Technology Enterprises v Dharamdas

[1999] NSWSC 153

CITATION:	Technology Enterprises v Dharamdas [1999] NSWSC 153 revised - 31/08/99
CURRENT JURISDICTION:	Common Law Division
FILE NUMBER(S):	10274/98
HEARING DATE(S):	17 December 1998; 5 February 1999
JUDGMENT DATE:	5 March 1999
PARTIES :	Technology Enterprises Pty Limited (Plaintiff) v Martin Gabriel Dharamdas Philomena Dharamdas (Defendants)
JUDGMENT OF:	Master Malpass

COUNSEL :	P - Mr Bellamy D - Mr O'Loughlin
SOLICITORS:	P - Kirkby & Associates - Lawyers Ds - Colin Daley Quinn
CATCHWORDS:	Summary judgment; possession
ACTS CITED:	Contracts Review Act 1980 Trade Practices Act 1974
CASES CITED:	Citicorp Aust Ltd v O'Brien (1996) 40 NSWLR 398 West v AGC (Advances) Ltd (1986) 5 NSWLR 610 Nguyen v Taylor (1992) 27 NSWLR 48 Beneficial Finance Corp v Karavas (1991) 23 NSWLR 256
DECISION:	See paragraphs 17, 20 & 21

- 5 -

THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

MASTER MALPASS

5 March 1999

10274/98 - Technology Enterprises Pty Limited v Dharamdas & Anor

JUDGMENT
1 The defendants are the registered proprietors of two properties. One is their home and known as 25 Warratta Place, Oatlands (the Oatlands property). The other is known as 36 Paul Street, Auburn (the Auburn property). Both properties have been mortgaged to the plaintiff. There are two Mortgages (each of which confers security over both of the properties).
2 Each Mortgage is dated 12 November 1996. Both were in fact executed by the defendants on 6 November 1996. One of the two Mortgages secured the repayment of a principal sum of an advance in the order of $311,000 together with interest (the Oatlands Mortgage). The moneys advanced on this security were applied to discharge existing Mortgages on the Oatlands property. The other Mortgage secured repayment of two facilities (including a business loan of $500,000) together with interest (the Business Mortgage). The moneys advanced on this security were applied to enable the purchase of certain equipment and software from Laservision (Aust) Pty Ltd (LVA). The advances were both made on 12 November 1996.
3 In early 1996, the first defendant and Mahesh Babu began taking steps to set up business activities in India (it was contemplated that a company would be formed in India to licence the LVA technology). The establishment of the business involved the acquiring of equipment and software from LVA. On 17 May 1996, a Memorandum of Understanding was executed. It was replaced by the Memorandum of Understanding (MOU) entered into on 11 October 1996. Initially, it was intended to arrange finance in India. Attempts to arrange finance in India proved to be unsuccessful. Negotiations were then commenced with Mr McCloskey (a director of the plaintiff and of LVA) for the purpose of obtaining financial assistance. These negotiations resulted in the making of loan agreements (which contain an expression of interdependence) and the granting of the two Mortgages. Independent legal advice was had, inter alia, in relation to these transactions (Certificates were given on 6 November 1996). There was a sale and delivery of the equipment and software to Laser Vision India Ltd (LVI) in India.
4 On 14 May 1996, the defendants had incorporated a company, Global Laser Technologies Pty Ltd (GLT). It had been intended that GLT would be the purchaser of the equipment and software. It had always been intended that the business in India would be conducted by an Indian subsidiary. On 1 July 1996, the company, LVI, was incorporated in Bangalore, India. Between 6 November and 12 November 1996 (which was the date of completion for the Mortgages), some change in the arrangements took place which saw, inter alia, LVI becoming the purchaser of the equipment and software. These arrangements were made on or about 8 November 1996. The arrangements involved the execution of a letter by the defendants on behalf of GLT (“PM15” being part of Exhibit A). The arrangements had the effect of varying the MOU. The defendants place some stress on the circumstances relevant to the making of these arrangements. It is contended that Babu played a significant role in negotiations.
5 There were problems in India. The firstnamed defendant found himself excluded from LVI. There was default in respect of Mortgage payments. Although certain interest payments have been made under the Oatlands Mortgage, the principal has become repayable and remains unpaid. An instalment of $250,000 has been made in respect of the Business Mortgage. The defendants make no offer, by way of condition, for the granting of relief.
6 The relevant circumstances pertaining to each of the defendants may be found in the affidavit material. They stand in somewhat different positions.
7 The plaintiff commenced these proceedings to obtain possession of the two properties. Its case is as pleaded in the Amended Statement of Claim. The defendants rely on an Amended Defence & Cross Claim.
