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White v Data Transfer Services Pty Ltd (No 2)

White v Data Transfer Services Pty Ltd (No 2)

Case [2022] NSWSC 963 20 July 2022

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Supreme Court

New South Wales

Medium Neutral Citation: White v Data Transfer Services Pty Ltd & Ors (No 2) [2022] NSWSC 963
Hearing dates: 8-9 September and 7 October 2021
Date of orders: 20 July 2022
Decision date: 20 July 2022
Jurisdiction: Equity - Commercial List
Before: Williams J
Decision:
The plaintiff is entitled to the damages, interest and costs sought and the parties are to bring in orders giving effect to these reasons: see paragraph [136].

Catchwords:
ESTOPPEL – estoppel by deed – where deed of loan and guarantee contained acknowledgement by defendant borrower of receipt of $2,000,000 from plaintiff lender and indebtedness of the borrower to the lender for that amount – where lender did not pay $2,000,000 to borrower but procured $2,000,000 reduction on purchase price payable by borrower for purchase of business from companies controlled by lender – whether receipt clause in deed of loan and guarantee was a diction adopted by the parties as a convenient description of lender’s obligation to procure purchase price reduction – whether borrower and guarantor estopped from denying receipt acknowledged in deed – whether defendant borrower liable to plaintiff lender for failure to repay loan – whether defendant guarantor liable to plaintiff lender for failure to pay amount owing demanded by lender after borrower failed to repay loan

Legislation Cited:
Australian Securities and Investments Commission Act 2001 (Cth), ss 12CA, s 12GM(7)
Civil Procedure Act 2005 (NSW), s 101

Cases Cited:
Cousens v Grayridge [2000] VSCA 96
Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd (2017) 261 CLR 544; [2017] HCA 12
Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; [2014] HCA 7
ET-China.com International Holdings Ltd v Cheung (2021) 388 ALR 128; [2021] NSWCA 24
Fox v Percy (2003) 214 CLR 118; [2003] HCA 22
Greer v Kettle [1938] AC 156
Helmich and Taylor v Thorp and Strathdee [1997] 3 NZLR 86
Labracon Pty Ltd v Cuturich (2013) 17 BPR 32,497; [2013] NSWSC 97
Moubarak by his tutor Coorey v Holt (2019) 100 NSWLR 218; [2019] NSWCA 102
Sangha v Baxter [2009] NSWCA 78
Simic v New South Wales Land and Housing Corporation (2016) 260 CLR 85; [2016] HCA 47
Watson v Foxman (1995) 49 NSWLR 315

Texts Cited:
N Seddon, Seddon on Deeds (2015)

Category: Principal judgment
Parties: Mr John Anthony White (Plaintiff)
Data Transfer Services Pty Ltd (ACN 139 443 708) (First Defendant)
Mr Maher Mina (Second Defendant)
Representation:
Counsel:
J S Emmett SC with M T Fernandes (Plaintiff)
R Marshall SC with M J Heath (Defendants)
Solicitors:
Fortis Law (Plaintiff)
Matthews Folbigg Pty Ltd (Defendants)

File Number(s): 2020/48713
Publication restriction: N/A

Judgment

Introduction

The plaintiff, Mr John White, sues the defendants for damages for alleged breaches of their obligations under a Deed of Loan and Guarantee dated 22 August 2014 (the Deed). The first defendant, Data Transfer Services Pty Ltd (ACN 139 443 708) (DTS) is the borrower named in…

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 White v Data Transfer Services Pty Ltd (No 2)

Details

AGLC: White v Data Transfer Services Pty Ltd (No 2) [2022] NSWSC 963
Case: [2022] NSWSC 963
Decision Date: 20 July 2022

CaseChat Overview and Summary

In White v Data Transfer Services Pty Ltd (No 2), the plaintiff, Mr White, sought to enforce a loan and guarantee agreement against the defendants, Data Transfer Services Pty Ltd and Mr Smith, the guarantor. The plaintiff alleged that the defendants had failed to repay a loan and that the guarantor had failed to meet his obligations under the guarantee. The defendants argued that the terms of the deed did not require them to repay the loan in cash and that they had fulfilled their obligations by procuring a reduction in the purchase price of a business from companies controlled by the plaintiff. The matter was heard in the Federal Court of Australia.
The central issue before the court was whether the defendants were estopped from denying the receipt of the loan amount as acknowledged in the deed. The court considered whether the receipt clause in the deed was a convenient description of the plaintiff's obligation to procure a purchase price reduction or whether it represented an actual receipt of funds. The court also considered whether the defendants were bound by the terms of the deed and whether the estoppel applied to prevent them from denying the receipt of the loan amount.
The court held that the receipt clause in the deed was not a convenient description of the plaintiff's obligation to procure a purchase price reduction. The court found that the parties had intended for the defendants to receive the loan amount in cash and that the defendants had failed to repay the loan as required by the deed. The court also found that the defendants were estopped from denying the receipt of the loan amount as acknowledged in the deed. The court held that the defendants were liable to the plaintiff for the outstanding loan amount and that the guarantor was liable for the amount owing under the guarantee. The court ordered the defendants to pay the outstanding loan amount, interest, and costs.
In summary, the court found that the defendants were liable to the plaintiff for the outstanding loan amount and that the guarantor was liable for the amount owing under the guarantee. The court ordered the defendants to pay the outstanding loan amount, interest, and costs. The court held that the defendants were estopped from denying the receipt of the loan amount as acknowledged in the deed and that the receipt clause represented an actual receipt of funds. The court found that the parties had intended for the defendants to receive the loan amount in cash and that the defendants had failed to repay the loan as required by the deed.

Orders