Constantinidis v Equititrust Ltd [2010] NSWSC 299 (20 April 2010)

Last Updated: 21 April 2010

NEW SOUTH WALES SUPREME COURT

CITATION:
Constantinidis v Equititrust Ltd [2010] NSWSC 299


JURISDICTION:
Equity Division
Corporations List

FILE NUMBER(S):
2010/00076669

HEARING DATE(S):
15/04/10

JUDGMENT DATE:
20 April 2010

PARTIES:
Achilles Constantinidis - First Plaintiff
Checkling Pty Ltd - Second Plaintiff
Windsor Turf Pty Ltd - Third Plaintiff
Gonfanon Pty Ltd - Fourth Plaintiff
Equititrust Limited - First Defendant
David Clout - Second Defendant


JUDGMENT OF:
Barrett J

LOWER COURT JURISDICTION:
Not Applicable

LOWER COURT FILE NUMBER(S):
Not Applicable

LOWER COURT JUDICIAL OFFICER:
Not Applicable



COUNSEL:
Mr M R Pesman - Plaintiffs
Mr E A J Hyde - First and Second Defendants

SOLICITORS:
Beazley Singleton - Plaintiffs
Tucker & Cowen - First and Second Defendants


CATCHWORDS:
CORPORATIONS - receivers controllers and managers - validity of appointment of receiver - application for declaration of invalidity - MORTGAGES - mortgages and charges generally - receivers - whether appointment of receiver by mortgagee valid - PRIMARY INDUSTRY - generally - farm debt mediation - Farm Debt Mediation Act 1994 - whether debt by borrowing to acquire land "incurred ... for the purposes of the conduct of a farming operation" - where borrower and lender enter into collateral agreement proving for resale of land with a view to profit

LEGISLATION CITED:
Corporations Act 2001 (Cth), s 418A(2)
Farm Debt Mediation Act 1994, ss 5(2)(c), 6, 8(1)

CATEGORY:
Principal judgment

CASES CITED:
Australian Cherry Exports Ltd v Commonwealth Bank of Australia (1996) 39 NSWLR 337
Mayfair Trading Co Pty Ltd v Dreyer [1958] HCA 55; (1958) 101 CLR 428
McClelland v Federal Commissioner of Taxation [1970] HCA 39; (1970) 120 CLR 487
Varga v Commonwealth Bank of Australia [1996] NSWSC 86; (1996) 7 BPR 15,052

TEXTS CITED:


DECISION:
Proceedings dismissed with costs



JUDGMENT:

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
CORPORATIONS LIST


BARRETT J

TUESDAY 20 APRIL 2010

2010/00076669 ACHILLES CONSTANTINIDIS & 3 ORS v EQUITITRUST LIMITED & 4 ORS

JUDGMENT

1 This is an application under s 418A(2) of the Corporations Act 2001 (Cth). That section empowers the court to make a declaratory order as to whether or not the appointment of a receiver of property of a corporation is valid.

2 The order the plaintiffs seek is, in terms, an order that the second defendant, Mr Clout, be removed as receiver and manager of Checkling Pty Ltd (“Checkling”), Windsor Turf Pty Ltd (“Windsor”) and Gonfanon Pty Ltd (“Gonfanon”). I shall, however, treat the application as one for a declaration under s 418A(2) that Mr Clout’s appointment is, in each case, not valid.

3 The three companies mentioned are owned and controlled by Mr Achilles Constantinidis, the sole director of each. They and he are the plaintiffs.

4 Each appointment (or purported appointment) of Mr Clout as receiver was made by the first defendant, Equititrust Limited (“Equititrust”), on 10 March 2010 in exercise of a power conferred by a security. It is not disputed that defaults enlivening the power to make an out-of-court appointment of a receiver had occurred.

5 The plaintiffs say that Equititrust, in making the appointments on 10 March 2010, acted in contravention of s 8(1) of the Farm Debt Mediation Act 1994:

“A creditor to whom money under a farm mortgage is owed by a farmer must not take enforcement action against the farmer in respect of the farm mortgage until at least 21 days have elapsed after the creditor has given a notice to the farmer under this section.”

6 As a result, the plaintiffs contend, Mr Clout’s appointment was rendered void by s 6 of that Act:

“Enforcement action taken by a creditor to whom this Act applies otherwise than in compliance with this Act is void.”