8 The plaintiff now seeks summary judgment in respect of the two claims for possession. The hearing has seen the reading of many affidavits and the tender of a considerable bulk of documentary material. The plaintiff had relied on a number of affidavits. Each of Mr McCloskey, Mr Kirkby (the solicitor for the plaintiff) and Mr Babu have sworn an affidavit. There are also two affidavits sworn by Mr Ramshaw (these are affidavits of service). Each defendant has sworn an affidavit. Each defendant has been cross-examined.
9 I have referred to some of the material revealed by this evidence. This reference is not intended to be an exhaustive statement of the relevant material.
10 The hearing commenced on 17 December 1998. The taking of the evidence occupied much of that day. A brief outline of submissions was made orally and the further hearing adjourned to allow the parties to make written submissions. The outline was supplemented by detailed written submissions (pursuant to directions, the second set of which were made on 5 February 1999). For present purposes, it is not necessary to repeat that detail in this judgment. The making of these submissions was not completed until 25 February 1999. The time that has elapsed since the taking of the evidence has made the task of the Court more difficult.
11 The questions in issue are whether or not the defendants have an arguable claim for relief under either the Contracts Review Act, 1980 or the Trade Practices Act, 1974 in respect of, inter alia, the loan agreements and Mortgages. The claim for relief under the Trade Practices Act, 1974 is founded on alleged representations made by Babu as agent for LVA.
12 There is common ground on the matter of the approach to be taken to the application for relief. This covers both the areas of the availability of summary relief and the relevant statutory provisions.
13 The Court has a discretion to grant summary relief. The discretion is exercised having regard to the relevant circumstances of the particular case before the Court and so that justice is best served between the parties. There is abundant authority to the effect that relief should only be granted in what may be described as clear cases. The party seeking summary relief bears the onus of satisfying the Court that the remedy should be granted.
14 Counsel have referred to various statutory provisions and decided cases (including Citicorp Australia Ltd v O’Brien (1996) 40 NSWLR 398, West v AGC (Advances) Ltd & Ors (1986) 5 NSWLR 610, Nguyen & Anor v Taylor (1992) 27 NSWLR 48 and Beneficial Finance Corporation Ltd v Karavas & Ors (1991) 23 NSWLR 256). The relevant principles are well established and need no further mention.
15 On behalf of the defendants, it is said that the two loans should not be treated differently. I do not accept that submission.
16 I shall first turn to the Oatlands Mortgage (together with the relevant loan agreement). The defendants continue to reside in the Oatlands property. They continue to make payments of instalments of interest on the loan. The proceeds of the loan were used to discharge existing securities on this property. Although the defendants have had the benefit of these moneys, no offer of repayment or otherwise is made by the defendants.
17 After considering all of the relevant material, I am satisfied that the defendants have no arguable claim for relief in relation to this Mortgage and that the plaintiff is entitled to summary judgment in respect of the claim for possession of the secured land.
18 Submissions have been made on behalf of the defendants to the effect that there should be an appropriation of moneys to the Oatlands Mortgage (a sum of $250,000 was paid by LVI to the plaintiff on 17 September 1997 and was appropriated to the Auburn security). I do not accept these submissions.
19 I now turn to the Business Mortgage (together with the relevant loan agreement). The Court has been informed that the Auburn property is occupied by a relative of the defendants. The proceeds of the loan were used, inter alia, in the purchase of the equipment and the software supplied by LVA. The equipment and software was sent to LVI in India. Apparently, the business failed and the exercise was a financial disaster for the defendants. It seems that Babu has repaid a part of the advance.
20 There is complexity in the factual context. There are matters of fact in dispute (inter alia, the role played by Babu). The credibility of the defendants may be of importance. After considering all of the relevant material, I remain in doubt as to the entitlement to summary relief in respect of this claim. It seems to me that, whilst the defendants’ claim for relief may have its weaknesses and ultimately fail at trial, justice is best served if it be determined in the context of a full hearing.
21 Before proceeding to judgment, I will hear the parties further on questions of relief. It may be that Short Minutes will be appropriate. The defendants are to pay the costs of that part of the plaintiff’s claim founded on the Oatlands Mortgage. The costs of the application in respect of the other part of the claim are reserved. The exhibits may be returned.

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Last Modified: 06/30/2000