Chinalink Asia Holdings Limited v Invitrocue Limited
[2024] WASC 263
•23 JULY 2024
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: CHINALINK ASIA HOLDINGS LIMITED -v- INVITROCUE LIMITED [2024] WASC 263
CORAM: MASTER RUSSELL
HEARD: 16 JULY 2024
DELIVERED : 23 JULY 2024
FILE NO/S: CIV 1758 of 2023
BETWEEN: CHINALINK ASIA HOLDINGS LIMITED
Plaintiff
AND
INVITROCUE LIMITED (ACN 009 366 009)
Defendant
Catchwords:
Practice and procedure - Summary judgment - Application for leave to apply for summary judgment - Application for summary judgment - Turns on own facts
Legislation:
Rules of the Supreme Court 1971 (WA), O 14 r 1, O 14 r 1(1), O 14 r 2(1), O 14 r 3
Result:
Leave to bring summary judgment application out of time refused
Application for summary judgment dismissed
Category: B
Representation:
Counsel:
| Plaintiff | : | Mr J F Park |
| Defendant | : | Mr M C Goldblatt |
Solicitors:
| Plaintiff | : | Dentons Australia Limited |
| Defendant | : | McNally & Co Litigation |
Case(s) referred to in decision(s):
Deputy Commissioner of Taxation v Lafferty [2017] WASC 257
English v Vantage Holdings Group Pty Ltd [2021] WASCA 47
Fels v Rural Bank [2020] WASCA 151
Gallo v Dawson [1990] HCA 30; (1990) 64 ALJR 458
Moscow Narodny Bank Ltd v Mosbert Finance (Aust) Pty Ltd [1976] WAR 109
Pisano v South Metropolitan Health service [2023] WASCA 80
Spencer v The Commonwealth [2010] HCA 28; (2010) 241 CLR 118
Sutton Investments Pty Ltd v Realistic Investments Pty Ltd [2017] WASCA 14
Vantage Holdings Group Pty Ltd v Donnelly [No 4] [2019] WASC 398
Wallingford v Mutual Society (1880) 5 App Cas 685
Westpac Banking Corporation v Anderson [2017] WASC 106
MASTER RUSSELL:
Introduction
The plaintiff, Chinalink Asia Holdings Limited, is a company incorporated in Hong Kong. It issued these proceedings against the defendant, Invitrocue Limited, on 14 July 2023 claiming damages and repayment of monies alleged to be due and payable in respect of loans made by the plaintiff to the defendant in 2019.
By amended chamber summons filed on 4 April 2024 (Application), the plaintiff applies for summary judgment against the defendant pursuant to O 14 r 3 of the Rules of the Supreme Court of Western Australia 1971 (WA) (RSC).
The plaintiff also applies for leave to bring the Application, as it was not made within 21 days after the defendant entered its appearance as required under RSC O 14 r 1.
For the reasons that follow, the plaintiff's application for leave to bring the Application out of time is refused and the Application is dismissed.
Submissions and evidence relied on by the parties
In support of the Application, the plaintiff relies on affidavits affirmed by Abbi Beckwith on 4 April 2024 and by Ryan Eamonn Lennon affirmed on 23 April 2024, and an outline of submissions filed on 17 May 2024.
The defendant opposes the Application and relies on an affidavit of Kathleen Marie McNally sworn on 26 April 2024, an affidavit affirmed by Maddison Ann McLauchlan on 14 May 2024, and an outline of submissions filed on 24 May 2024.
Applicable legal principles
Application for summary judgment
The legal principles that apply to an application for summary judgment are well settled and are not in dispute.
An application under RSC O 14 must be supported by an affidavit verifying the facts upon which the claim is based and stating that, in the deponent's belief, there is no defence to the claim.[1]
[1] RSC O 14 r 2(1).
The power to grant summary judgment should be exercised with great care. Summary judgment should only be granted in the clearest of cases, where there is no real issue to be tried. If it is not possible to say, on the whole of the material, that there is no question to be tried, the defendant should have the opportunity to defend the action.[2]
[2] Westpac Banking Corporation v Anderson [2017] WASC 106 (Pritchard J)[104], and the authorities referred to.
As the Court of Appeal said in Sutton Investments Pty Ltd v Realistic Investments Pty Ltd:[3]
Summary judgment will be granted only when there is no real question to be tried. The power to order summary judgment is one that should be exercised with great care: Fancourt v Mercantile Credits Ltd [1983] HCA 25; (1983) 154 CLR 87, 99. It is only in the clearest of cases, when there is a high degree of certainty about the ultimate outcome of the proceedings if it went to trial, that summary judgment ought properly be granted: Agar v Hyde[2000] HCA 41; (2000) 201 CLR 552 [57]; Batistatos v Roads and Traffic Authority of New South Wales [2006] HCA 27; (2006) 226 CLR 256 [46]; Spencer v The Commonwealth of Australia [2010] HCA 28; (2010) 241 CLR 118 [24], [53] - [55].
