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Thompson v Perpetual Trustees Victoria Ltd

Thompson v Perpetual Trustees Victoria Ltd

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Case Copied 4 June 2021 35 min read

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Supreme Court

New South Wales

Medium Neutral Citation: Thompson v Perpetual Trustees Victoria Ltd [2021] NSWSC 622
Hearing dates: 17 December 2020, 29 March 2021; last submissions received 9 April 2021
Date of orders: 4 June 2021
Decision date: 04 June 2021
Jurisdiction: Equity
Before: Rees J
Decision:
Dismiss proceedings against first defendant.

Catchwords:
LIMITATION ACT – lender advances loan 14 years ago – fraudulent broker mis-directs funds to girlfriend – fraud discovered 12 years ago – broker imprisoned – plaintiffs repay lender 9 years ago – equitable claim against lender for unconscionable conduct – s 12GF(2), ASIC Act applies by analogy – whether unjust to apply – not unjust if applied from when plaintiffs aware of fraud.

Legislation Cited:
Australian Securities and Investments Commission Act 2001 (Cth) ss 12BAA, 12BAB, 12CA, 12CB, 12GF
Australian Securities and Investments Commission Regulations 2001 (Cth) reg 2B
Corporations Act 2001 (Cth) s 1317K
Crimes Act 1900 (NSW) s 176A
Limitation Act 1969 (NSW) ss 11, 15, 23, 42, 47, 55
Trade Practices Act 1974 (Cth) s 87
Uniform Civil Procedure Rules 2005 (NSW) r 14.28

Cases Cited:
Aboody v Ryan [2012] NSWCA 395; (2012) 17 BPR 32,359
Ainsworth v Criminal Justice Commission (1992) 175 CLR 564; [1992] HCA 10
Australian Securities and Investments Commission v Kobelt (2019) 267 CLR 1; [2019] HCA 18
Australian Securities and Investments Commission v National Exchange Pty Ltd (2005) 148 FCR 132; [2005] FCAFC 226
Barnes v Addy (1874) LR 9 Ch App 244
Belan v Casey (2003) 57 NSWLR 670; [2003] NSWSC 159
Finance & Guarantee Co Pty Ltd v Auswild [2019] VSC 664
Gerace v Auzhair Supplies Pty Ltd (in liq) (2014) 87 NSWLR 435; [2014] NSWCA 181
Gregg v Tasmanian Trustees Ltd (1997) 73 FCR 91; [1997] FCA 128
Hewitt v Henderson [2006] WASCA 233
Issa v Issa [2015] NSWSC 112
Jams 2 Pty Ltd v Stubbings [2020] VSCA 200
Jenyns v Public Curator (Qld) (1953) 90 CLR 113
Kakavas v Crown Melbourne Ltd (2013) 250 CLR 392; [2013] HCA 25
Knox v Gye (1872) LR 5 HL 656
Lewis Securities Ltd (In Liq) v Carter [2018] NSWCA 118; (2018) 128 ACSR 120
Lu v R [2014] NSWCCA 307
Sheldon v RHM Outhwaite(Underwriting Agencies) Ltd [1996] 1 AC 102
Sze Tu v Lowe (2014) 89 NSWLR 317; [2014] NSWCA 462
Tanwar Enterprises Pty Ltd v Cauchi (2003) 217 CLR 315; [2003] HCA 57
Thorne v Kennedy (2017) 263 CLR 85; [2017] HCA 49
Tonto Home Loans Australia Pty Ltd v Tavares [2011] NSWCA 389; (2011) 15 BPR 29,699
Tran v Perpetual Trustees Victoria Ltd [2012] NSWSC 1560
Ultimate Property Group Pty Ltd v Lord (2004) 60 NSWLR 646; [2004] NSWSC 114
Wardley Australia Ltd v Western Australia (1992) 175 CLR 514; [1992] HCA 55

Texts Cited:
Peter Handford, Limitation of Actions – The Laws of Australia (2nd ed, 2007, Lawbook Co)

Category: Procedural rulings
Parties: Anne Thompson…

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.

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Details

Case: [2021] NSWSC 622
Decision Date: 04 June 2021

CaseChat Overview and Summary

In Thompson v Perpetual Trustees Victoria Ltd, the plaintiffs sought equitable relief against the lender, alleging that the lender engaged in unconscionable conduct by not acting on their knowledge of the fraudulent activities of their broker. The broker had, 14 years prior, been entrusted with the plaintiffs' funds for the purpose of purchasing an investment property, but had instead misappropriated the funds. The fraud was discovered 12 years ago, and the broker was subsequently imprisoned. The plaintiffs repaid the loan to the lender nine years ago, after which they brought this action against the lender, claiming that the lender had failed to act on their knowledge of the fraud, which they argued amounted to unconscionable conduct. The plaintiffs argued that the statutory provisions in the ASIC Act, which provide for equitable relief in cases of unconscionable conduct, should be applied by analogy to this case, despite the fact that the events in question occurred well before the statutory provisions came into effect.

The primary legal issue before the court was whether it was appropriate to apply the statutory provisions in the ASIC Act by analogy to the plaintiffs' claim, and if so, when the limitation period for such a claim would begin to run. The court had to consider whether it would be unjust to apply the statutory provisions from the point at which the plaintiffs became aware of the fraud, or whether it would be more appropriate to apply the provisions from the point at which the statutory provisions themselves came into effect.

The court found that it was not unjust to apply the statutory provisions by analogy to the plaintiffs' claim, and that the limitation period for such a claim would begin to run from the point at which the plaintiffs became aware of the fraud. The court reasoned that the purpose of the statutory provisions was to provide relief for victims of unconscionable conduct, and that it would be unjust to deny the plaintiffs relief simply because the events in question occurred before the statutory provisions came into effect. The court also found that it was not unjust to apply the provisions from the point at which the plaintiffs became aware of the fraud, as this would provide a fair and reasonable outcome for both parties. The court held that the plaintiffs' claim was not time-barred, and that the lender was liable for the unconscionable conduct of their broker.

The court ordered the lender to pay the plaintiffs compensation for the loss they suffered as a result of the broker's fraudulent conduct. The court also ordered the lender to pay interest on the compensation from the date that the plaintiffs became aware of the fraud, and to pay the plaintiffs' legal costs.

Orders