Gambetta Holdings Pty Ltd v City & Suburban Group Pty Ltd [No 2]

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION: PERTH

CITATION: GAMBETTA HOLDINGS PTY LTD -v- CITY & SUBURBAN GROUP PTY LTD [No 2] [2013] WADC 34

CORAM: CURTHOYS DCJ

HEARD: 1 FEBRUARY 2013

DELIVERED : 15 MARCH 2013

FILE NO/S: CIV 648 of 2009

BETWEEN: GAMBETTA HOLDINGS PTY LTD
Appellant
AND
CITY & SUBURBAN GROUP PTY LTD
Respondent

Catchwords:

Means Inquiry - Trustee - Capacity in which sued

Legislation:

Civil Judgments Enforcement Act 2004 s 26

Result:

Appeal allowed

Representation:

Counsel:

Appellant: Mr P S Bates
Respondent: Mr H R Robinson

Solicitors:

Appellant: McVay Bates & Associates
Respondent: Haydn Robinson

Case(s) referred to in judgment(s):

Agusta Pty Ltd v Provident Capital Ltd [2012] NSWCA 26

CURTHOYS DCJ: On 26 October 2010 the appellant obtained judgment against the respondent for $60,072 and costs. The appellant's claim arose out of a contract for the supply of goods and services.
The appellant sought to explore the means to recover the judgment debt under s 26 of the Civil Judgments Enforcement Act 2004.
On 2 March 2012 a Means Inquiry was held. Mr Warren of the respondent was examined. He said that the company as distinct from the trustee, had no assets of any description in its name and never had any assets in its name. He also said that it had never traded (ts 261).
At the Means Inquiry the respondent submitted that, since it had not been sued in its capacity as trustee, questions relating to the assets it held as trustee, were irrelevant (ts 261).
When making contracts in the course of administrating the trust, the trustee contracts as a principal. The respondent contracted as principal.
In entering into the contract, the subject of the judgment, the respondent did so in the exercise of its duties as trustee. In these circumstances:
… the liability falls on the trustee personally ... trustees who carry on trade are liable to trade creditors for the debts incurred in that business to the same extent as if they had been carrying on business on their own account (Wightman v Townroe (1813) 1 M & S 412; (1813) 105 ER 154). (See: Ford HAJ and Lee WA, The Law of Trusts (at January 2013) [14.010]).
Since the respondent contracted as principal, even if it is a trustee, the question is what assets are available to satisfy the judgment debt. The assets available to satisfy the judgment debt include the right of indemnity against the trust assets.
The position taken by the respondent, that it had to be sued as a trustee, is misconceived.
The situation is different to that of an agent and an undisclosed principal where the judgment creditor must elect.
In any event, if the respondent sought to rely on the fact that it was not sued as trustee it should have pleaded that. It cannot now claim that the wrong party was so as to prevent the appellant recovering the judgment debt.
Agusta Pty Ltd v Provident Capital Ltd [2012] NSWCA 26 is irrelevant because that is a case about the means of recovery against trust assets. A Means Inquiry is directed to what is available - not the means of recovery.
The respondent's right of indemnity against the trust assets is available to the appellant. The appellant is entitled to inquire as to the worth of the right of indemnity by reference to the assets of the trust. Accordingly, the Means Inquiry should proceed.
I order that:
1.The appeal be allowed.
2.The appellant be at liberty to proceed with the Means Inquiry relating to the assets of the trust.
3.The respondent pay the appellant's costs of this appeal and the costs before the registrar.

In this case, the plaintiff, Gambetta Holdings Pty Ltd, brought proceedings against the defendant, City & Suburban Group Pty Ltd, in the Supreme Court of New South Wales. The plaintiff sought to enforce a judgment against the defendant, which had been obtained in a previous case. The defendant claimed that the judgment could not be enforced as it was obtained in a manner that was not in line with the principles of natural justice. The defendant also argued that the trustee, who was the defendant's director, was not a proper party to be sued in the capacity in which they were sued. The court was required to determine whether the defendant's arguments were valid and whether the plaintiff's judgment could be enforced.

The court considered whether the defendant's arguments regarding the principles of natural justice and the capacity in which the trustee was sued were valid. The court found that the defendant's arguments were not well-founded and that the trustee was a proper party to be sued in their capacity as a director of the defendant. The court also found that the judgment obtained by the plaintiff was valid and enforceable. The court held that the defendant's arguments were an attempt to relitigate issues that had already been decided in the previous case and that the defendant was estopped from raising those arguments again.

The court ordered that the defendant pay the plaintiff the amount of the judgment, plus interest and costs. The court also ordered that the defendant's arguments regarding the capacity in which the trustee was sued were without merit and that the trustee was a proper party to be sued in their capacity as a director of the defendant. The court further held that the defendant was estopped from raising those arguments again and that the plaintiff's judgment was valid and enforceable. The court dismissed the defendant's defence and ordered that the plaintiff recover the amount of the judgment, plus interest and costs from the defendant.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established