7 The prohibition in s 8(1) operates upon a “creditor”; and it is enforcement action taken by a “creditor” contrary to that prohibition that s 6 makes void. The statutory definition of “creditor” is:

“’creditor’ means a person to whom a farm debt is for the time being owed by a farmer.”

8 The definition of “farm debt” and “farmer” must therefore be considered. They are as follows:

“’farm debt’ means a debt incurred by a farmer for the purposes of the conduct of a farming operation that is secured wholly or partly by a farm mortgage.”

“’farmer’ means a person (whether an individual person or a corporation) who is solely or principally engaged in a farming operation and includes a person who owns land cultivated under a share-farming agreement and the personal representatives of a deceased farmer.”

9 Several other relevant definitions are as follows:

“’enforcement action’, in relation to a farm mortgage, means taking possession of property under the mortgage or any other action to enforce the mortgage, including the giving of any statutory enforcement notice, or the continuation of any action to that end already commenced, but does not include:

(a) the completion of the sale of property held under the mortgage in respect of which contracts were exchanged before the commencement of this Act, or

(b) the enforcement of a judgment that was obtained before the commencement of this Act.

...

’farm’ means land on which a farmer engages in a farming operation.

’farm mortgage’ includes any interest in, or power over, any farm property securing obligations of the farmer whether as a debtor or guarantor, including any interest in, or power arising from, a hire purchase agreement relating to farm machinery, but does not include:

(a) any stock mortgage or any crop or wool lien, or

(b) the interest of the lessor of any farm machinery that is leased.

’farm property’ means:

(a) a farm or part of a farm, or

(b) farm machinery used by a farmer in connection with a farming operation, or

(c) an access licence (within the meaning of the Water Management Act 2000) held by a farmer in connection with a farming operation.

’farming operation’ means:

(a) a farming (including dairy farming, poultry farming and bee farming), pastoral, horticultural or grazing operation, or

(b) any other operation prescribed by the regulations for the purposes of this definition.”

10 Matters of timing raised by these provisions must be noted.

11 The s 8(1) prohibition operates to preclude action by a person who, at the time the action is taken, is a “creditor” to whom money is, at that time, owed under a mortgage which is at that time a “farm mortgage” by a person who is, at that time, a “farmer”. Thus, the prohibition does not operate unless all of “creditor” status of the person taking action, the “farm mortgage” status of the mortgage under which money is owed to that person and the “farmer” status of the person owing the money exist at the time the action is taken.

12 For a person to have “creditor” status at the particular time, it must be found that a “farm debt” is at that time owed to that person by a person who is a “farmer” at that time.

13 When one comes to the definition of “farm debt” and the question whether a particular debt is today a “farm debt”, however, it is necessary to look not only to the present but also to the past. This is because the definition of “farm debt” has regard to circumstances existing when the debt was “incurred”. In speaking of a debt “incurred . . . for the purposes of the conduct of a farming operation” and directing attention to the purposes for which the debt was incurred, the definition of “farm debt” necessarily pays attention to purposes existing at the past time when the debt was incurred. But that, it seems to me, is the only past aspect to which attention is directed. To the extent that the definition of “farm debt” refers to incurring by a “farmer” and security under a “farm mortgage”, it directs attention to the present status of the person who incurred the debt in the past and the present status of the mortgage by which the debt is secured.

14 I am of the opinion, in particular, that one does not look for either “farmer” status or the existence of the mortgage at the time of the incurring of the debt. This is because the aim of the Act is to protect persons who are for the time being farmers from action under mortgages which for the time being exist over properties that are for the time being farm properties – but only where the secured debt incurred in the past was obtained for farming purposes. Applying the approach I consider to be correct, a person who is today a farmer and whose farm property stands today as security for a debt will be protected if the purpose of the original incurring of the debt was a relevant farming purpose (and whether or not the person was then a farmer), but not if the original incurring was for some non-farming purpose; while, if the original incurring was for a relevant farming purpose but either the person by whom the debt is owed is not today a farmer or the security property is not today a farming property, the protection will not be attracted.

15 These approaches are, to my mind, consistent with the legislative intention as recognised in decided cases and in line with previous decisions: see, for example, the decision of the Court of Appeal in Australian Cherry Exports Ltd v Commonwealth Bank of Australia (1996) 39 NSWLR 337 and that of Young J a few days later in Varga v Commonwealth Bank of Australia [1996] NSWSC 86; (1996) 7 BPR 15,052.

