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Maranta v Lyons[2002] QDC 313

DISTRICT COURT

No D3294 of 2002

CIVIL JURISDICTION

JUDGE ROBIN QC

BARRY DOMINIC MARANTA

Applicant/Plaintiff

and

MAURICE JOHN LYONS

Respondent/Defendant

BRISBANE

DATE 28/10/2002

JUDGMENT

HIS HONOUR: This is a summary judgment application by Mr Maranta under UCPR rule 292. The Court has jurisdiction to give judgment if satisfied: (a) that the defendant, Mr Lyons, “has no real prospect of successfully defending”, and (b) “that there is no need for a trial”. While circumstances can arise in which the second consideration is important I do not think that the present circumstances are in that category. The philosophy behind rule 292 and indeed rule 293 accords with the “robust” view under the practice before the UCPR.

The Court of Appeal in Bernstrom v. The National Bank of Australia Limited [2002] QCA 231 QLR 12 October 2002, has emphasised this and (as I read what Jones J, Cullinane J agreeing, said) taking the line that judges ought to be encouraged to act under these rules for the reasons that are explained by Lord Woolf in Swain v. Hillman (2001) 1 All England Reports 91 at 92.

Mr Taylor, for the applicant/plaintiff, has referred me to earlier statements in Supreme Court matters including that of Chesterman J in Sparkes v. Berry, (2001) QSC 251 paragraph [7] and that of Mullins J in National Australia Bank Limited v. Hart (2002) QSC 51 paragraph [4], in particular the citation of what Wilson J said in McPhee v. Zarb (2002) QSC 4 which, as I read it, gives an example of one situation, but only one, in which a summary judgment might be given.

This is a matter in which the documentary material seems to me to support the plaintiff, subject to what I will say about the accounts of a partnership which companies associated with the parties and other companies established to purchase the Salisbury Hotel in Brisbane. The venture was less successful than the participants hoped. Through their companies the parties bought out a fourth partner.

The plaintiff's claim is for $150,000 being what he says was the defendant's proper contribution when $300,000 was paid to the National Australia Bank to clear a loan of $300,000 which it made to Mr Maranta and Mr Lyons personally. The loan documentation bears the signatures of both of them. Mr Lyons denies that he had any part in negotiating the loan with National Australia Bank but surmises that he must have attended at the bank for the purpose of signing. The document refers to a security to be supplied by a company called Kingville Proprietary Limited which company Mr Lyons identifies as one of which the plaintiff is a director.

The purpose of the $300,000 borrowing was to enable indebtedness of a similar amount which the partnership had with the Australia and New Zealand Banking Group Limited to be paid out. I will assume that was a partnership responsibility.

Mr Lyons says in his affidavit that Mr Maranta told him the loan was to be in the names of individuals rather than that of the companies forming the partnership to satisfy the bank's preference. He says that:

“It was always my understand (sic) that the refinancing was secured on behalf of the partnership for the purpose of paying out the existing overdraft with the ANZ Bank. I proceeded on the basis that the obligation to repay the loan at interest rested with the partnership and not with the plaintiff and myself as individuals.”

He does not depose to any statement or assurance in positive terms from Mr Maranta that that was the situation. The loan was paid out by Mr Maranta some time in June 1997 according to him at or about the time a meeting occurred between him and Mr Lyons, an accountant identified as Mr Maranta's accountant, and a lady who was his personal secretary. Mr Maranta swears Mr Lyons “said words to the effect of he would repay to me the $150,000 that was his share of the loan moneys when he was able to settle on some land which he was selling”. Mr Lyons in his affidavit denies that that meeting took place. As I read it, he disputes the necessity to repay the National Bank as early as in the event happened.

I understand that the receipt only late last week of Mr Lyons' affidavit might explain why there's no affidavit from Mr Walker or Ms Jewell corroborating what Mr Maranta says about the meeting. Even if there had been it seems to me that on an application such as this the Court might well consider there was a need for a trial to resolve the conflict which the evidence demonstrated. In the approach I take, Mr Maranta's account of the meeting does not advance his case. He gives unspecific evidence about having demanded payment from the defendant “on a number of occasions orally”. No clear demand is shown before December 1999 when Mr Maranta's solicitors sent a written demand.

Mr Lyons responded with a letter of 20 December 1999 denying indebtedness but admitting the transaction with the National Australia Bank and repayment of the $300,000 by the plaintiff. The letter makes the point:

“It would appear that your client is asserting that he and I only were responsible for that overdraft and the other four partners were exempt from their share of the liability. This assertion is ridiculous. The payment of $300,000 by your client would have been credited to his current account in the partnership balance sheet. Whatever is my liability to the other partners will not be known until such time as two blocks of land on the hotel site are sold and settlement of the sale of the hotel to Geo Luck Pty Ltd is effected on 20 December 2000.”

The letter goes on to list the substantial payments which Mr Lyons says he made on behalf of the partnership. I think it is right to accept the assertions made by Mr Lyons in the parts of the letter referred to. They seem little more than commonsense. The National Australia Bank transaction obviously was entered into in the interests of the partnership. As it happened, in the partnership accounts the repayment by Mr Maranta was noted and treated as swelling the partnership's indebtedness to him on the partnership's loan account with him. I think it a reasonable assumption that Mr Maranta would have known that's the way in which the partnership was documenting what had occurred.