[3] Sutton Investments Pty Ltd v Realistic Investments Pty Ltd [2017] WASCA 14 [24].
The plaintiff bears the legal burden of persuading the court that the claim is a good one and there is no defence to it. If the plaintiff's affidavit in support of an application makes out a prima facie case on these two matters, the evidentiary burden passes to the defendant to show there is an arguable defence or another reason there ought to be a trial.[4]
[4] Westpac Banking Corporation v Anderson [53] - [54], [103]. See also Deputy Commissioner of Taxation v Lafferty [2017] WASC 257 (Tottle J) [54] and the authorities referred to.
A defendant seeking to demonstrate an arguable defence or some other reason why there ought to be a trial must condescend to particulars and provide sufficient details of their defence.[5] Where an issue or question is raised, summary judgment should only be granted in favour of the applicant where they can demonstrate that the question will certainly be resolved in their favour.[6]
[5]Deputy Commissioner of Taxation v Lafferty [54], citing Moscow Narodny Bank Ltd v Mosbert Finance (Aust) Pty Ltd [1976] WAR 109 (Brinsden J), 113; Wallingford v Mutual Society (1880) 5 App Cas 685, 704 (Lord Blackburn).
[6] Spencer v The Commonwealth [2010] HCA 28; (2010) 241 CLR 118 [54] ‑ [55]; Fels v Rural Bank [2020] WASCA 151 [27].
Application for leave to bring an application for summary judgment out of time
RSC O 14 r 1(1) requires an application for summary judgment to be made within 21 days after an appearance has been filed, or any later time with leave of the court.
The 21-day time limit to bring an application for summary judgment reflects the view that such applications should be brought at an early stage of the proceedings, and before too much expense has been incurred. Where there is a delay, it must be explained and the onus is on the applicant to demonstrate that the delay is justifiable in all of the circumstances. Any prejudice to the other party caused by the delay and the prospects of the application are also relevant factors.[7]
[7] See Westpac Banking Corporation v Anderson [38], and the authorities referred to.
In Gallo v Dawson,[8] McHugh J said, in the context of leave to extend time to appeal:
The discretion to extend time is given for the sole purpose of enabling the Court of Justice to do justice between the parties. This means that the discretion can be exercised in favour of an applicant upon proof that strict compliance with the rules will work an injustice upon the applicant. In order to determine whether the rules will work an injustice, it is necessary to have regard to the history of the proceedings, the conduct of the parties, the nature of the litigation and the consequences for the parties of the grant and refusal of the application for the extension of time.
[8] Gallo v Dawson [1990] HCA 30; (1990) 64 ALJR 458, 459.
Procedural history
The proceeding was commenced by writ of summons on 14 July 2023.
The defendant entered an appearance on 8 August 2023.
A statement of claim was filed on 30 November 2023.
An amended writ of summons was filed on 25 January 2024, pursuant to orders made by consent on 15 January 2024.
The parties agreed to an extension of time for filing and service of the defence, and a defence was filed on 27 February 2024.
Orders were made by consent on 21 March 2024 for, relevantly, the plaintiff to file any application for leave to apply for summary judgment and for summary judgment by 4 April 2024.
The plaintiff filed the Application on 4 April 2024.
Plaintiff's claim
The plaintiff's claim as pleaded in the statement of claim filed on 30 November 2023 is for damages for breach of agreements between the plaintiff and defendant, under which the plaintiff claims it loaned a total of USD$1 million[9] to the defendant, which despite demand, the defendant has not repaid.
[9] All further references to $ amounts in these reasons are to US Dollars.
The amount claimed is made up of three amounts the plaintiff alleges that it loaned to the defendant on three separate occasions in 2019.
The first of those is pleaded in paragraphs 3 to 5 of the statement of claim. The plaintiff pleads that, on 1 October 2019, the plaintiff and the defendant entered into a written loan agreement titled Loan Agreement (Loan Agreement) pursuant to which the plaintiff agreed to lend the defendant $250,000, which was repayable on 30 September 2020 with interest accruing at a simple rate of 10% each year.[10]
[10] Statement of claim filed on 30 November 2023 (SOC) [3].
The plaintiff pleads that it pre-paid the loan amount of $250,000 by electronic funds transfer into the defendant's nominated bank account on 30 September 2019.[11] The plaintiff claims that the amount of $250,000 was repayable on 30 September 2020 and has not been repaid by the defendant in breach of the Loan Agreement.[12]
[11] SOC [4].