16 In the first of those cases, Clarke JA also referred to the definition of “enforcement action” and regarded as relevant to its interpretation the following observation of Dixon CJ in Mayfair Trading Co Pty Ltd v Dreyer [1958] HCA 55; (1958) 101 CLR 428 (at 448):

“... The words ‘enforce’, ‘enforceable’ and ‘enforcement’ when used in relation to a security may properly be applied to the exercise of any of the remedies which the security may give.”

17 The appointment of a receiver pursuant to a power of appointment conferred by a security must therefore be accepted as being within the statutory definition.

18 Against that background, I turn to the circumstances of this case. Two of the three companies borrowed money from Equititrust. The borrowings were made in early 2008. The borrowers were Gonfanon and Checkling. I shall consider each separately.

19 By letter dated 7 January 2008, Equititrust made a loan offer of $6,600,000 to Gonfanon. The purpose of the loan was stated to be “Property Acquisition”. The property concerned is known as the “Richmond Lowlands”. A credit facility deed was entered into between Gonfanon and Equititrust on 9 January 2008 in respect of the $6,600,000 facility. Mr Constantinidis was also a party, as guarantor of the obligations of Gonfanon. The deed stated that the obligations of Equititrust were “subject to and conditional upon” the provision of the “Security” which was defined to include:

(a) the deed itself;

(b) a first mortgage by Gonfanon over certain lands forming part of the Richmond Lowlands;

(c) a second mortgage by Gonfanon over the remainder of the Richmond Lowlands;

(d) a deed of guarantee and indemnity executed by Mr Constantinidis; and

(e) a “profit sharing agreement” between Equititrust and Gonfanon.

20 On 9 January 2008, Gonfanon and Equititrust entered into a “profit sharing agreement” in relation to the Richmond Lowlands. The agreement recited Gonfanon’s purchase of the land, Equititrust’s agreement to provide financial accommodation for the purchase and its taking of registered mortgages over the land; then:

“C. Gonfanon proposes to realign boundaries and may resubdivide but intends to resell the land at a profit.

D. The parties wish to record the terms of their agreement for Gonfanon to purchase and resell the land in accordance with the terms of this Agreement.”

21 Clauses 3.1 and 3.2 were in these terms:

“3.1 The Parties hereby associate and form together in a profit share venture in order to execute and carry out the Project.

3.2 The intent of Gonfanon is to purchase the land and resell it (as individual lots or a whole) with a view to maximising the return. The intent of ET is to provide funding in accordance with the terms of the Letter of Offer dated 7^th January 2008.”

22 The expression “Project” was defined as “the resale of the land”. Clause 7.1 said:

“The Project shall be executed so as to maximise profit.”

23 Clause 4 set out obligations of the parties. Among the obligations of Gonfanon were an obligation “to provide all project management services as may be required to conduct and complete the Project” and, most significantly for present purposes, an obligation “to complete the Project”. Gonfanon thus undertook a positive obligation to resell; and that positive obligation was part and parcel of the arrangements for the provision of acquisition finance.

24 None of the profit sharing agreement, the letter of offer, the credit facility deed and the securities created to secure the funds advanced by Equititrust said anything about farming or similar matters in relation to the Richmond Lowlands.

25 A virtually identical transaction was entered into between Checkling and Equititrust with respect to land known as the Dairy Farm. On 5 February 2008, Checkling and Equititrust entered into a separate profit sharing agreement in relation to that land. The agreement recited Checkling’s purchase of the land and Equititrust’s agreement to provide financial accommodation for the purchase and its taking of registered mortgages over the land; then:

“C. Checkling proposes to realign boundaries and may resubdivide but intends to resell the land at a profit.

D. The parties wish to record the terms of their agreement for Checkling to purchase and resell the land in accordance with the terms of the Agreement.”

26 Clauses 3.1, 3.2 and 7.1 were the same as in the corresponding provisions in the earlier Gonfanon agreement relating to the Richmond Lowlands, save that the letter of offer referred to in clause 3.2 was dated 5 February 2008. The definition of “Project” was the same as in the earlier agreement (“the resale of the land”); and, as in the other case, there was, in clause 4.1, an obligation of Checkling to provide “all project management services required to conduct the Project” and, again significantly, an obligation “to complete the Project” – that is, to effect “the resale of the land”. The relevant letter of offer described the purpose of the loan as “property acquisition and costs as follows” (the costs referred to certain fees and outlays).

