Beachmount Pty Ltd v Iker Partnership

Case [2020] QSC 379

SUPREME COURT OF QUEENSLAND

CITATION:

Beachmount Pty Ltd v Iker Partnership & Anor [2020] QSC 379

PARTIES:

BEACHMOUNT PTY LTD
ACN 088 946 801

(plaintiff)

v
IKER PARTNERSHIP

(first defendant)

EUNEEKE CATTLE COMPANY PTY LTD
ACN 112 009 097

(second defendant)

FILE NO/S:

BS No 8370 of 2017

DIVISION:

Trial Division

PROCEEDING:

Claim

ORIGINATING COURT:

Supreme Court of Queensland at Brisbane

DELIVERED ON:

16 December 2020

DELIVERED AT:

Brisbane

HEARING DATE:

27 July 2020 to 31 July 2020; 4 September 2020

JUDGE:

Williams J

ORDER:

1.   I direct that, by 10:00 am on 17 December 2020, the parties agree and provide to my Associate a proposed timetable in relation to the following:

(a)      The parties prepare draft orders to give effect to these reasons and provide them to my Associate.

(b)      If the parties are unable to agree on draft orders, then each party is to provide its proposed draft orders together with a brief description for the basis of the disagreement.

(c)      The plaintiff file and serve submissions and any supporting affidavits in relation to costs.

(d)      The defendants file and serve submissions and any supporting affidavits in relation to costs.

(e)      The plaintiff file and serve submissions in reply in relation to costs. 

CATCHWORDS:

CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – DISCHARGE, BREACH AND DEFENCES TO ACTION FOR BREACH – CONDITIONS – GENERAL MATTERS – where the plaintiff alleges that the defendants, in breach of two agreements entered into between the parties (the ESA and the New Agreement), failed to pay the plaintiff $810,460.49 for provision of services under those agreements – whether the  defendants are indebted to the plaintiff for that amount

CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – FORMATION OF CONTRACTUAL RELATIONS – MATTERS NOT GIVING RISE TO BINDING CONTRACT – VAGUENESS AND UNCERTAINTY – UNCERTAIN PROMISES – where the defendants allege that the terms of the ESA did not define with precision the ‘services’ the plaintiff was required to perform to the extent that the ESA is too uncertain to be enforceable – where the defendants further allege that the terms relating to the remuneration of the plaintiff under the ESA are uncertain to the extent that the ESA is too uncertain to be enforceable – where payments were made to the plaintiff by the defendants pursuant to the ESA on a regular basis – where the defendants do not seek to recover those amounts – whether the ESA is void for uncertainty

CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – FORMATION OF CONTRACTUAL RELATIONS – CONTRACTS IMPLIED FROM CONDUCT OF PARTIES – where the plaintiff alleges that the ESA ended by mutual agreement and the parties entered into another agreement (New Agreement) on similar terms – where the plaintiff continued to perform services for the defendants – where the defendants submit that there was no New Agreement but rather that the plaintiff was engaged on a “temporary basis” following the expiry of the ESA – whether the parties entered into the New Agreement – whether…

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AGLC
Beachmount Pty Ltd v Iker Partnership [2020] QSC 379
Case
[2020] QSC 379
Decision Date

CaseChat Overview and Summary

In the Federal Court of Australia, Beachmount Pty Ltd brought an action against the Iker Partnership and Euneeke Cattle Company Pty Ltd, seeking payment of $810,460.49 for services rendered under two agreements. The legal issues before the Court were whether the Iker Partnership owed Beachmount Pty Ltd the amount claimed, whether the agreements were void for uncertainty, and whether Beachmount Pty Ltd was estopped from enforcing the agreements due to alleged misrepresentations. The Court had to consider whether the terms of the agreements were certain enough to be enforceable, whether the agreements were terminated by mutual consent and replaced with a new agreement, and whether Beachmount Pty Ltd made any misleading or deceptive representations to the Iker Partnership. The Court also considered whether the Iker Partnership had relied on any such representations to their detriment, and whether the limitation period for pursuing a claim for misleading or deceptive conduct had expired.

The Court found that the Iker Partnership was not indebted to Beachmount Pty Ltd for the amount claimed, as the agreements were either void for uncertainty or had been discharged by mutual agreement. The Court found that the terms of the agreements were not sufficiently certain to be enforceable, as the services to be provided and the remuneration were not clearly defined. The Court also found that the Iker Partnership was not estopped from enforcing the agreements, as there was no evidence of any misleading or deceptive representations made by Beachmount Pty Ltd. The Court found that the Iker Partnership had not relied on any such representations to their detriment, and that the limitation period for pursuing a claim for misleading or deceptive conduct had expired.

The Court ordered that the parties agree on a proposed timetable for preparing draft orders, filing and serving submissions and affidavits in relation to costs, and providing any proposed draft orders together with a brief description for the basis of the disagreement. The Court directed that the parties file and serve their submissions and affidavits in relation to costs by a specified date.