[12] SOC [5].
The plaintiff claims that it loaned two further amounts to the defendant in December 2019 under two deeds.
At paragraph 6 of the statement of claim, the plaintiff claims that, on 13 December 2019, the plaintiff and the defendant entered into a deed pursuant to which the plaintiff agreed to lend the defendant $500,000 in exchange for which the defendant agreed to issue convertible loan notes to the plaintiff to the value of $500,000 (13 December Deed).
The plaintiff pleads the terms of the 13 December Deed in paragraph 7 of the statement of claim, relevantly, as follows:
(a)the defendant was entitled to make a written request to the plaintiff to pay, and the plaintiff was required to pay, the 'Total Notes Price', being $500,000, to the defendant (cl 3(a) of the 13 December Deed);[13]
[13] SOC [7(a)]. SOC [7(a)] includes what appears to be a typographical error. It refers to cl 3(a) of the 16 December Deed. All other references in SOC [7] are to the 13 December Deed.
(b)the defendant was deemed to have issued convertible loan notes of the defendant to the plaintiff to that value upon the plaintiff paying the amount of $500,000 to the defendant (cl 3(b) of the 13 December Deed);[14]
[14] SOC [7(b)].
(c)the convertible loan notes were either:
(i)convertible to shares on or before the 'Maturity Date', being 3 years after the date they were issued (cl 4.1(c)(i) of the 13 December Deed); or
(ii)redeemable for cash on the Maturity Date (cl 4.1(c)(ii) of the 13 December Deed);[15]
(d)the plaintiff was required to elect, on or before the Maturity Date (13 December 2022) by notice in writing to the defendant to:
(i)convert the loan notes into shares of the defendant (pursuant to cl 6(a)(i) of the 13 December Deed); or
(ii)redeem the convertible loan notes (pursuant to cl 6(a)(ii) of the 13 December Deed);[16]
(e)the defendant was required to pay the plaintiff the 'Note Price', being $1 for each convertible loan note as soon as practicable after the Maturity Date (cl 8.1(a), (b) and (c) of the 13 December Deed);[17] and
(f)the defendant was required to make all payments under the 13 December Deed by electronic funds transfer to the plaintiff's nominated account, as notified in writing to the defendant (cl 9 of the 13 December Deed).[18]
[15] SOC [7(d)].
[16] SOC [7(e)].
[17] SOC [7(f)].
[18] SOC [7(g)].
The plaintiff pleads that:
(a)it paid $500,000 to the plaintiff's nominated bank account on 13 December 2019;[19]
(b)on about 16 December 2019, the defendant issued 500,000 convertible loan notes to the plaintiff by a 'Convertible Loan Note Certificate' bearing certificate number: 0006 executed by the defendant by signatures of Steven Fang and Chow Yee Koh;[20]
(c)by letter from the plaintiff's representative to the defendant on 1 September 2022, the plaintiff elected to redeem the convertible loan notes, pursuant to cl 6(a)(ii) of the 13 December Deed;[21]
(d)the convertible loan notes matured on the Maturity Date (13 December 2022);[22] and
(e)in breach of cl 6(a)(ii) of the 13 December Deed, the defendant has failed or refused, since 13 December 2022, to pay $500,000 to the plaintiff in redemption of the convertible loan notes.[23]
[19] SOC [8].
[20] SOC [9].
[21] SOC [10].
[22] SOC [11].
[23] SOC [13].
At paragraphs 14 to 22 of the statement of claim, the plaintiff makes a similar claim in relation to a deed it alleges was entered into between it and the defendant on 16 December 2019 (16 December Deed). The plaintiff claims that, under the 16 December Deed, the plaintiff agreed to pay the defendant $250,000, on the defendant's request, in exchange for which the defendant agreed to issue convertible loan notes to the plaintiff to the value of $250,000. This is the third occasion on which it is alleged the plaintiff loaned monies to the defendant.
The plaintiff pleads that:
(a)on 16 December 2019, the defendant requested by email that the plaintiff pay $250,000 by electronic funds transfer to the bank account pleaded held in the name of Invitrocue (Hong Kong) Ltd;[24]
(b)$500,000 was paid to the defendant's nominated account by the plaintiff on 16 December 2019, $250,000 of which comprised the amount requested by the plaintiff under the 16 December Deed, and the remainder related to a purchase of shares unrelated to this proceeding;[25]
(c)on or around 16 December 2019, the defendant issued 250,000 convertible loan notes to the plaintiff by a 'Convertible Loan Note Certificate' bearing certificate number: 0005 executed by the defendant by the signatures of Steven Fang and Chow Yee Koh,[26] which the defendant elected to redeem by letter to the plaintiff's representative dated 1 September 2022;[27]
(d)the convertible loan notes issued on 16 December 2019 matured on the 'Maturity Date' (16 December 2022);[28] and
(e)in breach of cl 6(a)(ii) of the 16 December Deed, the defendant has failed or refused, since '1 October 2022', to pay the amount of $250,000 to the plaintiff in redemption of the convertible loan notes.[29]
[24] SOC [16].
