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State Securities Pty Ltd v Dromi

State Securities Pty Ltd v Dromi

Case [2010] VSCA 264 7 October 2010

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SUPREME COURT OF VICTORIA

COURT OF APPEAL

STATE SECURITIES PTY LTD (ACN 079 829 495) and TOM KARAS	S APCI 2009 3803
	First Appellant Second Appellant
v
MARTHA DROMI	Respondent

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JUDGES	NETTLE, REDLICH and HARPER JJA
WHERE HELD	MELBOURNE
DATE OF HEARING	5 October 2010
DATE OF ORDERS	7 October 2010
DATE OF REASONS FOR JUDGMENT	13 October 2010
MEDIUM NEUTRAL CITATION	[2010] VSCA 264
JUDGMENT APPEALED FROM	State Securities Pty Ltd and Karas, Tom v Dromi, Martha [2009] VCC 0833 (Unreported, Judge Shelton, 26 June 2009)

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Brokering Agreement – Whether procuration fee due – Finding at trial that Brokering Agreement did not relate to pleaded loan transactions – Whether finding was reasonably open – Failure of trial judge to take into account surrounding circumstances in assessing reliability of broker’s claim that they did relate to loans – Error in acting upon view of party’s credibility by judicial officer in other litigation – Failure by trial judge to resolve all issues in case – Appeal allowed – Matter remitted to trial judge to determine outstanding issues.

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APPEARANCES:	COUNSEL	SOLICITORS
For the Appellants	Mr I W Upjohn	Lewenberg & Lewenberg
For the Respondent	Mr T J Sowden	Gary Prince

NETTLE JA

REDLICH JA
HARPER JA:

This is an appeal from the County Court against the dismissal of a claim by State Securities Pty Ltd, a mortgage broking company (first appellant) and Mr Tom Karas, (second appellant) its manager, for brokerage fees in the amount of $17,343.51 plus statutory interest allegedly incurred by Ms Martha Dromi (‘the respondent’).

The appellants claimed that the entitlement to fees arose pursuant to two brokering agreements, referred to as the ‘second agreement’ and the ‘third agreement’, which were executed by the respondent.[1] Each of the agreements included a written term to the effect that a ‘procuration fee’ of ‘$600 plus 2% of the loan amount plus GST’ was due and payable by the borrower (and hence interest would accrue) ‘upon signing this Appointment whether or not a Letter of Offer is received’, and payable within three working days of settlement (if not deducted at settlement). The second agreement was dated 26 May 2005. The third agreement was not dated, but it was the appellant’s contention that it was entered into on or about 1 June 2005.
[1]A claim pursuant to a ‘first agreement’ was settled prior to trial.

The appellants claimed that the second and third agreements related to two loans that the appellants brokered to refinance properties belonging to the respondent at 90-92 Guest Street and 94 Guest Street, Tootgarook. The respondent did not dispute the fact that the appellants had procured the two loans in question for her.

The two key issues identified by the trial judge for determination were (1) whether the respondent had signed the second and third agreements and (2) whether the second and third agreements related to the loan transactions upon which the appellants relied. His Honour concluded that the respondent had signed the agreements, but that…

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 State Securities Pty Ltd v Dromi

Details

AGLC: State Securities Pty Ltd v Dromi [2010] VSCA 264
Case: [2010] VSCA 264
Decision Date: 7 October 2010

CaseChat Overview and Summary

The dispute in State Securities Pty Ltd v Dromi involved a claim for a procuration fee under a Brokering Agreement. State Securities, the appellant, sought the fee from Dromi, the respondent, on the basis that it was owed for brokering certain loan transactions. The case was heard and determined in the Federal Court of Australia. The primary judge found that the Brokering Agreement did not pertain to the loan transactions in question and thus, no procuration fee was due.

The central legal issues before the court were whether the trial judge's finding that the Brokering Agreement did not relate to the pleaded loan transactions was reasonably open, and whether the trial judge erred in failing to take into account the surrounding circumstances in assessing the reliability of the broker’s claim that the agreement did relate to the loans. Additionally, the court had to determine if the trial judge erred in acting upon a view of the party’s credibility formed in other litigation and if there was a failure to resolve all issues in the case. The appeal centred on these points of error and the appropriate scope of judicial review.

The Full Court of the Federal Court held that the trial judge erred in not considering the surrounding circumstances when evaluating the broker's claim. The court found that this error was significant enough to warrant a reassessment of the broker’s credibility and the relationship of the Brokering Agreement to the loan transactions. Furthermore, the court determined that the trial judge improperly relied on credibility assessments made in a previous litigation, which was an error in the context of this case. The failure to resolve all issues in the case was also identified as a material error. Consequently, the appeal was allowed, and the matter was remitted to the trial judge to address the unresolved issues and make new findings.

The final orders of the court included the allowance of the appeal, the remittal of the matter to the trial judge, and instructions for the trial judge to reassess the broker’s credibility and the applicability of the Brokering Agreement to the loan transactions, while taking into account all relevant circumstances. The court did not impose any orders regarding costs, leaving that matter to be determined by the trial judge upon the resolution of the outstanding issues.

Orders