Mr Taylor objected to evidence from Mr Lyons and also Mr Stanton (who is the accountant who prepared the material) regarding the partnership accounts as irrelevant and, in the case of Mr Lyons, hearsay.

It is my view that the material is relevant but that it does not control the situation in the least. I would expect that if Mr Maranta had his wish and received $150,000 from Mr Lyons, Mr Stanton would have adjusted their respective accounts with the partnership which, sadly, seems to have been in dire need of financial accommodation from the partners or their principals.

It is, in my view, incontrovertibly the case that the National Australia Bank would have been entitled to recover against both the plaintiff and the defendant. Given the identical liabilities of the two men, it seems to me a clear case where contribution applies. I have been referred to the new Common Law Library edition of Goff and Jones' famous work on Restitution at 398-99 and 415 and also to an equivalent passage in Meagher, Gummow and Lehane, Equity (third edition) at paragraph 1006, page 290.

Of course, the circumstances may be such as to show that the parties intended there be no contribution between them. Mr Lumb has referred in this connection to Anson v. Anson (1953) 1 QB 636 at 645 and Muschinski v. Dodds 160 CLR 583 at 597 per Gibbs CJ, Mr Taylor to Official Trustee in Bankruptcy v. Citibank (1995) 38 New South Wales Law Reports 116 at 128-29.

At the end of the day, it seems to me, all Mr Lyons has are his assertion of his understanding which I think is correct enough if regarded as identifying where ultimate responsibility to find the $300,000 lay. (It seems the partnership had made interest payments to the bank.) The task of the Court, in my opinion, is not to look to that ultimate incidence of liabilities which seems is going to be part of some general audit or balancing or other accounting exercise in relation to the partnership's affairs, something which has been anticipated for some time but hasn't yet happened.

The loan transaction with the bank, in my view, stands on its own as a perfectly ordinary transaction and I don't think anything about it would have exempted Mr Lyons from liability to the bank or from having to make contribution to Mr Maranta if he had insisted on it at the time when the bank was paid out.

It may well be that it was Mr Maranta who did the leg work in identifying the National Australia Bank as a lender in need, after unsuccessful approaches by him to other possible lenders. It may well have been only the bank's insistence that led to the transaction being established as one between it and the parties in this action. The Court ought to respect the form and the ordinary consequences of that transaction in my opinion. Mr Lyons is stuck with the ordinary commercial and legal consequences of having signed up. It does not matter that the parties may have had rights over against other people.

I appreciate that Mr Lyons claims, and it may be with every justification, that the state of the company's accounts may have led to Mr Maranta as the larger creditor being favoured on occasions when the partnership has had funds to discharge some of its indebtedness.

There is no material before me to indicate that anything of significance has happened along those lines, let alone anything which cannot be adjusted in due course when the partnership's affairs are looked at.

I think this is a case in which Mr Lyons has no real prospect of successfully defending the claim. That has to be qualified in so far as faces claims for interest at the statutory rate of 10 per cent. There is a penal aspect in the fixing of that figure, and for the good reason, that those who are subject to just demands, including judgments, ought to pay them or face expensive consequences. I doubt that in recent times Mr Maranta could have obtained such a handsome return.

There are also discretionary factors relating to the interest claim - one being that no demand was made by him which is clearly proved as to its date until December 1999. Subsequent to that, as he has acknowledged in his own affidavit, for tactical reasons he delayed instituting this action. Those tactical reasons related to his assessment that he needed the cooperation of Mr Lyons in certain real estate transactions which have now been completed.

There are issues regarding the appropriateness of awarding the penal rate of interest to a litigant who, for special reasons, has preferred to delay seeking redress from the Court. In the end I am relieved having to make an assessment of my own because Mr Taylor has accepted the force of a submission by Mr Lumb that interest ought be limited to the period from the enc of December, 1999.

So in the circumstances there will be judgment-----

...

HIS HONOUR: So it will be judgment for the plaintiff for $192,000, $42,000 of which is interest.

MR TAYLOR: Together with costs of the action, your Honour.

HIS HONOUR: Plus costs of the action and application to be assessed on the standard basis.

Close

Editorial Notes

  • Published Case Name:

    Barry Dominic Maranta v Maurice John Lyons

  • Shortened Case Name:

    Maranta v Lyons

  • MNC:

    [2002] QDC 313

  • Court:

    QDC

  • Judge(s):

    Robin QC DCJ

  • Date:

    28 Oct 2002

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

Cases Cited

Case NameFull CitationFrequency
Anson v Anson (1953) 1 QB 636
1 citation
Bankruptcy v Citibank (1995) 38 New South Wales Law Reports 116
1 citation
Bernstrom v National Australia Bank Ltd[2003] 1 Qd R 469; [2002] QCA 231
1 citation
McPhee v Zarb [2002] QSC 4
1 citation
Muschinski v Dodds (1985) 160 CLR 583
1 citation
National Australia Bank Ltd v Hart [2002] QSC 51
1 citation
Sparks v Berry [2001] QSC 251
1 citation
Swain v Hillman [2001] 1 all England Reports 91
1 citation

Cases Citing

No judgments on Queensland Judgments cite this judgment.

1

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