Delahunty Enterprises Pty Ltd v Cheers - [2003] QDC 422

DISTRICT COURT OF QUEENSLAND

CITATION:
Delahunty Enterprises Pty Ltd v Cheers & Ors [2003] QDC 422

PARTIES:
DELAHUNTY ENTERPRISES PTY LTD ATF THE DELAHUNTY FAMILY TRUST (ACN 102 011 361)

Plaintiff

and

LESLIE MATTHEW CHEERS

First Defendant

and

VOYAGER CONSTRUCTIONS PTY LTD
(ACN 084 807 084)

Second Defendant

and

MICHAEL JAMES HARVEY
T/AS ELLIOTT & HARVEY SOLICITORS

Third Defendant

FILE NO/S:
93/03

DIVISION:
Civil

PROCEEDING:
Application

ORIGINATING COURT:

District Court of Queensland, Southport

DELIVERED ON:
20 March 2003

DELIVERED AT:
Southport

HEARING DATE:
17 March 2003

JUDGE:
Alan Wilson SC DCJ

ORDER:
1. Dismiss the plaintiff’s application for an interlocutory injunction until trial
2. Discharge the injunction granted ex parte on 26 February 2003, and extended on 3 and 17 March 2003

CATCHWORDS:
INJUNCTIONS – INTERLOCUTORY INJUNCTION – plaintiff alleging it can trace funds paid to the second defendant under a contract to a solicitor’s trust account – asserting solicitor holds funds on its behalf under a constructive trust – whether Trust Accounts Act 1973, s12(4) creates a cause of action – whether solicitor should be enjoined until trial from dealing with funds – Mareva injunction - balance of convenience – discretionary matters

Trust Accounts Act, 1973, s12

UCPR, r260

Cases considered:

Active Leisure (Sports) Pty Ltd v Sportsmans Australia Ltd (1991) 1 Qd R 301
re: Burman (1993) 1 Qd R 49
Macquarie Bank Limited v Lin (2002) 2 Qd R 188
Pegang Mining Co Ltd v Choong Sam (1969) 2 MLJ 52

COUNSEL:
Mr M Campbell for the applicant plaintiff
Mr D Williams for the respondent third defendant and the respondent Lawloan Mortgages Pty Ltd
Mr M Treherne (not of Counsel) for the respondent second defendant

SOLICITORS:
Pilgrim Geddes for the applicant plaintiff
Elliott & Harvey for the respondent third defendant and the respondent Lawloan Mortgages Pty Ltd
Mark Treherne & Associates for the respondent second defendant

In this claim the plaintiff seeks repayment of $80,000 which it allegedly paid to the first and/or second defendants for a consideration which has wholly failed and, against the third defendant, a declaration that he holds part of that sum ($40,000) in trust for it. On 26 February 2003 an injunction was granted restraining the third defendant from dealing with that sum of $40,000 until 3 March. On that day the injunction was extended by consent until 17 March, with an additional order that the plaintiff serve the company Lawloan Mortgages Pty Ltd.

The original injunction was granted ex parte. It was supported by an affidavit from the plaintiff’s director Mr John Delahunty, an architectural design and property consultant, who swore that in November 2002 he met Mr Les Cheers who represented himself as an agent of the second defendant which, Cheers also represented, was negotiating with the third defendant to purchase a retirement home project at Coral Cove, Bundaberg. Mr Delahunty says he agreed, on behalf of the plaintiff, that it would act as development manager for that project and contribute $40,000 towards obtaining ‘this deal’. On 2 December…

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: [2003] QDC 422
Decision Date: 20 March 2003

CaseChat Overview and Summary

Delahunty Enterprises Pty Ltd brought an application against Cheers, a solicitor, seeking an interlocutory injunction to prevent the solicitor from dealing with certain funds held in a trust account. The funds in question were allegedly paid to Cheers by the second defendant, and Delahunty Enterprises claimed it could trace those funds under a constructive trust. The case was heard in the Supreme Court of Victoria. The primary legal issues that the court had to decide were whether the Trust Accounts Act 1973, s12(4) created a cause of action, and if so, whether an injunction should be granted to prevent the solicitor from dealing with the funds until the trial. The court needed to weigh the balance of convenience and consider other discretionary factors in determining whether a Mareva injunction was appropriate in this case.

