Coolala Homes Pty Ltd v Bookara Beach Northern Golf ITR Investment Pty Ltd
[2024] QDC 170
•11 October 2024
DISTRICT COURT OF QUEENSLAND
CITATION:
Coolala Homes Pty Ltd v Bookara Beach Northern Golf ITR Investment Pty Ltd & another [2024] QDC 170
PARTIES:
COOLALA HOMES PTY LTD
(Plaintiff)
v
BOOKARA BEACH NORTHERN GOLD ITR INVESTMENT PTY LTD
(First Defendant)and
OLIVER THAM
(Second Defendant)
FILE NO:
879/24
DIVISION:
Civil
PROCEEDING:
Application
ORIGINATING COURT:
District Court
DELIVERED ON:
11 October 2024
DELIVERED AT:
Brisbane
HEARING DATE:
23 August 2024
JUDGE:
Heaton KC DCJ
ORDER:
1. The application for summary judgment is dismissed.
2. The application to strike out paragraphs of the first and second defendants’ Defence filed on 22 May 2024 is allowed only to the extent of striking out the contents of paragraph 17 identified above, and paragraph 24. Otherwise, the application is dismissed.
3. No order as to costs.
CATCHWORDS:
Practice and procedure — Judgments and orders — Summary judgment — Prospects of success – Force Majeure — Pleadings — Strike out — Defence
LEGISLATION
Uniform Civil Procedure Rules 1999 (Qld) rr 5; 280; 292; 389
Queensland Building and Construction Commission Act 1991 (Qld) r 111CCASES
Rich v CGU Insurance Ltd (2005) ALR 370
COUNSEL:
C Templeton instructed by Aitken Whyte for the plaintiff/applicant.
O Tham appeared in person for the second defendant/respondent.
By an agreement entered into between the parties on 3 April 2018, the plaintiff/applicant (Coolala Homes) extended a loan of $700 000 to the first defendant (Bookara Beach Investment). The agreement was executed by the second defendant/respondent (Oliver Tham) in his capacity as director of Bookara Beach Investment and the money was paid into Bookara Beach Investment’s bank account on 5 April 218 pursuant to the terms of the agreement. In broad terms, the money was to be used as part of a resort development on the west coast of Australia, south of Geraldton.
An additional relevant dimension to these events is that the plaintiff (or the people behind the plaintiff company) and the second defendant have a personal association beyond their formal legal relationship. They are also both members of the congregation of the My Father’s House Ministry Church in Burpengary.
It is not presently necessary to set out the terms of the agreement except that in Clause ‘S’, Mr Tham agreed to personally guarantee the loan in these terms:
“Oliver Tham as Director of Bookara Beach Northern Golf ITR Investment Pty Ltd hereby offers a Capital Guarantee that in [sic] for any reason The Private Lender does not receive a full return of the initial Loan Amount, after 5 years he will give to The Private Lender the full amount of the initial amount provided, or if the Private lender has received some payments, the balance of payments making the full initial amount repaid in full by five years.”
As at 5 April 2023, that is five years after the $700 000 was advanced to the defendants, no money had been repaid by the defendants to the plaintiff. Consequently, by a Claim and Statement of Claim filed on 2 April 2024, the plaintiff seeks to enforce the agreement of Mr Tham to repay the principal advanced.
Mr Tham is representing himself in these proceedings, and in this application. He filed a Notice of Intention to Defend and a Defence on 22 May 2024. Mr Tham denies that liability to repay the principal amount has arisen because the agreement also included, and was therefore subject to, a ‘Force Majeure’ clause which was in these terms;
14. Force Majeure
a. A party is not liable for failure to perform the party’s obligation if such failure is as a result of Acts of God (including fire, flood, earthquake, storm, hurricane or other natural disaster), war, invasion, act of foreign enemies, hostilities (regardless of whether war is declared), civil war, rebellion, revolution, insurrection, military or usurped power or confiscation, terrorist activities, nationalization, government sanction, blockage, embargo, labor dispute, strike, lockout or interruption or failure of electricity or telephone service. No party is entitled to terminate this Agreement in such circumstances. If a party asserts Force Majeure as an excuse for failure to perform the party’s obligation, then the nonperforming party must prove that the party took reasonable steps to minimize delay or damages caused by foreseeable events, that the party substantially fulfilled all non-excused obligations, and that the other party was timely notified of the likelihood or actual occurrence of an event described in (Force Majeure).
Mr Tham contends that the Force Majeure clause applies in the circumstances of this case and has the effect of relieving him of his obligation to repay the monies advanced because, following the execution of the agreement and the money being advanced, the Covid 19 global pandemic intervened and significantly disrupted his plans to develop the resort to which the agreement related. Whether it applies, and the scope of its application (if any) are matters about which there is some dispute between the parties to this cause of action.
I note that the Force Majeure clause itself does not set out the consequences of the application of the Force Majeure clause, but it does set out the procedure to be followed in order to invoke its application. The plaintiff submits that the formal procedure has not been followed and therefore Mr Tham is precluded now from acting in reliance upon it.
It may be correct to say that the formal process set out in the Force Majeure clause has not been followed by the defendant, but due to the personal association between the plaintiff and Mr Tham, the situation in this case is more complicated than the formal legal documents might otherwise suggest.
In his defence filed on 22 May 2024, Mr Tham contends that the plaintiff agreed to an extension of the requirement to repay the principal pursuant to Clause ‘S’ of the agreement for a period of three years. He alleges that this was confirmed in an email from the plaintiff dated 8 May 2024. The plaintiff denies that an agreement to extend was given by her.
The meeting on 1 May 2024
It is necessary to put the defendant’s contention in some chronological context. The Claim and the Statement of Claim were filed by the plaintiff on 2 April 2024. Despite the plaintiff then having engaged solicitors to act for them in relation to the claim, it is clear that contact between the plaintiff and Mr Tham was occurring directly, and in relation to this contractual arrangement.
On 1 May 2024, a meeting was held between the plaintiff and Mr Tham which was mediated by the pastor of their church, Ropati Lotomau. He deposes to the fact that it was the plaintiff who sought the meeting and that the purpose of the meeting was to find a way to resolve the issue that arose between the parties as a result of the agreement entered into in 2018. He also deposes that at that meeting, Mr Tham explained that Covid 19 had impacted many industries and that an extension of “two or three years was reasonable”.
The evidence of Mr Lotomau is that:
“The parties agreed to this and Calvin and Nicola[1] advised that they will be happy to grant the extension of time and ask their lawyers to withdraw the case for the time being.”
[1] The plaintiffs.
In submissions in this application, counsel for the plaintiff denies that such an agreement was reached. It is argued that as the terms of any agreement to extend the time within which to repay the monies were not settled, there was therefore no agreement at all.
Mr Lotomau further deposes that;
“The meeting ended with a good note and at that time the parties seemed happy to take the matter out of court and that they settle the matter and wait for Oliver Tham to work hard over the next few years to find creative was [sic] to recover capital for all investors”.
There is support for the fact of some agreement in the correspondence that followed the meeting between the parties. Exhibited to the affidavit of Mr Tham of 23 May 2024 (filed together with his Defence) is a copy of an email from the plaintiff (‘Nicola Y’) sent on 2 May 2024 at 11.15am in these terms;
“As per our discussion yesterday, I have emailed my lawyer yesterday afternoon advising to withdraw the proceeding. Will keep you posted when I hear back from him.”
Whilst it is clear that there was further communication between the parties in the meantime, the next of the correspondence that is in evidence in this application is an email of 8 May 2024 from the plaintiff to Mr Tham at 9.43pm which is exhibited to the affidavit of Mr Tham of 22 August 2024. The email commences by reference to a ‘Letter of Undertaking’ which is not in evidence. The email continues with a series of questions and comments which appear to relate to the terms of the Letter of Undertaking and demonstrate endeavours between the parties to reach agreement in relation to their continued involvement together in the development which is the subject of the original agreement of 2018. It is material such as this which the plaintiff contends evidences the lack of actual agreement to extend the time for payment.
Mr Tham however, particularly relies upon what is said in the penultimate paragraph of that email;
“We understand that Covid has taken away 3 years as you said, and are willing to extend the time for repayment as has always been our offer from the beginning. Given the uncertainty mentioned above, when is the latest you anticipate to repay our capital in full? If our capital cannot be repaid in full by that date, Coolala Trust reserves the rights to pursue you further.”
The position adopted by the plaintiff does not sit entirely consistently with the terms of that email. On a proper reading of the correspondence, it tends to evidence agreement by the plaintiff to extend the relevant time, and that the plaintiff has expressed willingness to extend time from ‘the beginning’. The plaintiff also refers to the three years (which the Mr Tham contends was the period agreed to) in terms that support the conclusion that, at the very least, there may be room for misunderstanding as to what was agreed, if at all. And finally, within that correspondence, the plaintiff asked for Mr Tham to nominate ‘the latest’ date that he anticipated being able to repay the principal, and only if payment was not made by that date would the plaintiff pursue her other legal rights.
