Brian Fletcher as Trustee for the Brian Fletcher Family Trust v Hooper - [2004] WASC 27

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: BRIAN FLETCHER as Trustee for the BRIAN FLETCHER FAMILY TRUST -v- HOOPER & ANOR [2004] WASC 27

CORAM: MASTER SANDERSON

HEARD: 24 FEBRUARY 2004

DELIVERED : 3 MARCH 2004

FILE NO/S: CIV 2504 of 2003

BETWEEN: BRIAN FLETCHER as Trustee for the BRIAN FLETCHER FAMILY TRUST
Plaintiff
AND
JOHN HENRY HOOPER
First Defendant
LOIS HOOPER
Second Defendant

Catchwords:

Practice and procedure - Application for summary judgment - Turns on own facts

Legislation:

Nil

Result:

Application dimissed

Category: B

Representation:

Counsel:

Plaintiff:     Mr C P Stokes
First Defendant             :     Mr I A Morison
Second Defendant         :     Mr I A Morison

Solicitors:

Plaintiff:     Chris Stokes & Associates
First Defendant             :     Williams & Co
Second Defendant         :     Williams & Co

Case(s) referred to in judgment(s):

Foskett v McKeown [2001] 1 AC 102
Moscow Narodny Bank Ltd v Mosbert Finance (Aust) Pty Ltd [1976] WAR 109
Wallingford v Mutual Society (1880) 5 App Cas 685
Webster v Lampard (1993) 177 CLR 598

Case(s) also cited:

Fletcher & Baysilk v Ould [2003] WASC 226

MASTER SANDERSON: This is the plaintiff's application for summary judgment. The application is supported by an affidavit of Brian Fletcher (Mr Fletcher), sworn 21 January 2004. The affidavit verifies the statement of claim and states that Mr Fletcher believes the defendants have no defence to the claim. The affidavits satisfies the requirements of O 14 r 2(1). For their part, the defendants have filed no affidavit in opposition to the summary judgment application. They make two submissions. First, they say that the statement of claim is defective, does not properly plead a cause of action and should be struck out. On that basis, summary judgment, it is said, ought not be granted. They further argued that even if the statement of claim is not struck out, the way the claim is pleaded discloses that there are issues which should properly go on to trial.
It is convenient to begin with the statement of claim. By par 1 it is pleaded that in or about March 1996 the plaintiff and the defendant orally agreed that they would purchase a motor launch which is defined in the pleading (par 1.1) as "the Vessel". It is pleaded that the agreement was that they would contribute equally to the purchase price of the Vessel. Certain other express terms are pleaded. Particulars of the agreement are provided, which detail a number of conversations which are said to have given rise to the oral agreement. There is no doubt that par 1 does not comply strictly with the principles applicable to pleading of oral agreements. The dates and places where the conversations, which are said to give rise to the oral agreement, took place are material facts. They are not properly to be regarded as particulars. Having said that, if the heading "Particulars" in par 1, the statement of claim is ignored, the paragraph could not be regarded as so offensive as to warrant it being struck out. In fact, the defendants made no complaint about par 1, indicating they knew what was put against them. The defects in the paragraph can then be put to one side.
By par 2 it is pleaded that the first defendant did certain things pursuant to the agreement between the parties. In particular, it is alleged by par 2.2 that the plaintiff, at the direction of the first defendant, made a payment of an amount of $118,000 to a company styled Ould Pty Ltd ("Ould"). It is said that Ould was to pay the money to the broker from whom the vessel was to be purchased. The particulars to par 2.2 say that three payments totalling $78,000 were made to Ould Pty Ltd in April 1996 and one payment of $40,000 was made in August 1996. The defendants have two complaints about par 2.2. First, they say that the evidence shows that the plaintiff did not make any payment to Ould Pty Ltd. Rather, it is said, that the payment was made by a company, Baysilk Holdings Pty Ltd ("Baysilk"), and it is Baysilk who is entitled to sue, not the plaintiff. In his affidavit the plaintiff says that prior to December 1996 he was the managing director of Baysilk. He also says he had a loan account with the company. He then annexes to his affidavit an affidavit of Joseph Ohayon ("Mr Ohayon"), sworn 29 August 2001. Mr Ohayon says in that affidavit that he was at one time an accountant for the business known as BC's The Body Club.
The plaintiff says that the annexures to Mr Ohayon's affidavit indicate that he did have a loan account with Baysilk and that payments made by Baysilk to Ould were debited against that loan account. In other words, it is said that Baysilk was simply a conduit for the transfer of funds, the property of the plaintiff, to Ould. On that basis it is said there is nothing amiss with the plea in par 2.2.
It is appropriate at this point to pause and say something generally about the summary judgment procedure. What is envisaged by O 14 is that a plaintiff, who is of the view that the defendant has no defence to the plaintiff's claim, should be able to obtain judgment summarily. To obtain judgment the plaintiff must file a summons and support that summons by affidavit. The affidavit must verify the facts in the statement of claim and state that in the deponent's belief, the defendant has no defence to the action. There is no requirement that the affidavit in support of the application should deal with evidence which might be led at trial to prove the pleaded material facts. Although that is commonly done, it is not what is envisaged by O 14 r 2(a). All that is required by the rule, and all that should be done by an applicant is to verify the facts in the statement of claim and state in the deponent's belief that the defendant has no defence to the action. The affidavit should, in all but the most unusual circumstance, be no more than two paragraphs. Of course, what is generally done is that a mass of evidence is contained in the affidavit in anticipation of the defendant's answer to the claim. Doubtless, plaintiffs are encouraged in that approach by O 14 r 2(2) which allows for the summons in support of the affidavit to contain hearsay material. But that does not change the simple requirements of r 2(1).
Once the plaintiff has complied with O 14 r 2, it is up to the defendant to establish that there is an issue in dispute which ought to be tried: r 3(1). In other words, the evidentiary onus - not the legal onus - shifts from the plaintiff to the defendant. Furthermore, a defendant is required in outlining his defence to "condescend upon particulars": see Moscow Narodny Bank Ltd v Mosbert Finance (Aust) Pty Ltd [1976] WAR 109 per Brinsden J at 113; Wallingford v Mutual Society (1880) 5 App Cas 685 per Lord Blackburn at 704. Unless the defendant, by evidence, establishes that there are facts which, if proved, would amount to a defence to the case, then judgment should be given for the plaintiff. Of course, judgment should only be given in the clearest of cases and the version of facts most favourable to the defendant should be presumed unless that version is inherently incredible: see Webster v Lampard (1993) 177 CLR 598 per Mason CJ, Deane and Dawson JJ at 604 ‑ 605.
This case can be resolved by asking what defence the defendants might offer to par 2.2 of the statement of claim. The answer is that they may well plead that the $118,000 said to be the plaintiff's property was in fact the property of Baysilk. Proper pleading practice would have them particularise the pleaded material fact, but it would be perfectly proper for them to say that particulars would be provided after discovery. Such a plea would not be susceptible to being struck out. The evidence which is particularly in the hands of the plaintiff, would need to be examined as part of a resolution of the issues between the parties.
Once that point is reached, the application for summary judgment must fail. That is not to say, however, that par 2.2 ought be struck out. In my view it can stand. No doubt if the plea I have anticipated is made by the defendants in their defence, the reply will plead material facts upon which the plaintiff says that the $118,000 is his. But as matters stand at the moment, I would need to examine the facts set out in Mr Ohayan's affidavit annexed to the plaintiff's affidavit and determine that what the plaintiff says is true and correct. That is beyond the scope of a summary judgment application.
Having reached that conclusion I should say no more. However, the defendant did approach this matter on the basis that the statement of claim was defective and that par 2.2, 3, 5 and 8 should be struck out. For reasons which I have indicated I would not strike out par 2.2. However, it may be convenient to deal at this point with the defendant's objections to the other paragraphs of the statement of claim.
By par 3 the plaintiff pleads that by reason of his contribution to a company controlled by the first defendant, the first defendant owed certain fiduciary obligations to the plaintiff. There can be no doubt that a trust arises as between the plaintiff and Ould, once the plaintiff paid money to the company with the intention of acquiring the vessel. Whether it can be said that such a transaction gives rise to fiduciary duties as between the plaintiff and the first defendant is more problematical. However, I would accept that the position is arguable and for that reason par 3 can stand. Having said that, it does seem that there is some tension within par 3. On the one hand it is said that the first defendant is a trustee of the money paid to Ould by the plaintiff and on the other hand, it is said that fiduciary obligations arise. It is not clear whether the fiduciary obligations are said to arise as a consequence of the first defendant being a trustee of the funds, or whether they arise independently. There is also no plea that the first defendant is liable to account to the plaintiff for the money received by Ould. In the circumstances of this case where the plaintiff seeks to recover the money paid to Ould, it might be thought that would be the main plea put against the first defendant. Accordingly, while I would not strike out par 3, it may benefit from further consideration.
The same may be said of par 5. What is alleged against the first defendant is a breach of trust and "further or in the alternative" a breach of fiduciary duty. It is not entirely clear how the matters pleaded in par 5.1 through to 5.4 amount to either a breach of trust or a breach of the pleaded fiduciary duties. By par 4 of the statement of claim it is pleaded that in August 1996 the parties agreed to terminate the contract for the purchase of the Vessel. It might then have been thought that the first defendant, as a trustee, was liable to account to the plaintiff for the money Ould had received. That is a simple straight‑forward plea and if it is established that the first defendant is indeed a trustee of the funds, the plea would be unanswerable. Once again, par 5 would benefit from reconsideration.
Paragraph 8 is the plea against the second defendant. The plaintiff alleges that after termination of the agreement and in breach of trust or in breach of his fiduciary duties, the first defendant used the funds to purchase the vessel. The vessel was registered in the name of the second defendant. Essentially, what is pleaded in par 8 is the equitable remedy of tracing: see Foskett v McKeown [2001] 1 AC 102 per Lord Millett at 127B. Paragraph 8 makes it plain what claim is put against the second defendant and I am satisfied that it is a proper plea.
In all the circumstances then, I would not strike out the plaintiff's statement of claim. However, I would repeat that it would benefit from further careful consideration and perhaps amendment. However, that is a matter for the plaintiff. The application for summary judgment will be dismissed. I will hear the parties as to costs.