Bodhi Space No 2 Trust v Grochau - [2011] QDC 59

[2011] QDC 59

DISTRICT COURT

CIVIL JURISDICTION

JUDGE ROBIN QC

No 155 of 2009

BODHI SPACE NO. 2 TRUST	Plaintiff
and
JASMINE MAY GROCHAU and PAUL SHEEP INVESTMENTS PTY LTD	Defendants

BRISBANE

..DATE 31/03/2011

JUDGMENT

CATCHWORDS

Uniform Civil Procedure Rules r 292, r 293

Cross-applications by plaintiff and defendants for summary judgement - plaintiff successful - parties' deed held to require payment on dates stipulated for particular amounts aggregating $140,000, which was taken to be the relevant debt on dissolution of a partnership - payments to be made albeit on a provisional basis pending recourse to processes for raising and resolving dispute as to correctness of the $140,000 - no outcome from such processes to date

HIS HONOUR: There are cross applications before the court, one by the plaintiff seeking summary judgment under rule 292, the other by the defendants seeking judgment under rule 293.

The latter application I would construe as a tactical response to the other. It certainly hasn't been demonstrated that the plaintiff presents a claim so devoid of prospects of success it ought to be dismissed without a trial on the merits.

The plaintiff and the defendants on the otherside were in partnership, operating a business of health and fitness centres with premises in Brisbane and the Gold Coast which ran satisfactorily for some years until unhappy differences led to a separation which involved a distribution of the premises and the businesses conducted in them: one to the plaintiff, the other to the defendants' side.

There were disagreements in relation to sorting out accounts. These were resolved by a deed of agreement, the parties to which were the plaintiff company and the defendant company, also the first defendant and Mr Paul Christopher Shepherd, who stands behind the plaintiff. That deed of agreement, which is before the court, was executed some time in November 2008.

It deals with the issues of present concern in paragraph 21, which notes that the plaintiff and/or Mr Shepherd had made financial accommodation available to the partnership and to Ms Grochau that Williams and Partners, the partnership accountants, had produced draft partnership accounts quantifying the difference in partnership payments as a "Debt" of $304,900 owing to the plaintiff.

The clause goes on, and I quote:

“21.3. For the purposes of this Deed, the Debt is to be reduced to $140,000.

“21.4. Bodhi Space and Jasmine are entitled, at their own expense, to engage an accountant (Nominee Accountant) to review the Draft Partnership Accounts and all documentation of the partnership used to compile such accounts to verify the Debt.

“21.5. Any such review of accounts and any dispute arising therefrom is to be completed and/or raised, as the case may be, by 31 January 2009.

“21.6. Where a difference is material (i.e. the amount payable herein under clause 21.3 may be less than the Debt), the nominee accountant and Williams and Partners are to confer to resolve any difference which will become the new Debt figure. This does not delay or negate the…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2011] QDC 59
Decision Date: 31/03/2011

CaseChat Overview and Summary

The District Court was presented with cross-applications for summary judgment from both the Bodhi Space No. 2 Trust, the plaintiff, and the defendants, Jasmine May Grochau and Paul Sheep Investments Pty Ltd. The dispute arose from a partnership dissolution and the subsequent agreement on the settlement of debts. The plaintiff sought payment of $140,000 as per their agreement, while the defendants argued that no payment was due until the debt's exact amount was determined. The central legal issue was whether the defendants were required to make payments as stipulated in the deed or if such payments were contingent on a final determination of the debt's amount. The court had to interpret the agreement and decide whether the defendants' obligation to pay was immediate or deferred until the debt was precisely quantified.

The court held that the defendants were indeed obliged to make the payments as per the agreement, despite the ongoing dispute over the exact amount of the debt. The reasoning hinged on the interpretation of the deed's clause 21.6, which mandated payments regardless of any differences in the accountants' assessments. The court found that the second sentence of clause 21.6 committed the defendants to making payments, and any dispute over the debt's amount would not absolve them from this obligation. The court compared this situation to cases under the Building and Construction Industry Payments Act 2004 and other analogous contractual provisions, which also required provisional payments with disputes over the exact amount to be resolved later. Therefore, the plaintiff was entitled to the payments as per the agreement, albeit on a provisional basis pending a final resolution of the debt's amount.

The court granted summary judgment in favour of the plaintiff, ordering the defendants to make the payments stipulated in the deed. The judgment allowed the plaintiff to recover indemnity costs for the successful application and standard costs for the dismissal of the defendants' cross-application. This decision underscored the principle that contractual obligations to make payments are not contingent on the final determination of the exact debt amount, provided the agreement clearly mandates such payments.

Orders