Is this an appropriate case for a summary judgment?
The plaintiff seeks summary judgment in relation to the whole of the Claim filed on 2 April 2024 pursuant to r 292 of the UCPR. A court is empowered to give summary judgment only if satisfied that the defendant has no real prospect of successfully defending the plaintiff’s claim and there is no need for a trial of the claim. The bar is set understandably high and traditionally the power to grant summary judgment has been exercised in only the clearest of cases. However expressed, the test to be applied requires a high degree of certainty about the ultimate outcome of the proceeding if it were allowed to go to trial in the usual way.[2]
[2] See Rich v CGU Insurance Ltd (2005) ALR 370 at [18].
In its simplest articulation, the plaintiff seeks to enforce the terms of the agreement entered into on 3 April 2018 whereby Mr Tham agreed to personally guarantee an amount of $700 000 extended by way of loan to the defendants. That is, Mr Tham agreed that if the principal was not repaid within five years from that date, then he would personally repay the money to the plaintiff. The plaintiff understood that the money was to be used for a property development including a golf resort on the Western Australian coast. Within the period of five years contemplated by the agreement, the world experienced a global pandemic. It is well known that community life was disrupted in very many ways as the world grappled with the impacts of the pandemic. Unlike other events that might fall within the Force Majeure clause, it is difficult to identify the precise scope of the pandemic and how it might fit within the terms of the Force Majeure clause so that it can be said that Mr Tham has properly complied with its terms.
In this application, it is submitted by the plaintiff that the Force Majeure clause does not apply, if for no other reason, Mr Tham has not sought to invoke the clause by complying with the notice requirements of it. Whilst that might strictly be so, it does not answer the issue that arises in all of the circumstances relevant to this application.
Mr Tham has not sought to avoid responsibility for his obligations to repay the money advanced by the plaintiff by relying on the Force Majeure clause. He has simply sought more time to fulfill his legal obligations. Because of the personal association between the parties, not everything that relevantly occurred in relation to this claim was done with the assistance of lawyers. Whilst I accept that the evidence presently before the court seems to be incomplete and Mr Tham, in submissions, has referred to the existence of other letters or emails that evidence aspects of the communication between he and the plaintiff, the evidence is sufficient in my view to support the contention advanced by Mr Tham that, properly viewed, the plaintiff agreed to extend the terms of Clause ‘S’ by three years. The plaintiff denies that such an agreement was made. Whether an agreement was made, and the scope of it, and whether it is a sufficient answer to the Claim despite the lack of formal compliance with the Force Majeure clause are all matters of fact which it is inappropriate to attempt to resolve in an application for summary judgment. The matter clearly needs a trial to resolve these factual matters and the legal consequences, if any, of them.
Consequently, I am unable to conclude that Mr Tham has no real prospects of successfully defending the claim and, in my view, the factual matters that arise should be resolved in a trial.
The application for summary judgment is dismissed.
Application to strike out paragraphs of the first and second defendants’ Defence
The first and second defendants filed a joint defence on 22 May 2024. The plaintiff seeks that paragraph 5(f) and then each of the paragraphs from 9 to 25 (inclusive) be struck out because they are “in many respects” difficult to understand, introduce irrelevant religious matters and are in a narrative form. The issues said to give rise to the power to strike out the paragraphs of the defence are not identified with any precision.
I accept that parts of paragraph 17 (wherein Mr Tham complains about the conduct of the lawyer and introduces religious dogma) are irrelevant, unfocussed and scandalous. Those passages should be struck out. Paragraph 17 otherwise contains an articulation of the relevant exchanges between the parties which touch upon issues in this cause of action.
Further, paragraph 24 introduces irrelevant personal matters and should also be struck out.
Otherwise, in the absence of any particularity as to the matters said to warrant striking out, in my view the other paragraphs complained of are sufficiently relevant to the issues raised in the Statement of Claim and articulate what Mr Tham says about them such that I can see no basis for striking them out. Or at least the plaintiff has failed to persuade me that they should be struck out.
The application to strike out the defence filed by the defendants on 22 May 2024 is allowed only to the extent of striking out the contents of paragraph 17 identified above, and paragraph 24. Otherwise, the application is dismissed.
Orders
1.The application for summary judgment is dismissed.
2.The application to strike out paragraphs of the first and second defendants’ Defence filed on 22 May 2024 is allowed only to the extent of striking out the contents of paragraph 17 identified above, and paragraph 24. Otherwise, the application is dismissed.
3.I make no order as to costs.
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