[25] SOC [17].
[26] SOC [18].
[27] SOC [19].
[28] SOC [20].
[29] SOC [22].
Alternatively, the plaintiff pleads at paragraph 23 of the statement of claim that the plaintiff 'lent' to the defendant:
(a)$250,000 on 30 September 2019; and
(b)$750,000 on 13 December 2019.
The plaintiff pleads that, despite demand, the defendant has refused to repay the amount claimed of $1,000,000 to the plaintiff,[30] and the defendant is indebted to the plaintiff in that amount.[31]
[30] SOC [24].
[31] SOC [25].
The defence
The defendant denies that it entered into the Loan Agreement or any loan agreement with the plaintiff.[32]
[32] Defence filed on 27 February 2024 (Defence) [3].
The defendant says the plaintiff paid $250,000 into the defendant's bank account on 30 September 2020, but otherwise denies the allegations that it was pre-paid as a loan under the alleged Loan Agreement with the plaintiff.[33]
[33] Defence [4].
The defendant says it did not pay any amount to the plaintiff on 30 September 2020 or on any other date and denies that it concluded or breached any loan agreement between it and the plaintiff.[34]
[34] Defence [5].
In relation to the amounts claimed by the plaintiff under the alleged 13 December Deed and 16 December Deed, the defendant denies it entered into any deed with the plaintiff.[35]
[35] Defence [6], [14].
The defendant says the plaintiff paid two payments of $500,00 into its account by electronic transfer.[36] It denies that it issued the convertible loan notes and the certificates pleaded to the plaintiff on or around 16 December 2019, as alleged.[37]
[36] Defence [8], [17].
[37] Defence [9], [18].
The defendant admits that the plaintiff has demanded payment and that it has not paid $1,000,000 or any other amount to the plaintiff, but denies it was obliged to make any payments to the plaintiff.[38]
[38] Defence [13], [19], [21].
The defendant otherwise denies each of the allegations in the statement of claim, and denies the plaintiff is entitled to the relief claimed, or to any relief.[39]
[39] Defence [23].
Plaintiff's submissions
I will first address the substantive submissions in relation to the Application, and then the submissions relating to the application to bring the Application out of time.
The Application
The plaintiff submits that summary judgment should be granted because the defendant admits that the plaintiff paid the amounts claimed into its bank account and, despite demand, has not paid the $1,000,000 claimed, or any amount, to the plaintiff. The plaintiff relies on paragraphs 4, 8, 17 and 21 of the defence.
In its outline of submissions, the plaintiff says, in summary, that the defendant has:
(a)failed to explain why it is entitled to retain the money it admits it has received and to identify any issue which ought to be tried, or any other reason why there ought to be a trial of the action;
(b)done no more than make generalised allegations and statements of belief, unsupported by evidence or particulars that it has a defence to the plaintiff's claims, and that there are issues or questions in dispute which ought to be tried; and
(c)not identified the basis of that belief or adduced evidence as to what those issues and questions are.
Counsel for the plaintiff made submissions to the effect that the plaintiff is not required to adduce evidence of the Loan Agreement, the 13 December Deed or the 16 December Deed. He stated that the plaintiff does not rely on those agreements for the purpose of the Application. It relies on the admitted facts that:
(a)the defendant has been paid money by the plaintiff, which the plaintiff has demanded; and
(b)the defendant has not paid the amount demanded, or any amount to the plaintiff.
In oral submissions, it was submitted on behalf of the plaintiff that the defendant has the plaintiff's money with no claim of right and must return it. Counsel for the plaintiff accepted there is no claim pleaded in the nature of a claim for money had and received. Rather, the plaintiff's claim is advanced as a claim for damages for breach of the Loan Agreement and each of the deeds.
In response to the defendant's submissions to the effect that the plaintiff does not plead the claim now sought to be advanced for repayment of money had and received, the plaintiff made submissions to the effect that its claim should not be defeated because of 'pleading niceties' and because it has not used those specific words.[40]
[40] ts 17 - 18 and ts 26 - 27, referring to Pisano v South Metropolitan Health service [2023] WASCA 80 [27].
It was also submitted that, in determining the Application, the court has a broad discretion and, what appears to have been suggested is, that it is not necessary for the plaintiff to have specifically pleaded a claim for the return of money 'had and received' by the defendant, and that the court should apply equitable principles to do justice between the parties.[41] Those submissions were withdrawn.[42]
[41] ts 21, 29.
[42] ts 59.
The plaintiff also relies on its alternative claim pleaded in paragraph 23 of the statement of claim, that the plaintiff lent the defendant $1,000,000.
Application for leave to bring the Application out of time
The plaintiff submits that it could not have made the Application based on the writ of summons filed on 14 July 2023 or the statement of claim. The plaintiff says that its entitlement to summary judgment is 'laid bare' by the defence, particularly paragraphs 4, 8 and 13 of the defence, in which it says the plaintiff admits receipt of the monies the subject of the claim.
The plaintiff relies on the affidavit of Ryan Eamonn Lennon affirmed on 23 April 2024 in which it is said the delay is set out. However, that affidavit provides no explanation for the delay of seven months in bringing the Application beyond the matters outlined in the plaintiff's written submissions.
The plaintiff submits that the delay in bringing the Application was not extensive considering the defence was served on 27 February 2024, there have been no interlocutory steps undertaken and no unnecessary expense incurred. It also says there is no evidence of prejudice to the defendant.
Defendant's submissions
As with the plaintiff's submissions, I will first address the defendant's substantive submissions in relation to the Application, and then its submissions relating to the application to bring the Application out of time.
The Application
The defendant denies that it entered into the Loan Agreement, the deeds the plaintiff relies upon, or any agreement or deed with the plaintiff.
The defendant submits that the plaintiff has not adduced any of the written agreements it refers to and relies upon for its claim or the convertible loan notes it alleges the defendant issued to the plaintiff, to verify its claim.
The defendant submits that the agreements upon which the plaintiff relies in its statement of claim are not between the plaintiff and the defendant but between an entity named Chinalink Limited and the defendant. It also points out that the convertible loan notes and certificates upon which the plaintiff relies in its statement of claim were not issued by the defendant to the plaintiff, as alleged, but to Chinalink Limited.
The defendant submits that the plaintiff has not verified its claim, or that it is the creditor entitled to recover the amount of $1,000,000 demanded of, and that it now claims from, the defendant, or on what basis it is said to be the entity entitled to receive payment. It has not produced evidence of the Loan Agreement or the deeds relied on, which are alleged to have been entered into between the plaintiff, Chinalink Asia Holdings Limited, and the defendant. The only agreements before the court are those attached to Ms McNally's affidavit, which are between Chinalink Limited and the defendant.
The defendant's position is that there is a dispute and a matter to be tried as to the identity of the creditor and whether the defendant is entitled to payment of the amount claimed. The plaintiff has not established that it is the creditor to whom the amount claimed is payable. The defendant says there is no explanation by the plaintiff for the different entity names, and 'the real creditor might come out of the woodwork'. In essence, the defendant does not want to pay the amount demanded by the plaintiff and then face a claim for repayment from Chinalink Limited.
The defendant submits that the plaintiff is on notice of the basis upon which it defends the plaintiff's claim, and that there is an issue as to the identity of the creditor. It says these matters were raised by it in an application to set aside a statutory demand issued by the plaintiff in relation to the amount claimed under the Loan Agreement.
The defendant says nothing has changed since that application was allowed by Master Sanderson on 14 December 2022 on the basis there was a genuine dispute as to the identity of the proper creditor. The plaintiff has not adduced evidence to support its claim that it is a party to the loan agreement or deeds entered into by the defendant, and that it is entitled to be paid the amount claimed.
Application for leave to bring the Application out of time
The defendant opposes the plaintiff's application for leave to bring the Application out of time.
It is submitted on behalf of the defendant that the Application is not supported by an affidavit which explains the delay and shows that the delay is justifiable in all the circumstances.
The defendant says that it is prejudiced because the plaintiff waited for the defendant to file its defence, despite knowing precisely what the defendant's case was from its earlier, successful application to set aside the statutory demand issued by the plaintiff in relation to part of the same claimed debt. The defendant says it disputed the debt then as there was no evidence the plaintiff is entitled to be paid the amount claimed. It says nothing has changed since the application to set aside the statutory demand, and the plaintiff has led no evidence to resolve 'the impasse'.[43]
[43] ts 35 - 36.
The defendant submits that the plaintiff's application for summary judgment in respect of a debt the court has previously held is the subject of a genuine dispute is an abuse of process. It says this and the unmeritorious nature of the Application are further grounds upon which leave to bring the Application out of time should be refused.
In reply, it was submitted on behalf of the plaintiff that, at the time of the application to set aside the statutory demand, there was no acceptance by the defendant that it had received money from the plaintiff, or in relation to demands made. It says that is what has changed, and it made the Application after the defence was filed admitting those matters.
Evidence of the plaintiff
Neither of the affidavits filed in support of the Application by the plaintiff attach the Loan Agreement, the 13 December Deed or the 16 December Deed under which it is alleged the plaintiff loaned the monies the subject of the plaintiff's claim to the defendant. Nor do they attach the letters of election referred to in relation to the 13 December Deed and the 16 December Deed.
In her affidavit affirmed on 4 April 2024, Ms Beckwith states that she has reviewed Denton Australia's file in relation to this matter and has ascertained that the plaintiff paid the following amounts to the defendant, as evidenced by the 'Debit Advice[s]' attached:
(a)$250,000 on 30 September 2019; and
(b)$500,000 on 13 December 2019;
(c)$250,000 on 16 December 2019.
Ms Beckwith refers to and attaches to her affidavit three debit advices addressed to the plaintiff from China Merchants Bank Co Ltd, which refer to the following payments having been made from the named account:
(a)$1,000,000 on 30 September 2019 to Invitrocue Pte Ltd,[44] $250,000 of which Ms Beckwith deposes is the amount loaned by the plaintiff to the defendant, as pleaded in paragraphs 3, 4, 5 and 23(a) of the statement of claim;[45]
(b)$500,000 on 13 December 2019 to Invitrocue Pte Ltd,[46] which Ms Beckwith deposes is the amount loaned by the plaintiff to the defendant, as pleaded in paragraphs 8 and 23(b) of the statement of claim;[47] and
(c)$500,000 on 13 December 2019 to Invitrocue (Hong Kong) Limited,[48] which Ms Beckwith deposes is the amount loaned by the plaintiff to the defendant, as pleaded at paragraphs 17 and 23(b) of the statement of claim.[49]
[44] Affidavit of Abbi Beckwith affirmed on 4 April 2024 (Beckwith Affidavit) [4(a)].
[45] Beckwith Affidavit [4(b)].
[46] Beckwith Affidavit [4(c)].
[47] Beckwith Affidavit [4(d)].
[48] Beckwith Affidavit [4(e)].
[49] Beckwith Affidavit [4(f)].
The defendants objected to paragraphs 4(b), 4(d) and 4(f) of the Beckwith Affidavit on the grounds that Ms Beckwith has no personal knowledge of the matters deposed to, the statements made are conclusionary with no factual foundation and are argumentative. The objections were conceded on behalf of the plaintiff and those sub-paragraphs of the affidavit were not read.[50]
[50] ts 5.
The defendants did not object to paragraphs 4(a), 4(c) and 4(e) of the Beckwith Affidavit or the copies of the debit advices referred to in those paragraphs, attachments 'AB1', 'AB2' and 'AB3'. The copies of the debit advices attached to the Beckwith Affidavit were unclear. The plaintiff's lawyers provided clearer copies, which I have marked for identification as MFI-A.
Also attached to Ms Beckwith's affidavit is a copy of a letter dated 2 September 2021 from Truevera Investments Limited, Shanghai to the defendant.[51] The letter is headed:
RE: Continuing Default: Convertible Notes October 2019 – USD250k ('October Notes')
Convertible Notes December 2019 – USD750k ('December Notes')[51] Beckwith Affidavit [4(g)], 'AB4'.
The letter refers to previous correspondence in relation to the above matter and a letter from the defendant dated 27 August 2021. However, the previous correspondence and the letter referred to have not been adduced. The 2 September 2021 letter states:
In relation to the October Notes and December Notes (collectively known as 'Defaulted Bonds'), you are required to remit the principal and accrued interest to Chinalink by no later than close of business 6th September 2021.
The 2 September 2021 letter then sets out:
(a)under a heading 'October Notes', 'Principal Amount Outstanding' USD$250,000, and the amount of accrued interest; and
(b)under a heading 'December Notes', 'Principal Amount Outstanding' USD$750,000, and the amount of accrued interest,
and states that to avoid recovery action, 'you are required to remit the amount of USD1,193,151 by no later than 6th September 2021 to the bank account below'. The bank details provided are for an account in the name of the plaintiff with China Merchants Bank, Hong Kong Branch. The account number is the same as that shown in each of the debit advices attached to the Beckwith Affidavit.
Evidence of the defendant
In her affidavit sworn on 26 April 2024 in opposition to the Application, Ms McNally deposes that she is informed by Boon Sing Fang (also known by the name of Steven Fang) and believes that, on 1 October 2019, the defendant represented by Mr Fang entered into a written loan agreement with Chinalink Limited.[52]
[52] Affidavit of Kathleen Marie McNally sworn 26 April 2024 (McNally Affidavit) [8].
