equitable set-off, particularly in circumstances where a debt has been assigned, and the relevance of the quality and sufficiency of the evidence presented by the party seeking to rely on the set-off.

Hodgson and Macfarlan JJA held that the primary judge had correctly assessed the evidence. Their Honours noted that for equitable set-off to be available, there must be a sufficient connection between the claim sought to be set off and the debt due to the assignee. In this instance, the claims Smits sought to set off against the assigned debt were found to be too tenuous and lacking in the necessary evidentiary support to justify overriding the assignee's right to receive the full benefit of the assigned debt. The court affirmed that the discretion to allow equitable set-off requires a proper evidentiary foundation.

Consequently, the application for leave to appeal was dismissed, and Smits was ordered to pay Shirlaw's costs.

Orders

Orders of the court

Application for leave to appeal dismissed with costs.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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Case Title:	Smits v Shirlaw
Medium Neutral Citation:	[2011] NSWCA 133
Hearing Date(s):	On the papers
Decision Date:	30 May 2011
Jurisdiction:
Before:	Hodgson JA at 1; Macfarlan JA at 22
Decision:	Application for leave to appeal dismissed with costs. [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
Catchwords:	EQUITY - Equitable set-off - Claim by assignee of debt - Whether debtor's claims against assignor should be set-off against debt due to assignee - Relevance of sufficiency of evidence to exercise of discretion.
Legislation Cited:	Conveyancing Act 1919 s 12
Cases Cited:
Texts Cited:
Category:	Principal judgment
Parties:	Leonardus Gerardus SMITS (applicant) Andrew Charles SHIRLAW (respondent)
Representation
- Counsel:	A Greinke (applicant) D Barnett (respondent)
- Solicitors:	Self-represented (applicant) Foulsham & Geddes (respondent)
File number(s):	2010/391711
Decision Under Appeal
- Court / Tribunal:
- Before:	Sorby DCJ
- Date of Decision:	25 October 2010
- Citation:	Andrew Charles Shirlaw v Leonardus Gerardus Smits (District Court of NSW, 25 October 2010, unreported)
- Court File Number(s)	2009/334992
Publication Restriction: