CFI Rentals Pty Ltd v Roussos - [2017] QCA 308

SUPREME COURT OF QUEENSLAND

CITATION:

CFI Rentals Pty Ltd v Roussos & Anor [2017] QCA 308

PARTIES:

CFI RENTALS PTY LTD
ACN 166 603 578
(appellant)
v
MICHAEL IVON ROUSSOS
(first respondent)
JULIA KATHERINE GARDINER
(second respondent)

FILE NO/S:

Appeal No 5951 of 2017
DC No 4837 of 2016

DIVISION:

Court of Appeal

PROCEEDING:

General Civil Appeal
Application to adduce further evidence

ORIGINATING COURT:

District Court at Brisbane – [2017] QDC 128 (Farr SC DCJ)

DELIVERED ON:

15 December 2017

DELIVERED AT:

Brisbane

HEARING DATE:

1 November 2017

JUDGES:

Fraser and Philippides and McMurdo JJA

ORDERS:

1.   The appeal is allowed.

2.   The orders made on 17 May 2017 are set aside.

3.   The costs of the hearing below are reserved.

4.   The respondents are to pay the appellant’s costs of the appeal.

5.   The respondents are granted a certificate under the Appeal Costs Fund Act 1974 (Qld) confined to the costs payable by the respondents to the appellant as the costs of the appeal.

CATCHWORDS:

GUARANTEE AND INDEMNITY – ACTIONS AGAINST SURETY – GENERALLY – OTHER CASES – where the appellant and the first respondent entered into a guarantee in relation to a lease and an associated loan agreement – where the first and second respondents were joint tenants and tenants in common over two parcels of land – where the appellant alleged that the first respondent was in default and sought a declaration that it held an equitable charge over the first respondent’s interest in the land – where the primary judge found that it was a necessary precondition for the creation of an equitable charge that a demand had been made – where the primary judge found that no demand had been made – where the respondents had not sought an order dismissing the originating application – whether there was a denial of procedural fairness – whether the primary judge erred in dismissing the originating application on the basis that no demand had been made

GUARANTEE AND INDEMNITY – ACTIONS AGAINST SURETY – GENERALLY – OTHER CASES – where the respondents contended that circumstances arose following the making of orders by the primary judge which justified the dismissal of the originating application – where the first respondent sought leave to adduce affidavit evidence that he had been served with New South Wales District Court proceedings in the name of a different company but which related to the guarantee – where those proceedings were discontinued within weeks after service – where the parties assumed that the guarantee and loan agreement were entered into with the actual authority of that other company as an undisclosed principal – whether the commencement of the other proceedings by the company to enforce its rights as an undisclosed principal amounted to an election that permanently brought to an end the rights of the appellant to prosecute its appeal – whether the respondents were prejudiced by the existence of two proceedings against them

Appeal Costs Fund Act 1973 (Qld), s 15

Atkinson v Cotesworth

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: [2017] QCA 308
Decision Date: 15 December 2017

CaseChat Overview and Summary

CFI Rentals Pty Ltd, the appellant, brought an action against Roussos, the first respondent, and others, seeking a declaration that it held an equitable charge over the first respondent’s interest in two parcels of land. The dispute arose from a guarantee and an associated loan agreement, which the parties entered into. The first and second respondents were joint tenants and tenants in common over the land. The appellant argued that the first respondent was in default, and thus sought the declaration. The case was heard in the Queensland Court of Appeal.

The legal issues the court had to address were whether the primary judge correctly found that a demand was a necessary precondition for the creation of an equitable charge, and whether the primary judge erred in dismissing the originating application on this basis. The court also needed to consider whether there was a denial of procedural fairness and whether the respondents were prejudiced by the existence of two proceedings against them. Additionally, the court had to determine whether the first respondent’s service of New South Wales District Court proceedings, which related to the guarantee, amounted to an election that permanently brought to an end the rights of the appellant to prosecute its appeal.