A copy of a loan agreement is attached to the McNally Affidavit.[53] The lender is stated as Chinalink Limited and the borrower as Invitrocue Limited. The loan amount is stated as $250,000, repayable on 30 September 2020.
[53] McNally Affidavit 'KMM7'.
Ms McNally also deposes that she is informed by Steven Fang, and believes, that on each of 13 December 2019[54] and 16 December 2019,[55] Chinalink Limited and the defendant executed as a deed, a convertible loan note. A copy of each deed is attached to the McNally Affidavit.[56] In each deed, the defendant, Invitrocue Limited, is defined as the 'Company' and Chinalink Limited as the 'Investor'. There is no reference to Chinalink Asia Holdings Limited.
[54] McNally Affidavit [9].
[55] McNally Affidavit [10].
[56] McNally Affidavit 'KMM8', 'KMM9'.
Included in attachment 'KMM8' at page 85 of the McNally Affidavit is a copy of Convertible Loan Note Certificate, certificate number: 0006 dated 13 December 2019, which refers to 500,000 convertible loan notes and $500,000, and to the registered holder as Chinalink Limited.
Included in attachment 'KMM9' at page 102 of the McNally Affidavit is a copy of Convertible Loan Note Certificate, certificate number: 0005 dated 16 December 2019, which refers to 250,000 convertible loan notes and $250,000, and to the registered holder as Chinalink Limited.
Also attached to the McNally Affidavit is an email from Mark Harrick of Harrick Lawyers dated 23 September 2021 to Steven Fang of the defendant stating that he acts for Chinalink Limited with respect to funds due and payable to Chinalink Limited from the convertible loan note dated 1 October 2019. He states that $250,000 from the convertible loan note and accrued interest is owing to Chinalink Limited and has not been paid despite demands. He advises that proceedings will be issued 'next week' for recovery of the amounts due.[57]
[57] McNally Affidavit [7], 'KMM6'.
Ms McNally deposes to two statutory demands served on the defendant on 3 June 2022 and 18 November 2021.[58] A copy of each of the statutory demands is attached to the McNally affidavit.
[58] McNally Affidavit [3].
The statutory demand dated 18 November 2021[59] was issued by Chinalink Limited. There is no evidence before the court as to what happened in relation to that demand. The statutory demand dated 3 June 2022 was issued by the plaintiff, Chinalink Asia Holdings Ltd.[60] Each demand claims payment of $250,000 plus interest stated to be a debt payable in relation to a loan agreement between the defendant and each of those companies dated 1 October 2019.
[59] McNally Affidavit, 'KMM2'.
[60] McNally Affidavit, 'KMM1'.
The defendant applied to set aside the 3 June 2022 statutory demand in Supreme Court action number COR 114 of 2022.[61] A copy of the transcript of the hearing before Master Sanderson on 14 December 2022 is attached to the affidavit of Maddison Ann McLauchlan affirmed on 14 May 2024.
[61] McNally Affidavit [4], 'KMM3'.
After hearing arguments similar to those raised by the defendant in this proceeding as to the identity of the creditor (in relation to $250,000 of the amount claimed in this proceeding), Master Sanderson set aside the statutory demand on the basis that there was a genuine dispute as to whether the party making the demand is entitled to payment.[62] He also found that there was a defect in the demand which could visit an injustice on the plaintiff if the demand were not set aside.
[62] Affidavit of Maddison Ann McLauchlan (McLauchlan Affidavit] [3], 'MAM1', page 20.
The defendant relies on the copies of the loan agreement, deeds and convertible loan notes attached to the McNally Affidavit in support of its defence that it did not enter into, and is not in breach of, any agreement with the plaintiff.
The defendant submits there is no evidence before the court of any agreement between the plaintiff and the defendant and that there is an issue to be tried, as there was in the statutory demand application. That is, the identity of the entity to which the defendant is indebted under the agreements on which the plaintiff relies, which the defendant says is not the plaintiff in this proceeding.
The defendant submits, in effect, that this is not an appropriate case for summary judgment, and the Application should be dismissed because, as was found in the statutory demand application, there is a genuine dispute between the parties as to the identity of the defendant's creditor, which is a real question to be tried in these proceedings.
It has not been suggested that, because the court found there was a genuine dispute in the earlier application to set aside the statutory demand, I am bound by that in my determination of the Application. I must, of course, determine the Application on its own merits on the materials before me.
Disposition
I am not persuaded that this matter is as clear as the plaintiff submits.
As outlined, an application for summary judgment under RSC O 14 must be supported by an affidavit verifying the facts upon which the claim is based. The plaintiff bears the legal burden of persuading the court that its claim is a good one and there is no defence to it. If the plaintiff's affidavit in support of an application makes out a prima facie case on these two matters, the evidentiary burden passes to the defendant to show there is an arguable defence or another reason there ought to be a trial.
