Wiles v Millard Shaw Pty Ltd - [2021] VSC 346

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

JUDICIAL REVIEW AND APPEALS LIST

S ECI 2019 05143

KELVIN WILES	Appellant
v
MILLARD SHAW PTY LTD (ACN 090 126 247)	Respondent

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JUDGE:	Ginnane J
WHERE HELD:	Melbourne
DATE OF HEARING:	29 October 2020
DATE OF JUDGMENT:	16 June 2021
CASE MAY BE CITED AS:	Wiles v Millard Shaw Pty Ltd
MEDIUM NEUTRAL CITATION:	[2021] VSC 346

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APPEAL – Magistrates’ Court orders – Contract – Factoring Agreement – Guarantee – Whether contract created – Whether subject to a condition precedent – Whether demand required under guarantee –Respondent’s claim for recovery of receiver’s fees – Whether respondent entitled to recover legal costs on an indemnity basis – Whether agreement provided financial services – Whether agreement subject to the Australian Consumer Law – Australian Securities and Investment Commission Act 2001 (Cth) ss 12BA, 12BAA; Competition and Consumer Act 2010 (Cth) s 131A, sch 2.

PRACTICE AND PROCEDURE – Costs – Indemnity costs – Power to award indemnity costs – Exercise of discretion to award indemnity costs.

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APPEARANCES:	Counsel	Solicitors
For the Appellant	Mr M Dean
For the Respondent	Mr I Hristovski	JHK Legal Australia Pty Ltd

HIS HONOUR:

Background

Mr Kelvin Wiles appeals on questions of law from orders of the Magistrates’ Court requiring him to pay $21,428.30 plus interest and indemnity costs to Millard Shaw Pty Ltd. The Court found that sum to be owing by his company, Find It Smart Franchising Pty Ltd, as a result of Millard Shaw providing invoice factoring finance to it. The Court found him liable to pay that sum under a guarantee of his company’s liabilities.

Millard Shaw Pty Ltd (‘Millard Shaw’) is a franchisee of a master franchisor. It provides services under the trading name Fifo Capital Port Phillip (‘Fifo’). I shall refer to it as Fifo. One of those services was invoice factoring finance, whereby businesses with cash flow difficulties, but awaiting payment of invoices or accounts receivable, sell those invoices at a discount of their face value for an immediate cash payment from the purchaser, who is assigned the right to collect the full value of the invoices.

In March 2016, Mr Kelvin Wiles (‘Wiles’) was the director of Find It Smart Franchising Pty Ltd (‘Find It Smart’), which conducted a franchise business offering advertising and related services to Victorian tourism businesses. He wanted to attend a franchising exhibition in Sydney but needed to pay the registration fee of $3,500 by 11 March 2016 and sought to obtain funds to do so. However, payments of invoices were due to be made to his company on 1 June 2016, 15 June 2016, 25 June 2016 and 25 July 2016 by one of its franchisees, Gacesa Enterprises Pty Ltd (‘Gacesa’).

On the morning of 10 March 2016, Fifo and Wiles discussed products it could offer Find It Smart, including an invoice factoring facility: ‘Fifo Invoice Finance Facility’. They exchanged emails and documents and later that day Fifo emailed…

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 Wiles v Millard Shaw Pty Ltd

Details

AGLC: Wiles v Millard Shaw Pty Ltd [2021] VSC 346
Case: [2021] VSC 346
Decision Date: 16 June 2021

CaseChat Overview and Summary

The matter before the court involved an appeal against a decision of the Magistrates’ Court regarding a contract between Wiles and Millard Shaw Pty Ltd. The dispute centred around a factoring agreement and a guarantee, with questions regarding the creation of the contract, the applicability of a condition precedent, and the necessity of a demand under the guarantee. Additionally, the court had to determine whether the respondent was entitled to recover receiver’s fees and legal costs on an indemnity basis. The case also raised issues concerning whether the agreement provided financial services and whether it was subject to the Australian Consumer Law.

The court was required to decide several key legal issues. First, whether a valid contract was formed between the parties. Second, whether the contract was subject to a condition precedent. Third, whether a demand was required under the guarantee for the respondent to be entitled to the guarantee. The court also needed to assess whether the respondent was entitled to recover receiver’s fees and legal costs on an indemnity basis. Furthermore, the court had to consider whether the agreement provided financial services and whether it was subject to the Australian Consumer Law.

The court held that there was no valid contract between the parties as the agreement was subject to a condition precedent which had not been satisfied. The court found that the guarantee did not require a demand for payment before the respondent could seek the guarantee. The court further held that the respondent was not entitled to recover receiver’s fees and legal costs on an indemnity basis. The court also determined that the agreement did not provide financial services and was not subject to the Australian Consumer Law. The appeal was thus upheld, and the orders of the Magistrates’ Court were set aside.

The final orders of the court were that the appeal be allowed, the orders of the Magistrates’ Court be set aside, and each party bear their own costs of the appeal.

Orders