27 In the Checkling case too, there was a detailed credit facility deed guaranteed by Mr Constantinidis, mortgages of the land itself and a general charge over Checkling’s assets and undertaking, with the guarantee, the mortgages, the charge and the profit sharing agreement being Equititrust’s “Security” as referred to in the credit facility deed. And again none of the documents referred to farming or similar matters in relation to the relevant land.

28 Some considerable time after these transactions had been completed, Windsor gave third-party security in respect of the indebtedness of Checkling to Equititrust. This was in the form of a general charge over the whole of the assets and undertaking of Windsor. In terms, it secured both direct indebtedness of Windsor to Equititrust and indebtedness of Checkling to Equititrust. Since it is not suggested that there is any direct indebtedness secured, I pay attention to the security as a third party security only. The security given by Windsor is dated 1 July 2009.

29 On 26 October 2007 – that is, before any of the transactions already mentioned had been entered into – Checkling had entered into a contract with a company called Windsor Turf Supplies for the purchase of a business for a price of $1.5 million, apportioned $500,000 to goodwill and $1 million to equipment. This business was apparently associated in some way with a parcel of land also purchased by Checkling and known as the Turf Farm. That parcel of land is quite distinct from the Richmond Lowlands and Dairy Farm. It is situated to the east of both those properties and, according to an aerial photograph, is separated from them by more than the length of the main runway of RAAF Richmond.

30 There are thus three distinct parcels of land subject to securities held by Equititrust. First, the Richmond Lowlands are subject to security given by Gonfanon to Equititrust as part of the arrangements of January 2008, which security secures indebtedness of Gonfanon to Equititrust. Second, the Dairy Farm is subject to security given by Checkling to Equititrust as part of the separate arrangements of February 2008, which security secures indebtedness of Checkling to Equititrust. Third, the Turf Farm, being an asset of Checkling distinct from the Dairy Farm, is within the general charge given by Checkling to Equititrust in February 2008.

31 In addition to the above, the general charge given by Windsor to Equititrust stands as further security for Checkling’s indebtedness to Equititrust.

32 There were, however, only two relevant borrowings, being those related to the acquisition of the Richmond Lowlands and the Dairy Farm and made by Gonfanon and Checkling respectively. Assuming that each of those companies is a “farmer”, a decision whether Equititrust is a person to whom a “farm debt” is for the time being owed therefore depends on whether the particular company incurred the debt “for the purposes of the conduct of a farming operation”. The central question goes to the purposes of the incurring of the debt.

33 In construing the words “incurred . . . for the purposes of the conduct of a farming operation”, I should proceed on a twofold basis: first, since the indebtedness of each of Gonfalon and Checkling under its early 2008 borrowing was obviously incurred in order to buy the particular land, I should regard the purposes for which the land was acquired as corresponding with the purposes for which the indebtedness was incurred; and, second, I should, in seeking the relevant purposes, adopt the approach that has been taken to the income tax provision which has regard whether a person acquired property “for the purpose of profit-making by sale”. In the latter connection, it is relevant to quote observations of Lord Pearson (with Lord MacDermott concurring) in McClelland v Federal Commissioner of Taxation [1970] HCA 39; (1970) 120 CLR 487 at 500:

“But I think it can now be taken as settled by later cases that the 'purpose' referred to in the phrase in s 26(a) 'for the purpose of profit-making by sale' is the dominant or main purpose (Evans v Deputy Federal Comr of Taxation (SA) ((1936) [1936] HCA 2; 55 CLR 80 at 99) per Rich, Dixon and Evatt JJ); 'The purpose of which it speaks is the dominant purpose actuating the acquisition of the assets—the use to which they are to be put' (Buckland v Federal Comr of Taxation ((1960) 12 ATD 166 at 169) per Windeyer J); 'When a person buys property, as a commercial money-making transaction and not for his personal use or enjoyment, the purpose he has in view is the use to which he intends to put the property to achieve this end. He may intend either to sell it at a profit, or to keep it as a revenue-producing asset. In relation to s 26(a) it is the main or dominant purpose of the acquisition that is significant. If a property, say a house or farm, were bought for the purpose of resale at a profit it would be immaterial that the purchaser also had in mind to take the rents and profits in the meantime or pending selling to use it for some purpose of his own' (Pascoe v Federal Comr of Taxation ((1956) 11 ATD 108 at 112) per Fullagar J).”