In summary, the Court found in favour of the Iker Partnership and Euneeke Cattle Company Pty Ltd, and dismissed Beachmount Pty Ltd's claim for payment. The Court found that the agreements were either void for uncertainty or had been discharged by mutual agreement, and that the Iker Partnership was not estopped from enforcing the agreements due to any alleged misrepresentations made by Beachmount Pty Ltd. The Court also found that the limitation period for pursuing a claim for misleading or deceptive conduct had expired.

Orders

Orders of the court

1. I direct that, by 10:00 am on 17 December 2020, the parties agree and provide to my Associate a proposed timetable in relation to the following:

(a) The parties prepare draft orders to give effect to these reasons and provide them to my Associate.

(b) If the parties are unable to agree on draft orders, then each party is to provide its proposed draft orders together with a brief description for the basis of the disagreement.

(c) The plaintiff file and serve submissions and any supporting affidavits in relation to costs.

(d) The defendants file and serve submissions and any supporting affidavits in relation to costs.

(e) The plaintiff file and serve submissions in reply in relation to costs.

Background

Background to the litigation

In respect of the third agreed fact, from submissions at the trial it appears that while the defendants admit that the payments were made, they do not admit the basis of the payments. This is to be read subject to [41(c)(ii)(A)] and [45] of the 4FA Defence.The parties and background The plaintiff, Beachmount Pty Ltd, was the corporate vehicle for Peter Queitzsch (Mr Queitzsch), who is the sole director and authorised representative of the plaintiff. The first defendant is a partnership between Edward Alexander Iker (Mr Lex Iker), Jo-Anne Iker and Iker Pty Ltd as trustee for the Iker Family Trust. The second defendant, Euneeke Cattle Company Pty Ltd, has Mr Lex Iker and Jo‑Anne Iker as its directors. Mr Lex Iker and Jo-Anne Iker have two sons, Clayton and Trent. Clayton Iker is married to Chrystal Iker. Trent Iker is married to Chantal Iker. The Iker family have various entities, incorporated and unincorporated, through which they operate agricultural interests in and around Emerald. Ikerus Pty Ltd (Ikerus) owned a property situated at Sullivan Street, Emerald, referred to as “Stay on Sullivan” (SOS) which operated as a motel or accommodation for mine workers. Ikerus was trustee for the Ikerus Unit Trust and was controlled by Mr Lex Iker and Jo-Anne Iker, who held 49 percent of the units. There were also other unit holders. TLD Qld Pty Ltd (TLD) was another company that owned the adjoining property to SOS which was also being developed as mine worker accommodation. Mr Lex Iker was a director of TLD. There were also other parties who owned units in the TLD Qld Unit Trust. At the hearing, the following witnesses gave evidence:(a)For the plaintiff:(i)Mr Queitzsch;(ii)Ms Leanne Daniels (former group administrative manager of the Iker Group).(b)For the defendants:(i)Mr Lex Iker;(ii)Mrs Chrystal Iker;(iii)Mr Clayton Iker;(iv)Ms Susan Williamson (bookkeeper for the Iker Group from 3 August 2015). Mr Christopher Todd provided a witness summary of evidence on behalf of the defendants, but ultimately was not called to give evidence.Agreed trial bundle Exhibit 1 is the agreed trial bundle which consists of three lever arch folders. At the conclusion of the trial, the parties prepared a revised agreed index to Exhibit 1 reflecting the documents which had gone into evidence through the various witnesses. This resulted in some documents being removed. Two documents were disputed, namely:(a)Tab 154 – Iker Group board meeting minutes 10 September 2015;(b)Tab 155 – Iker Group board meeting minutes 12 November 2015. The plaintiff says that these two documents are admissible on the basis of the unchallenged evidence of Leanne Daniels that the minutes she prepared were accurate.[4] Further the plaintiff contends that they are in substantially the same form as the board meeting notes at Tab 153, to which significant reference was made at the hearing and are agreed to be in evidence. Further, the plaintiff submits that the defendants do not contend that the minutes are wrong or inaccurate.[4]Plaintiff’s written closing submissions at [139].

Evidence

Evidence Before The Court

Mr Queitzsch and Mr Lex Iker agreed that Mr Queitzsch did not tell Mr Lex Iker about PRD Noosa Pty Ltd or Apex AM Pty Ltd, which were wound up in 2009 and 2012 respectively.[29] Mr Lex Iker stated that, had he been told that at the time, he would not have engaged Mr Queitzsch.[30] However, Mr Lex Iker also gave evidence that, sometime in early 2014, Mr Queitzsch told him about one of the businesses, and explained that it was “over the GFC”. Mr Lex Iker accepted that explanation from Mr Queitzsch at the time.[31] [29]T 2-85 L 43-46; T 4-42 L 40-45 and T 4-43 L 1-2. [30]T 4-43 L 7. [31]T 4-57 L 30-31. On the evidence, it is unclear precisely which business Mr Queitzsch told Mr Lex Iker about in early 2014. If the business was affected by the GFC, then it is likely that it was the PRD Noosa Pty Ltd business that was wound up in 2009. Other evidence The proposal for the CA provided by email on 27 September 2013 (CA Proposal) contains a statement in relation to Mr Queitzsch’s experience. It states as follows:“Peter Queitzsch will direct the project. He has 25 years commercial experience in Agribusiness having held several senior and executive management positions with Elders Limited. His time at Elders included over 5 years as state finance manager. Since leaving Elders he undertook several consulting projects and has been actively involved in a number [of] commercial property based enterprises for the past 12 years. He holds a Graduate Diploma in Business, Masters in Business Administration, Certified Practising Real Estate Agent and is a Justice of the Peace.”[32][32]Court Book tab 226 page 1211. The Proposal dated 20 November 2013 which preceded the ESA (ESA Proposal) contains a statement of qualifications in substantially the same form.[33][33]Court Book tab 227 page 1216. This is also largely consistent with the evidence of Mr Lex Iker as to his recollection of what Mr Queitzsch told him about his experience.[34][34]T 4-40 L 1-5; T 4-40 L 32-37.Consideration While the statements of experience as set out in [9(a), (b) and (c)] of the 4FA Defence were made, I do not find that the “implied representation” as set out in [9(d)] of the 4FA Defence was made. Given the specific nature of the statements of experience and the evidence at the trial, I consider that the representation as pleaded has not been established. The implied representation purports to imply a specific link to the tasks to be undertaken: that is, the sale of SOS and the “Iker goals”. As will be further discussed below, I find that the overall evidence does not support that position.[35]SOS sale representation[35]See discussion in paragraphs following in relation to the SOS sale representation.Oral evidence The oral evidence outlined at paragraphs [36] to [39] above is also relevant background to the consideration of the SOS sale representation. Mr Lex Iker gave evidence of two key statements he said were made at the Vandyke meeting. First, that Mr Queitzsch said that “[Mr Queitzsch] thought that he may have a potential buyer and that he believed that … he could sell [SOS] in three to six months.”[36] Second, he said that he told Mr Queitzsch that they wanted to sell SOS soon to relieve their financial pressure.[37] This, according to the defendants’ counsel, was the “SOS sale representation”, and the context in which it was made. [36]T 4-40 L 10-13. [37]T 4-40 L 15-22.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Jo-Anne Iker was not called as a witness by the defendants and the plaintiff submits that the Court is entitled to assume that nothing she would say would have assisted the defendants in accordance with Jones v Dunkel.[44][44](1959) 101 CLR 298.Consideration The defendants submit at paragraph 109 of the written submissions as follows:“Furthermore, it is likely that the plaintiff made the SOS sale representation, including the timing of selling SOS given the importance of the timing to Lex as a result of the financial concerns he was then under, and because he was intent on getting out of SOS to free up finance to ease those concerns and relieve the Iker group agribusiness meeting the debts of Ikerus and TLD.” (Emphasis added) This submission on behalf of the defendants seems to focus on the motivations of the defendants, particularly Mr Lex Iker, rather than the actual evidence of whether the representations were made. The SOS sale representation as pleaded in [10] of the 4FA Defence is in some respects quite specific but at the same time lacks precision. For example, at the time that the alleged representation was made, Mr Queitzsch was not engaged by the Iker Family and Entities in relation to other projects. [10(d)(i) and (ii)] of the 4FA Defence state the implied representations to be:(a)he would be able to sell SOS within three to six months;(b)he would in any event sell SOS as a priority to anything else he had to do. Further, the lack of precision in relation to the SOS sale representation is amplified as the various parts of the SOS sale representation are not clearly established by the oral evidence. For example, the plaintiff refers to the evidence of Mr Lex Iker in relation to the timing of any sale of SOS as follows:“He said that he thought that he may have a potential buyer and that he believed that ‒ when I questioned him, he believed he could sell it in three to six months.”[45][45]T 4-40 L 10-15. The plaintiff submits that this is not evidence that Mr Queitzsch said he would sell SOS “as a priority to any other matter”. Nor is it evidence that he said he was certain that he would sell SOS in three to six months. The difficulties in respect of the oral evidence relating to this representation is compounded by the documentary evidence. The alleged SOS sale representation is not supported by any contemporaneous documents and is in fact contrary to the agreements signed by the parties. The CA Proposal makes no reference to the matters pleaded in [7], [8] or [10] of the 4FA Defence. The CA Proposal outlined the development of a strategy in respect of SOS and the adjoining property, TLD. Further, at the first bullet point on page 1209 of the trial bundle, the CA Proposal expressly states:“[The partners in Ikerus and TLD’s] preference is to lower their exposure and passively hold the investment going forward.” This is in stark contrast to a sale of the freehold title in SOS, consistent with the SOS sale representation.