Wexford Pty Limited v Doolub - [2008] NSWSC 1233

CITATION: Wexford Pty Limited v Doolub [2008] NSWSC 1233

HEARING DATE(S): 22 October 2008

JUDGMENT OF: McDougall J at 1

EX TEMPORE JUDGMENT DATE: 22 October 2008

DECISION: See paragraphs [69] to [72] of the judgment.

CATCHWORDS: CONTRACT - loan agreement - misleading representations - representations as to future conduct - s41(2) Fair Trading Act 1987 - reverse onus of proof - knowing involvement - loss - whether purpose trust existed.

LEGISLATION CITED: Civil Procedure Act 2005
Fair Trading Act 1987
Uniform Civil Procedure Rules

PARTIES: Wexford Pty Ltd (Plaintiff)
Praveen Meckraj Doolub (First Defendant)
Niteen Meckraj Doolub (Second Defendant)
Asset Loan Company Pty Limited (Third Defendant)
Tricom Nominees Pty Ltd (Fourth Defendant)
Domain Funding Pty Limited (Fifth Defendant)

FILE NUMBER(S): SC 50010/07

COUNSEL: CRC Newlinds SC / P A Horvath (Plaintiff)
A W Street SC / D F Villa (Defendants)

SOLICITORS: Jackson Lalic (Plaintiff)
Middletons (First and Second Defendants)
McCabe Terrill (Third and Fourth Defendants)
Fifth Defendant (In person)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
COMMERCIAL LIST

McDOUGALL J

22 October 2008 ex tempore (revised 19 November 2008)

50010/07 WEXFORD PTY LIMITED v PRAVEEN MECKRAJ DOOLUB

JUDGMENT

1 HIS HONOUR: The plaintiff (Wexford) and the first defendant entered into a written loan agreement on 8 December 2006. Wexford agreed to lend the first defendant $700,000. The term of the loan was stated variously as two months or sixty days. The interest rate was 14 per cent per month, reducible (if that is the correct term) to 10 per cent as an "acceptable rate". The first defendant has defaulted and is now bankrupt. The securities that he gave to Wexford are worthless.

2 Wexford says that the first defendant procured the loan by misleading or deceptive conduct and that his brother, the second defendant, was knowingly involved in that conduct; Wexford seeks to recover the amount of the loan together with interest (although at the more modest rates allowable pursuant to s 100 of the Civil Procedure Act 2005) from the second defendant. (From here on, and for the sake of convenience but without intending any disrespect, I shall refer to the first defendant as "Praveen" and the second defendant as "Niteen".)

The issues

3 The misleading or deceptive conduct alleged by Wexford consists of three representations said to have been made by Praveen through a broker, Corke Financial Pty Ltd (Corke). The representations alleged are:

(1) that Praveen required $700,000 for the purposes of completing the purchase of various parcels of real estate;
(2) that Praveen was to be the borrower and recipient of any funds advanced by Wexford; and
(3) that any amount advanced by Wexford would be used by Praveen for the purchase of real property.

The essential issues for decision are:

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 Wexford Pty Limited v Doolub

Details

AGLC: Wexford Pty Limited v Doolub [2008] NSWSC 1233
Case: [2008] NSWSC 1233
Decision Date: 22 October 2008

CaseChat Overview and Summary

The case of Wexford Pty Limited versus Doolub was heard in the Supreme Court of Queensland. The dispute centred around a loan agreement that had been made between the two parties, with Wexford alleging that Doolub had made misleading representations that constituted a breach of contract. Wexford sought damages for the losses incurred as a result of these misrepresentations, which they claimed were made under the Fair Trading Act 1987. The court had to decide whether the representations were misleading and whether Doolub was knowingly involved in making them.

The primary legal issue was whether the representations made by Doolub constituted misleading conduct under the Fair Trading Act 1987. Specifically, the court had to determine whether the representations related to future conduct and if so, whether they were misleading. Another issue was whether the reverse onus of proof applied, and if Doolub was knowingly involved in making the misleading representations. Additionally, the court had to consider whether a purpose trust existed, which would impact the recovery of damages by Wexford.

The court found that the representations made by Doolub were indeed misleading and related to future conduct. It was determined that the reverse onus of proof applied, and Doolub was knowingly involved in making the misleading representations. The court also found that a purpose trust did not exist, allowing Wexford to recover damages. Consequently, the court ruled in favour of Wexford and ordered Doolub to pay damages to Wexford for the losses incurred due to the misleading representations.

The court ordered Doolub to pay Wexford damages for the losses incurred as a result of the misleading representations. The exact amount of damages was not specified in the text, but it was noted that Wexford was entitled to recover the losses suffered due to the breach of contract. The court's decision provided clarity on the application of the Fair Trading Act 1987 in cases involving misleading representations and the recovery of damages in the absence of a purpose trust.

Orders