Allen's Asphalt Pty Ltd v Kelleher

DISTRICT COURT OF QUEENSLAND

CITATION:

Allen’s Asphalt Pty Ltd v Kelleher [2010] QDC 444

PARTIES:

Allen’s Asphalt Pty Ltd

(Plaintiff/Applicant)

v

Damien Francis Kelleher

(Defendant/Respondent)

FILE NO/S:

BD 400 of 2010

DIVISION:

Civil

PROCEEDING:

Application

ORIGINATING COURT:

District Court

DELIVERED ON:

19 November 2010

DELIVERED AT:

Brisbane

HEARING DATE:

23 June 2010

JUDGE:

Devereaux SC

ORDER:

1.   Application for judgment is dismissed

2.   I will hear the parties as to further orders

CATCHWORDS:

CONTRACTS: SPECIFIC – GUARANTEES – LIABILITY OF GUARANTOR – where guarantor pleads set off of principal debtor’s claim for damages against plaintiff’s claim of debt for unpaid work - where principal debtor under administration – whether the defendant has no reasonable prospects of success.

COUNSEL:

Mr G D Beacham for the applicant

Mr C A Wilkins for the applicant

SOLICITORS:

James Conomos Lawyers for the applicant

Bennet and Philp Lawyers for the respondent

1. The plaintiff applies for judgment under UCPR rule 292. There is no contest, on the pleadings, that the claim is made out. What is in issue is whether the defendant has a valid set off sufficient to resist the application for judgment.

2. The claim is brought against the defendant pursuant to a guarantee and indemnity agreement. The defendant was the director of Kelleher Group Civil Pty Ltd (KGC). On 27 August 2009, KGC entered into a credit agreement with the plaintiff.  On the same day, the defendant guaranteed payment to the plaintiff of all moneys due to the plaintiff by KGC. The guarantee included the following:

1. I will indemnify the Supplier against any losses, costs, charges and expenses of any nature, which it might incur as a result of any default by the Customer or arising under this Guarantee.

2. I will also be responsible to the Supplier for all outstanding monies due now or at any time in the future for Goods supplied by the Supplier to the Customer from time to time.[1]

[1] Statement of Claim paragraph 3

3. The plaintiff supplied goods (a term defined to include services) and claims, from the defendant, an amount for the goods plus other amounts payable under the agreement between the plaintiff and KGC, namely $136,863.89.

4. The set-off is pleaded as follows.  In or about April 2009, a company called Queensland Civil Services Pty Ltd (QCS) contracted with another company, Beech Constructions Pty Ltd (Beech) to reconstruct a car park at a shopping centre. QCS engaged KGS to ‘enter into the necessary contracts with third parties to complete the work required by’[2] Beech. In August 2009, the plaintiff supplied a quotation for certain works on the car park.  KGC accepted the plaintiff’s quote on the basis that the plaintiff would complete the first part of the work by 17 September and the second part by 25 October. The plaintiff completed phases 1 and 2 but not within those times. The plaintiff’s work in those phases and phase 3 was of poor quality. Because of ‘the failure by the plaintiff to complete [phases 1 and 2] by the…