The Court of Appeal held that the primary judge erred in finding that a demand was a necessary precondition for the creation of an equitable charge. The court found that the primary judge did not consider relevant authorities that showed a demand was not always required. The court also found that the primary judge did not consider the possibility of an equitable charge arising from the conduct of the parties. The Court of Appeal found that the primary judge did not consider the evidence of the New South Wales District Court proceedings, and that the respondents were not prejudiced by the existence of two proceedings against them. The court found that the first respondent’s service of New South Wales District Court proceedings did not amount to an election that permanently brought to an end the rights of the appellant to prosecute its appeal. The appeal was allowed, and the orders made on 17 May 2017 were set aside. The respondents were to pay the appellant’s costs of the appeal, and were granted a certificate under the Appeal Costs Fund Act 1974 (Qld) confined to the costs payable by the respondents to the appellant as the costs of the appeal.

Orders

Orders of the court

1. The appeal is allowed.

2. The orders made on 17 May 2017 are set aside.

3. The costs of the hearing below are reserved.

4. The respondents are to pay the appellant’s costs of the appeal.

5. The respondents are granted a certificate under the Appeal Costs Fund Act 1974 (Qld) confined to the costs payable by the respondents to the appellant as the costs of the appeal.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	CFI Rentals Pty Ltd v Roussos & Anor [2017] QCA 308
PARTIES:	CFI RENTALS PTY LTD ACN 166 603 578 (appellant) v MICHAEL IVON ROUSSOS (first respondent) JULIA KATHERINE GARDINER (second respondent)
FILE NO/S:	Appeal No 5951 of 2017 DC No 4837 of 2016
DIVISION:	Court of Appeal
PROCEEDING:	General Civil Appeal Application to adduce further evidence
ORIGINATING COURT:	District Court at Brisbane – [2017] QDC 128 (Farr SC DCJ)
DELIVERED ON:	15 December 2017
DELIVERED AT:	Brisbane
HEARING DATE:	1 November 2017
JUDGES:	Fraser and Philippides and McMurdo JJA
ORDERS:	1. The appeal is allowed. 2. The orders made on 17 May 2017 are set aside. 3. The costs of the hearing below are reserved. 4. The respondents are to pay the appellant’s costs of the appeal. 5. The respondents are granted a certificate under the *Appeal Costs Fund Act* 1974 (Qld) confined to the costs payable by the respondents to the appellant as the costs of the appeal.
CATCHWORDS:	GUARANTEE AND INDEMNITY – ACTIONS AGAINST SURETY – GENERALLY – OTHER CASES – where the appellant and the first respondent entered into a guarantee in relation to a lease and an associated loan agreement – where the first and second respondents were joint tenants and tenants in common over two parcels of land – where the appellant alleged that the first respondent was in default and sought a declaration that it held an equitable charge over the first respondent’s interest in the land – where the primary judge found that it was a necessary precondition for the creation of an equitable charge that a demand had been made – where the primary judge found that no demand had been made – where the respondents had not sought an order dismissing the originating application – whether there was a denial of procedural fairness – whether the primary judge erred in dismissing the originating application on the basis that no demand had been made GUARANTEE AND INDEMNITY – ACTIONS AGAINST SURETY – GENERALLY – OTHER CASES – where the respondents contended that circumstances arose following the making of orders by the primary judge which justified the dismissal of the originating application – where the first respondent sought leave to adduce affidavit evidence that he had been served with New South Wales District Court proceedings in the name of a different company but which related to the guarantee – where those proceedings were discontinued within weeks after service – where the parties assumed that the guarantee and loan agreement were entered into with the actual authority of that other company as an undisclosed principal – whether the commencement of the other proceedings by the company to enforce its rights as an undisclosed principal amounted to an election that permanently brought to an end the rights of the appellant to prosecute its appeal – whether the respondents were prejudiced by the existence of two proceedings against them Appeal Costs Fund Act 1973 (Qld), s 15 Atkinson v Cotesworth