34 In the present case, therefore, the focus must be upon the dominant or main purpose which, in early 2008, actuated the land purchases and therefore the borrowings made to achieve those purchases.

35 In the case of the Dairy Farm, it is said by the plaintiffs that Checkling incurred indebtedness by borrowing to purchase the land in order to conduct a turf farming operation. There is, however, no objective evidence of the existence of any such purpose at the time of the acquisition. Mere assertion, as at today, by the natural person who is and was the sole brain of the company as to what the company’s purpose was at the time of acquisition (and there are various such statements in Mr Constantinidis’s affidavits) can be of no real assistance unless borne out by evidence of things said and done at the earlier time. In any event, Mr Constantinidis said that he had a plan to re-align boundaries of lots and to build polo stables, agistment yards and a polo field, which does not fit within the statutory definition of “farming operation”.

36 There is, of course, evidence that Checkling acquired a turf farming business under the contract of 26 October 2007. But that business was associated with the quite distinct parcel of land known as the Turf Farm situated a considerable distance from the Dairy Farm. There is nothing in the evidence of contemporary events to suggest that a purpose of conducting a turf farming operation attended the acquisition of the Dairy Farm.

37 There are very clear indications in the evidence of contemporary events not only that Equititrust made available a substantial loan to assist Checkling with the purchase of the Dairy Farm but also that Equititrust did so on the footing of an express understanding and agreement as to Checkling’s purpose in acquiring the land, being a purpose of profit making by sale. Indeed, Checkling accepted an express contractual obligation to complete resale of the land (that being “the Project” that Checkling undertook to “complete”).

38 It is not at all difficult to infer that Equititrust would not have lent the money had not Checkling committed to the profit sharing agreement and promised to complete the Project. That agreement was expressed to be part of Equititrust’s “Security”. It recorded the explicit agreement of Checkling and Equititrust “for Checkling to purchase and resell the land in accordance with the terms of the Agreement”.

39 It is also relevant to note that development consent was obtained in October 2009 for certain boundary re-alignments within the Dairy Farm property. The relevant application had been lodged in March 2009. Furthermore, Equititrust played an active role in the obtaining of the consent from which one may infer that the “Project” was in train.

40 As to actual use of Dairy Farm at the moment, there is no dispute that turf growing and cattle agistment are conducted on the land.

41 A consideration of the whole of the evidence does not allow me to accept the recent assertion of Mr Constantinidis that Checkling was actuated by a dominant purpose of turf farming use when it acquired the Dairy Farm and raised purchase finance in early 2008; nor is there any sound basis on which to find that the dominant purpose of acquisition and borrowing was any other form of farming (or, indeed, a polo facility re-development). The dominant or main purpose of the acquisition and of the borrowing to finance it was that reflected in the profit sharing agreement, that is, to subject the land to the “Project” which centred wholly on preparation for advantageous sale followed by sale. It was no doubt envisaged when the land was purchased and the money was borrowed that the land would be put to some worthwhile use pending its being ready for sale. The situation and nature of the land probably made some kind of rural pursuit the most likely interim use. But that use did not represent the purpose of the acquisition or the purpose for which acquisition finance was obtained.

42 In the case of the Dairy Farm land, therefore, I find that the debt incurred by Checkling under the loan agreements with Equititrust was incurred for purposes of advantageous re-sale of the land and not, in terms of the statutory definition of “farm debt”, for “the purposes of the conduct of a farming operation”. This conclusion is in no way affected by the fact that some farming activities were conducted on the land after the acquisition and up to the present.

43 I turn now to the Richmond Lowlands.

44 Mr Constantinidis stated in an April 2010 affidavit that it was “always” his intention to use the Richmond Lowlands as a turf farm and for other agricultural purposes. Again, it is common ground that the land is currently being used for farming operations.

45 In the case of the Richmond Lowlands, there is evidence that consultants retained by Equititrust have been active in making submissions regarding land use. A request for rezoning was made in October 2009 with a view to parts of the land being rezoned “Housing Zone” pursuant to a new Local Environmental Plan. A request for expedition was made by letter dated 6 April 2010. A separate submission regarding the draft local environmental plan was made by letter of the same date. The thrust of that letter was in favour of inclusion of “recreation facility (outdoor)” and “equestrian centre” as uses permissible with development consent.

