Connway Pty Ltd v Mitchell [2022] NSWDC 30

District Court New South Wales

Medium Neutral Citation: Connway Pty Ltd v Mitchell [2022] NSWDC 30 Hearing dates: 13 and 14 December 2021 Date of orders: 14 February 2022 Decision date: 14 February 2022 Jurisdiction: Civil Before: Grant DCJ Decision: 1. Judgment in the sum of $112,277.89. 2. The defendant to pay the plaintiff's costs. 3. Interest on the claim. 4. Grant liberty to apply in regard to the costs. Catchwords: CONTRACT – contracting parties – personal liability – limitation of actions – settlement of contract – whether personal loan or company loan – personal agreement Legislation Cited: Limitation Act 1969 (NSW) Category: Principal judgment Parties: Connway Pty Ltd (First Plaintiff) Christopher Baldwin (Second Plaintiff) Tim Mitchell (Defendant) Representation: Counsel: Mr J Stavris (First & Second Plaintiffs) Ms A Hando (Defendant)

Solicitors: Oceania Lawyers & Consultants (First & Second Plaintiffs) Harwood Andrews (Defendant) File Number(s): 2020/00141502 Publication restriction: Nil

Judgment

BACKGROUND 1. The defendant was a director of Southern Civil (Southern), a company which engaged in earthworks. The company owned a Bobcat and an excavator. The company had a tax liability to the Australian Taxation Office. The ATO had issued wind-up notices upon the company. It also had issued director notices to Mr Mitchell. 2. The plaintiff (Christopher Baldwin) is an accountant. He provides accounting services through Connway Pty Ltd. Accounting services were provided to the defendant and Southern Civil. In an attempt to relieve company tax liabilities, the plaintiff suggested a scheme. The scheme involved the sale of the Bobcat and excavator at an inflated price to the plaintiff. The defendant was to obtain false inflated valuations. The plaintiff used these valuations to obtain chattel mortgages from two financial institutions, namely ANZ Bank and Macquarie Bank. The equipment would remain with Southern for use. 3. The term of the chattel mortgages was five years. The plaintiff paid all moneys due under the chattel mortgages. The advance made by the plaintiff to the defendant was to be paid in four years. The advance moneys were used to pay down the ATO debt in an endeavour to avoid Southern being wound up and to satisfy ATO notices served on Mr Mitchell as a director of the company. The advance moneys have not been fully repaid. Southern was liquidated by the Australian Taxation Office. 4. The plaintiff asserts that he had two agreements personally with Tim Mitchell and Mitchell has not fulfilled those agreements, resulting in loss. The defendant says the agreements were not with him, but, rather, with Southern, and it was Southern who has failed to fulfil the agreements. The issue for determination is who the contracting parties were.