Twenty Ninth Macorp Nominees Pty Ltd v George - [2017] VSC 136

IN THE SUPREME COURT OF VICTORIA AT MELBOURNE

Not Restricted

COMMERCIAL COURT

COMMERCIAL LIST

S CI 2013 05420

TWENTY NINTH MACORP NOMINEES PTY LTD (ACN 054 037 991)	Plaintiff
v
NORMAN GEORGE	First defendant
PAULINE GEORGE	Second defendant

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JUDGE:	ALMOND J
WHERE HELD:	Melbourne
DATES OF HEARING:	23-25, 30 January 2017
DATE OF JUDGMENT:	27 March 2017
CASE MAY BE CITED AS:	Twenty Ninth Macorp Nominees Pty Ltd v George & Anor
MEDIUM NEUTRAL CITATION:	[2017] VSC 136	1^st Revision: 3 April 2017, para [168]

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CONTRACT – Payment of funds by plaintiff to third party – Character of the transaction – Investment by plaintiff directly or loan to first and second defendants supported by mortgage – Plaintiff’s evidence preferred – Principles in Masters v Cameron (1954) 91 CLR 353 – Binding oral agreement with intention to later reduce to writing – Functional test – Agreement and later payment formed part of single transaction.

AGENCY – Contract entered into by husband purportedly on wife’s behalf – Authority to enter into transaction – Ratification of any excess of authority – ‘Clear adoptive acts’ by wife.

EQUITY – Unconscionable conduct – Enforcement of transaction against wife – Principle in Yerkey v Jones (1939) 63 CLR 649, Garcia v National Australia Bank Ltd (1998) 194 CLR 395, considered – Failure by plaintiff to explain transaction – Whether wife had sufficient understanding of purport and effect of the transaction – Onus of proof – Previous business experience – Consideration of circumstances of execution of transaction documents – Wife unable to discharge onus – Not unconscionable to enforce transaction.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr R Heath	Meerkin & Apel
For the First defendant	Mr N Jones	Felton Farquhar & Co
For the Second defendant	Mr D Williams QC Mr G Parncutt	Kiatos & Co

HIS HONOUR:

Introduction

This case concerns the fate of a short-term investment opportunity to charter a vessel (the MS Caledonian Sky) for the purpose of providing accommodation and entertainment at Canary Wharf on the River Thames in London for the duration of the London Olympic Games in late-July to early-August 2012.

The plaintiff, Twenty Ninth Macorp Nominees Pty Ltd, claims:

(a) that it lent the first and second defendants[1] $1,050,000 to enable the defendants to participate in the boat venture;
[1]Alternatively the first defendant alone.

(b) that the loan was secured by a mortgage granted by the second defendant over the defendants’ matrimonial home at 9A Young Street, Brighton (which was at all relevant times registered solely in the second defendant’s name);

(c) that the defendants failed to repay the loan when it fell due for repayment or at any time since; and

(d) that the defendants are jointly and severally liable to repay to the plaintiff the loan (plus interest and costs under the loan agreement).

The first defendant, Mr Norman George, says in essence that he and his wife did not borrow any money from the plaintiff but that Mr George Saade…

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: [2017] VSC 136
Decision Date: 27 March 2017

CaseChat Overview and Summary

In the case of Twenty Ninth Macorp Nominees Pty Ltd v George, the plaintiff sought to recover funds paid to the defendants, which were intended to be used for an investment transaction. The dispute came before the court, which had to determine the nature of the payment, the existence of an agency relationship, and whether the transaction was unconscionable. The court had to decide if the payment was an investment directly or a loan secured by a mortgage, the authority of the husband to enter into the transaction on behalf of his wife, and whether it was unconscionable to enforce the transaction against the wife.

The primary legal issues were whether the plaintiff's payment to the defendants was an investment or a loan, if the husband had the authority to enter into the transaction on behalf of his wife, and if enforcing the transaction against the wife would be unconscionable. The court examined the evidence and applied principles from previous cases to determine the character of the transaction, the authority of the husband, and the enforceability of the transaction against the wife. The court assessed whether the wife had sufficient understanding of the transaction's purport and effect and if the plaintiff had discharged the onus of proving unconscionability.

The court found that the plaintiff's evidence was preferred, and the transaction was an investment directly or a loan secured by a mortgage. The court held that the husband had the authority to enter into the transaction on behalf of his wife, and the wife's clear adoptive acts ratified any excess of authority. The court determined that it was not unconscionable to enforce the transaction against the wife, as she was unable to discharge the onus of proving unconscionability. The court considered the wife's previous business experience and the circumstances of the execution of the transaction documents.

The court ordered that the defendants were liable to repay the funds to the plaintiff and that the transaction was enforceable against the wife. The court's decision was based on the functional test and the principles established in previous cases. The court found that the agreement and later payment formed part of a single transaction and that the plaintiff's failure to explain the transaction did not render it unconscionable.

Orders