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Yakiti Pty Ltd v MacDonald

Yakiti Pty Ltd v MacDonald

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Case Copied 12 December 2019 78 min read

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Supreme Court

New South Wales

Amendment notes

Medium Neutral Citation: Yakiti Pty Ltd v MacDonald [2019] NSWSC 1772
Hearing dates: 6-8, 18-19 February, 9 April 2019.
Date of orders: 12 December 2019
Decision date: 12 December 2019
Jurisdiction: Common Law
Before: Hamill J
Decision:
(1) The plaintiff is entitled to succeed on its statement of claim.
(2) The cross-claim will be dismissed.
(3) The plaintiff is entitled to possession of the two parcels of land referred to in the statement of claim and to an order for leave to issue the writs of possession.
(4) The plaintiff is entitled to recover the debts under the two loan agreements together with interest in accordance with the loan agreement until the date of judgment and thereafter in accordance with s 100 of the Civil Procedure Act 2005 (NSW).
(5) The defendant/cross claimant to pay the costs of the plaintiff and cross-defendants.
(6) Direct that the plaintiff is to file short minutes of order reflecting those findings and supporting calculations within 7 days. If the defendant takes issue with any of the form of orders it should exercise liberty to apply within 3 working days of the draft orders being filed. In the absence of that, the Court will pronounce the orders at a time to be notified to the parties.

Catchwords:
CIVIL LAW – loans secured by mortgage – loans not repaid – cross-claim – negotiations to take over business to which loan money advanced – whether binding agreement reached – where division of shares not settled – whether essential term of agreement – where borrower ill and hospitalised – unconscionability – whether lender acted unconscionably in proceeding in the absence of the borrower – where business failing – losing money hand over fist – where borrower failed to respond to urgent message – where other communications demonstrate capacity to communicate – evidence inconsistent unconvincing and implausible – double satisfaction – Adam Smith School of Economics
CIVIL LAW – procedure – repeated amendments to cross-claim – refusal by different Judge to allow amendment to third further amended cross-claim – attempt to make further amendments part way through submissions – earnest and spirited debate – dilatory conduct of litigation
Legislation Cited: Australian Securities and Investment Commission Act 2001 (Cth), ss 12BAA, 12BAB, 12CA, 12CB, 12CC.
Australian Securities and Investments Commission Regulations 2001 (Cth), reg 2B.
Civil Procedure Act 2005 (NSW), s 100.
Real Property Act 1900 (NSW), s 65.
Cases Cited: Baxter v Obacelo Pty Ltd (2001) 205 CLR 635; [2001] HCA 66
Blomley v Ryan (1956) 99 CLR 362
Booker Industries Pty Ltd v Wilson Parking (Qld) Pty Ltd (1982) 149 CLR 600; [1982] HCA 53
Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153; [2001] NSWCA 61
British Steel Corpn v Cleveland Bridge and Engineering Co Ltd [1984] 1 All ER 504
Castellan v Electric Power Transmission (1967) 69 SR (NSW) 159
Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149…

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: [2019] NSWSC 1772
Decision Date: 12 December 2019

CaseChat Overview and Summary

Yakiti Pty Ltd, the plaintiff, brought an action against MacDonald, the defendant, in the Federal Circuit Court of Australia seeking the repayment of several loans secured by a mortgage. The loans were not repaid, leading to the dispute. The defendant, in turn, filed a cross-claim seeking to set aside the mortgage and arguing that an agreement was reached for him to take over the plaintiff's business. However, the parties could not agree on the division of shares, which the defendant argued was not an essential term. The defendant was also ill and hospitalised, and the plaintiff proceeded without him. The defendant claimed that the plaintiff acted unconscionably in these circumstances, especially since the business was failing. The plaintiff argued that the defendant had the capacity to communicate and had failed to respond to urgent messages, and that the evidence provided by the defendant was inconsistent, unconvincing, and implausible. The case also discussed the double satisfaction principle and the Adam Smith School of Economics.

The court had to decide whether there was a binding agreement reached between the parties to take over the plaintiff's business, and whether the failure to agree on the division of shares was an essential term. The court also had to determine if the plaintiff acted unconscionably in proceeding with the enforcement of the mortgage in the absence of the defendant who was ill and hospitalised. The court further had to consider the procedural issues, including the refusal of a different judge to allow further amendments to the cross-claim and the defendant's attempt to make further amendments part way through submissions. The court had to weigh the dilatory conduct of the litigation against the merits of the case.

The court found that there was no binding agreement between the parties to take over the plaintiff's business, and that the failure to agree on the division of shares was an essential term. The court also found that the plaintiff did not act unconscionably in proceeding with the enforcement of the mortgage in the absence of the defendant who was ill and hospitalised. The court held that the evidence provided by the defendant was inconsistent, unconvincing, and implausible. The court further found that the defendant's conduct in the litigation was dilatory and that the repeated amendments to the cross-claim were not justified. The court dismissed the cross-claim and ordered the defendant to pay the plaintiff's costs.

Orders