The plaintiff's claim, as pleaded, is for damages for breach of the Loan Agreement, the 13 December Deed and the 16 December Deed. There is an alternative claim that pleads, without any particulars being given, that the plaintiff lent the defendant $250,000 on 30 September 2019 and $750,000 on 13 December 2019.
The plaintiff has not adduced evidence of the Loan Agreement or the deeds relied upon to verify its pleaded claim.
The plaintiff submits it does not rely on those agreements for the purpose of the Application. Rather, it relies on the defendant's pleaded admissions that it received money from the plaintiff, which it has not repaid and has given no explanation as to any right to retain it. The plaintiff relies upon the defendant's pleas that payments were made into the defendant's account and that it has not paid any money to the plaintiff.
The defendant admits by paragraphs 4, 8 and 17 that the plaintiff paid amounts totalling $1,250,000 into the defendant's bank account on 30 September 2019 and 13 December 2019. However, it denies it entered into any agreement with the plaintiff, and that it has any obligation to pay the amount claimed to the plaintiff.
Neither the amended writ, nor the statement of claim, pleads any cause of action in the nature of a claim for repayment of money had and received, which the plaintiff seeks to rely upon for the purpose of the Application. Nor is it clear, precisely on what basis any such claim is advanced. As the defendant submits, that is not a 'pleading nicety'. A cause of action is a substantive matter that must be pleaded. It is not a matter to be inferred.
One of the key purposes of a pleading is to inform the other party of the case it is required to meet. It must provide enough detail to inform the opposing party of the specific case it needs to address,[63] including the cause or causes of action and the basis upon which the claim is said to arise.
[63] See for example, Vantage Holdings Group Pty Ltd v Donnelly [No 4] [2019] WASC 398 [60(a)], affirmed by the Court of Appeal in English v Vantage Holdings Group Pty Ltd [2021] WASCA 47 [55] - [56].
The plaintiff's claim, as pleaded, is said to arise from the defendant's breach of the agreements alleged to have been entered into between the plaintiff and the defendant. The only evidence before the court of loan agreements and deeds entered into by the defendant are the copies of the loan agreements and deeds adduced by the defendant. The other party to those agreements is Chinalink Limited, not Chinalink Asia Holdings Limited.
The defendant has also adduced copies of convertible loan note certificates numbered 0005 and 0006, which the plaintiff pleads were issued to it. They do not bear the plaintiff's name, but that of Chinalink Limited.
Whilst the defence is scant and the affidavit in opposition to the Application does not expressly state the issue or question to be tried, the evidence before the court discloses that the question raised by the defendant is a matter to be determined and a reason why this action should proceed to trial. That is, whether the plaintiff, Chinalink Asia Holdings Limited, is the party entitled to repayment of the monies payable by the defendant under the terms of the Loan Agreement, the 13 December Deed and the 16 December Deed, as pleaded.
There is no evidence before me to confirm that the plaintiff is the same entity as Chinalink Limited or that the plaintiff is the entity entitled to payment under the terms of the Loan Agreement or deeds pleaded in the statement of claim.
The plaintiff suggests some connection between the two entities (Chinalink Limited and the plaintiff), and it appears to have been suggested in the application to set aside the statutory demand that Chinalink Limited may be an abbreviation of the plaintiff's name. However, there is no evidence presently before the court of any such connection or abbreviation. Nor is there any evidence that payment by the defendant to the plaintiff, if made, would discharge the plaintiff's liability to Chinalink Limited.
In the circumstances, exercising the proper degree of care, I am not satisfied that this is a case in which there is no real issue to be tried or that this is a sufficiently clear case in which summary judgment should be granted. The Application should be dismissed.
As to the application for leave to bring the application out of time, I am not persuaded that the delay alone is such as to preclude the grant of leave to bring the Application out of time. Despite the seven month delay between an appearance being entered and the Application being made, the proceeding is not well advanced and there is no evidence of any particular prejudice to the defendant caused by the lateness of the Application.
I would not go so far as to say the Application is an abuse of process, as submitted by the defendant. However, the merit of the Application is a relevant consideration. Having found against the plaintiff, and that the Application should be dismissed, the application for leave to bring the Application out of time is also refused.
Conclusion and orders
For these reasons, this case is not one in which it is clear there is no real issue to be tried such that summary judgment ought be granted. The Application should be and is dismissed, and the application for leave to bring the Application is refused.
I will hear from the parties as to the form of final orders and in relation to costs.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
AP
Associate to Master Russell
23 JULY 2024
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