46 The conclusions with respect to the Richmond Lowlands are the same as those in relation to the Dairy Farm. The evidence as a whole does not show that Gonfanon was actuated by any farming purpose when it acquired the land and obtained finance to do so in early 2008. Mr Constantinidis’s statements in his recent affidavits about what he intended and planned at the time of acquisition cannot be accepted as in any way determinative. In this case also, the profit sharing agreement speaks much more loudly than any such statements. The dominant or main purpose of acquisition and the borrowing to finance it was the purpose reflected in the profit sharing agreement, being the purpose of carrying out the “Project” which Gonfanon expressly undertook to complete; and this is so even though there may have been some subsidiary or ancillary purpose of putting the land to some farming use pending readiness for resale.

47 Because the borrowings by Checkling and Gonfanon secured by the Equititrust securities were not made by those companies for the dominant or main purposes of the conduct of a farming operation but, rather, for the dominant or main purposes of implementing a project of advantageous resale, the debts incurred by Checkling and Gonfanon through the obtaining of those borrowings were not “incurred . . . for the purposes of the conduct of a farming operation”. Accordingly, neither debt was “farm debt”, as defined by the Farm Debt Mediation Act; and Equititrust, being the person to whom each debt has at all times been owing, is not a “creditor”, as so defined.

48 It follows that s 8(1) of the Act did not operate to preclude enforcement action by Equititrust by means of the appointment of a receiver on 10 March 2010 and that no such appointment is rendered void by s 6.

49 These conclusions hold good whether or not the Equititrust securities are within the “farm mortgage” definition and whether or not Checkling and Gonfanon are within the “farmer” definition.

50 This result makes it unnecessary to make a decision on another submission advanced made by Mr Hyde of counsel on behalf of Equititrust. I nevertheless deal with that submission briefly.

51 The submission is that s 6 and s 8(1) of the Farm Debt Mediation Act do not, in any event, apply because s 5(2)(c) says:

“This Act does not apply in respect of:

...

(c) a farmer, being a corporation, that is an externally administered corporation within the meaning of the Corporations Act 2001 of the Commonwealth.”

52 The first step in the submission is that a corporation in respect of the property of which a receiver (or receiver and manager) has been appointed and is acting is within the definition of “externally administered corporation” in the Corporations Act 2001 (Cth). That may be accepted. Next, it is said that the appointment of a receiver of the property of a corporation that is a “farmer” has the effect that the Farm Debt Mediation Act does not apply in respect of that “farmer”. That too may be accepted. The next step is controversial: therefore s 8(1) and s 6 did not apply to Checkling or Gonfanon after Equititrust had appointed receivers on 10 March 2010, with the result that s 6 did not make void the receiver appointments made by Equititrust.

53 The third step is one that cannot be taken, even assuming that Checkling and Gonfanon were “farmers” on 10 March 2010 and that other pre-conditions were satisfied. This is because, in the particular context, s 6 makes void an appointment of a receiver made in contravention of s 8(1) – and does so as at the time at which the appointment would otherwise have taken effect. That result is produced by the operation of the section not in relation to the company to which a receiver has already been appointed but in relation to the company that is purportedly being made the subject of the appointment. Section 6 intercepts and renders void what would otherwise have been a valid and effective appointment. There is never any valid and effective appointment. As a result, the company concerned never becomes subject to the particular form of external administration.

54 It is necessary to add, having regard to another part of Mr Hyde’s submissions, that the particular provision of State law that makes void a receiver appointment effected by a holder of security in exercise of a power of appointment conferred by the security is in no way inconsistent with any provision of the Corporations Act. As it applies to an appointment of that kind, s 418A(2) of the Corporations Act has in contemplation invalidity of any kind arising at general law or by operation of some statutory provision, whether State or Federal.

55 I should say in conclusion that, although I indicated in the course of ruling on objections to affidavits that I did not consider relevant Mr Constantinidis’s statements as to his intentions and plans for the two companies at the time of the borrowings in early 2008, I had not then focussed sufficiently on the need to discover the purposes for which each company incurred the borrowing from Equititrust. I therefore ultimately had regard to Mr Constantinidis’s statements, as already mentioned, he being the sole director of each company.

56 In the result, however, the proceedings are dismissed with costs for the reasons I have stated.

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LAST UPDATED:
20 April 2010