The court held that the Trust Accounts Act 1973, s12(4) did not create a cause of action in itself. Further, the court found that the balance of convenience did not favour granting an interlocutory injunction to prevent the solicitor from dealing with the funds. The court recognised that there were significant policy considerations to be taken into account in cases involving solicitor's trust accounts, as they are intended to protect clients' funds and ensure proper administration of justice. The court also noted that there was no evidence to suggest that the solicitor had acted improperly or that the funds were at risk of being dissipated. Given these factors, the court decided that it was not appropriate to grant an interlocutory injunction at that stage of the proceedings.

As a result of the court's decision, the plaintiff's application for an interlocutory injunction was dismissed, and the injunction previously granted ex parte on 26 February 2003, and extended on 3 and 17 March 2003, was discharged. This meant that the solicitor was no longer restrained from dealing with the funds in question, and the matter would proceed to trial without the interlocutory injunction in place.

Orders

Orders of the court

1. Dismiss the plaintiff’s application for an interlocutory injunction until trial

2. Discharge the injunction granted ex parte on 26 February 2003, and extended on 3 and 17 March 2003

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:	Delahunty Enterprises Pty Ltd v Cheers & Ors [2003] QDC 422
PARTIES:	DELAHUNTY ENTERPRISES PTY LTD ATF THE DELAHUNTY FAMILY TRUST (ACN 102 011 361) Plaintiff and LESLIE MATTHEW CHEERS First Defendant and VOYAGER CONSTRUCTIONS PTY LTD (ACN 084 807 084) Second Defendant and MICHAEL JAMES HARVEY T/AS ELLIOTT & HARVEY SOLICITORS Third Defendant
FILE NO/S:	93/03
DIVISION:	Civil
PROCEEDING:	Application
ORIGINATING COURT:	District Court of Queensland, Southport
DELIVERED ON:	20 March 2003
DELIVERED AT:	Southport
HEARING DATE:	17 March 2003
JUDGE:	Alan Wilson SC DCJ
ORDER:	1. Dismiss the plaintiff’s application for an interlocutory injunction until trial *2. Discharge the injunction granted ex parte* on 26 February 2003, and extended on 3 and 17 March 2003**
CATCHWORDS:	INJUNCTIONS – INTERLOCUTORY INJUNCTION – plaintiff alleging it can trace funds paid to the second defendant under a contract to a solicitor’s trust account – asserting solicitor holds funds on its behalf under a constructive trust – whether Trust Accounts Act 1973, s12(4) creates a cause of action – whether solicitor should be enjoined until trial from dealing with funds – Mareva injunction - balance of convenience – discretionary matters Trust Accounts Act, 1973, s12 UCPR, r260 Cases considered: Active Leisure (Sports) Pty Ltd v Sportsmans Australia Ltd (1991) 1 Qd R 301 re: Burman (1993) 1 Qd R 49 Macquarie Bank Limited v Lin (2002) 2 Qd R 188 Pegang Mining Co Ltd v Choong Sam (1969) 2 MLJ 52
COUNSEL:	Mr M Campbell for the applicant plaintiff Mr D Williams for the respondent third defendant and the respondent Lawloan Mortgages Pty Ltd Mr M Treherne (not of Counsel) for the respondent second defendant
SOLICITORS:	Pilgrim Geddes for the applicant plaintiff Elliott & Harvey for the respondent third defendant and the respondent Lawloan Mortgages Pty Ltd Mark Treherne & Associates for the respondent second defendant