Cawley v McDermott

[2005] QDC 409

DISTRICT COURT OF QUEENSLAND

CITATION:

Cawley v McDermott [2005] QDC 409

PARTIES:

JUSTINE CAWLEY

Plaintiff

and

GERARD McDERMOTT

Defendant

FILE NO/S:

326 of 2005

DIVISION:

District Court

PROCEEDING:

Application

ORIGINATING COURT:

Southport

DELIVERED ON:

15 December 2005

DELIVERED AT:

Southport

HEARING DATE:

28 November 2005

JUDGE:

Rackemann DCJ

ORDER:

The application is dismissed

CATCHWORDS:

Uniform Civil Procedure Rules r527 – orders for account

sought

Cases

Rapid Metal Developments (Aust) Pty Ltd v Rosato [1971]

Qd R 82

COUNSEL:

Mr M J Campbell for the plaintiff 

No appearance for the defendant

SOLICITORS:

Price & Roobottom solicitors for the plaintiff

No appearance for the defendant

1. The plaintiff seeks orders for an account pursuant to r 527 of the Uniform Civil Procedure Rules (UCPRs) That rule provides:

“(1) if an account is claimed in the first instance or if a claim involves taking an account, the Court may at any stage order an account to be taken;

(2) a judgment or an order directing an account to be taken must specify –

(a) the transaction or series of transactions of which the account is to  be taken;

(b) the basis of the account;  and

(c) the period of the account.”

1. In this case, the claim and statement of claim sought relief which included:

“An order for an account of interest earned on the investment and use by the defendant of the principal, for the period from 30 April 1999 to date.”

1. The subject application also sought an account in those terms.  On the hearing of the application, a draft order was proposed which also sought an account “of the use by the respondent/defendant/accounting party of the principal sum of $120,000 …”.  That would seem to go further than the relief sought in the claim and statement of claim.  There is no need to pause on that matter since, for the reasons which follow, I would not grant the relief in any event.

1. To obtain an order for an account, the applicant must establish a relationship with the defendant (the accounting party) which gives rise to the plaintiff’s entitlement for an account.  An accounting party will commonly be an agent, trustee, mortgagee or fiduciary of the plaintiff.  The plaintiff must show that moneys are passed through the defendant’s hands in circumstances where the defendant ought to account to the plaintiff[1].

   [1]For a more complete discussion of the circumstances where an account will lie, see Rapid Metal

   Developments (Aust) Pty Ltd v Rosato [1971] Qd R 82 at 88 and Equity: Doctrines and Remedies by

   RP Meagher JD Heydon MJ Lehane (4^th ed) at Ch 25.

1. The plaintiff’s statement of claim alleges that, on or about 30 April 1999, she agreed with the defendant that he should act on her behalf for the purposes of managing an investment, by her, of a sum of $120,000 for a five-year period.  The alleged terms of the agreement included that the defendant would receive and hold the principal sum for a period of five years, expiring on 30 April 2004, and would invest it on her behalf in sound financial investments for the term.  Those facts, considered in isolation, are suggestive of a relationship of the relevant kind.  Those are not however, the only terms of the agreement. 

1. As appears from paragraphs 6.4 and 6.5 of the Statement of Claim, the defendant’s obligation, on the expiry of the period, was simply to pay the plaintiff the sum of $175,000, comprising principal and interest at a particular rate.  Beyond the obligation to pay the said amount, the defendant was entitled to retain the proceeds of his use of the moneys[2].

   [2]Para 6.6 of the statement of claim

1. The statement of claim goes on to plead that:

·     By a promissory note, dated 9 November 2001, the defendant “affirmed his agreement to pay the plaintiff the maturity amount on or by 30 April 2004”;

·     In or about December 2003, the agreement was varied such that $20,000 of the principal was repaid immediately and the ‘maturity amount’ was varied to $149,944.81;

·     The defendant failed or refused to pay the varied maturity amount;

·     The defendant, by promissory note dated 28 December 2004, acknowledged his liability to pay the sum of $165,778.14, comprising the varied maturity amount and interest thereon, on or before 28 February 2005;

·     Despite demand, the defendant failed or refused to pay;

·     The plaintiff claimed the amount of $165,778.14, which was due on         28 February 2005, together with interest thereon at 9 per cent per annum.

1. The defendant did not file a notice of intention to defend and the plaintiff successfully sought judgment in default for the amount of $170,478.97 “as a debt or liquidated demand[3] together with interest.”

   [3]See the request for default judgment

1. Whatever fiduciary obligations might otherwise have been argued to exist between the plaintiff and the defendant at the time of the original agreement, the relevant obligation, which the plaintiff elected to enforce, was the defendant’s common law contractual obligation to pay a certain sum of money, by way of principal and interest, irrespective of how the moneys were invested or with what (if any) success.  That obligation did not, in my view, found a liability to account, so as to constitute the defendant an accounting party.  The plaintiff’s cause in respect of the ‘debt or liquidated demand’ has merged in the judgment, which is enforceable in the usual way.  The plaintiff seeks an account to ascertain “the whereabouts of the moneys provided to the defendant which have not been returned” in the belief that may aid recovery.  I do not consider that makes the orders sought by the plaintiff appropriate in the circumstances.

1. The application is dismissed.

- - - - -