Editshare Asia Pacific Pty Ltd v Miles - [2018] QSC 68

SUPREME COURT OF QUEENSLAND

CITATION:

Editshare Asia Pacific Pty Ltd & Anor v Miles & Anor [2018] QSC 68

PARTIES:

EDITSHARE ASIA PACIFIC PTY LTD (ACN 154 348 517) (IN LIQUIDATION)

(First Plaintiff and Applicant)
and
PETER ANTHONY LUCAS
(Second Plaintiff)

v
DAMIAN MILES

(First Defendant and Respondent)
and
EDITSHARE AUSTRALIA PTY LTD (ACN 168 223 952)
(Second Defendant)

FILE NO/S:

615 of 2016

DIVISION:

Trial

PROCEEDING:

Application (in a Claim)

ORIGINATING COURT:

Supreme Court at Cairns

DELIVERED ON:

6 April 2018

DELIVERED AT:

Cairns

HEARING DATES:

19 January 2018 and 23 February 2018

JUDGE:

Henry J

ORDERS:

1.   Application dismissed.

2.   Paragraph 41 of the further amended defence of the first defendant is struck out.

3.   The first defendant will file and serve a further further amended defence which properly pleads to paragraph 41 of the amended statement of claim within 28 days hereof.

4.   The costs of the application are reserved.

CATCHWORDS:

PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PRACTISE UNDER RULES OF COURT – SUMMARY JUDGMENT – where plaintiff brought application for summary judgment against first defendant– whether plaintiff satisfied Court that defendant had no real prospect of success and that there is no need for a trial

PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PROCEDURE UNDER UNIFORM CIVIL PROCEDURE RULES AND PREDECESSORS – PLEADING – DEFENCE AND COUNTERCLAIM – where the defendant filed inadequate pleadings – where material facts not pleaded – where inadequate reasons for denial of pleaded allegation – whether pleading should be struck out

Uniform Civil Procedure Rules 1999 (Qld), r 149, r 157(a), r 171, r 292(2)

LCR Mining Group Pty Ltd v Ocean Tyres Pty Ltd [2011] QCA 105, followed

COUNSEL:

C J Eylander for respondent

SOLICITORS:

Connolly Suthers for applicant

Cronin Litigation for respondent

The applicant first plaintiff (“the plaintiff company”) seeks summary judgment on part of its claim as against the respondent first defendant (“Mr Miles”).
Background
On 7 March 2014 the plaintiff company was ordered to be wound up in insolvency and the second plaintiff was appointed liquidator. The application for the order was filed on 31 January 2014 (“the relation back day”) and was founded upon the plaintiff company’s failure to pay a creditor’s statutory demand by the Australian Tax Office of 10 October 2013.
The plaintiffs’ claim before the Supreme Court in Cairns alleges that after the relation back day but before the winding-up order, the second defendant, a company which assumed a similar name to the plaintiff company, acquired the business of the plaintiff company without the passing of consideration. The amended statement of claim alleges related misconduct, including by Mr Miles, the sole director, secretary and shareholder of both the plaintiff and defendant companies.
Of more specific relevance to the present application, the amended statement of claim pleads at paragraph 41 that an amount of $427,384.02 is owed as a debt by Mr Miles, which amount is claimed as monies due and owing (“the director’s…

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: [2018] QSC 68
Decision Date: 6 April 2018

CaseChat Overview and Summary

In the case of Editshare Asia Pacific Pty Ltd v Miles, the plaintiff company sought summary judgment against the first defendant, Mr Miles, on a part of its claim relating to a director’s loan. The plaintiff company, having been wound up in insolvency, sought to recover monies it alleged were owed by Mr Miles, who was the sole director, secretary, and shareholder of both the plaintiff and a related company. The court was required to determine whether the plaintiff had satisfied the requirements of rule 292(2) of the Uniform Civil Procedure Rules 1999 (Qld) by demonstrating that Mr Miles had no real prospect of successfully defending the claim and that there was no need for a trial.

The court examined the plaintiff's records, which suggested a debt of $427,384.02 was owed by Mr Miles. However, the court also needed to consider whether Mr Miles had an adequate defence or counterclaim that could succeed. The primary issue was whether the plaintiff had established with sufficient certainty that the debt was owed by Mr Miles, as distinct from the trustee of his family trust, and whether Mr Miles had a viable defence to the claim. The court found that the plaintiff had not fully satisfied the requirement of showing that there was no need for a trial, as there were material facts not pleaded and inadequate reasons for denying the pleaded allegation. Consequently, the court dismissed the application for summary judgment.

In addition to dismissing the application, the court struck out paragraph 41 of the first defendant’s defence as inadequate. The court ordered that Mr Miles file and serve a further amended defence properly addressing paragraph 41 of the amended statement of claim within 28 days. The costs of the application were reserved, leaving the parties to bear their own costs for the proceedings so far.

Orders

Orders of the court

1. Application dismissed.

2. Paragraph 41 of the further amended defence of the first defendant is struck out.

3. The first defendant will file and serve a further further amended defence which properly pleads to paragraph 41 of the amended statement of claim within 28 days hereof.

4. The costs of the application are reserved.

Background

Background to the litigation

The applicant first plaintiff (“the plaintiff company”) seeks summary judgment on part of its claim as against the respondent first defendant (“Mr Miles”).Background On 7 March 2014 the plaintiff company was ordered to be wound up in insolvency and the second plaintiff was appointed liquidator. The application for the order was filed on 31 January 2014 (“the relation back day”) and was founded upon the plaintiff company’s failure to pay a creditor’s statutory demand by the Australian Tax Office of 10 October 2013. The plaintiffs’ claim before the Supreme Court in Cairns alleges that after the relation back day but before the winding-up order, the second defendant, a company which assumed a similar name to the plaintiff company, acquired the business of the plaintiff company without the passing of consideration. The amended statement of claim alleges related misconduct, including by Mr Miles, the sole director, secretary and shareholder of both the plaintiff and defendant companies. Of more specific relevance to the present application, the amended statement of claim pleads at paragraph 41 that an amount of $427,384.02 is owed as a debt by Mr Miles, which amount is claimed as monies due and owing (“the director’s loan claim”). The Application The plaintiff company has applied for summary judgment on that part of its claim which is the director’s loan claim. To succeed it must, pursuant to rule 292(2) Uniform Civil Procedure Rules 1999 (Qld), satisfy the court that:“(a) the defendant has no real prospect of successfully defending … [the] part of the plaintiff’s claim; and(b) there is no need for a trial of … the part of the claim …” (emphasis added)The need for combined satisfaction of limbs (a) “and” (b) above must not be overlooked. The words “no real prospect of succeeding” in limb (a) are to be applied in conjunction with the requirement, in limb (b), of satisfaction that there is no need for a trial, so as to ensure before any summary intervention that there is a high degree of certainty that a respondent would have no real prospect of succeeding if the case were allowed to go to trial in the ordinary way.[1][1] LCR Mining Group Pty Ltd v Ocean Tyres Pty Ltd [2011] QCA 105, [26]-[30].The Applicant’s Critical Inference The director’s loan claim is premised upon the plaintiff company’s own records apparently recording the amount of $427,384.02 as a debt owing to the plaintiff company by the trustee of Mr Miles’ family trust, which paid the money to Mr Miles. Despite demand by the liquidator, Mr Miles has not repaid the money. The records of this debt are pleaded by way of particulars as being the plaintiff company’s balance sheet and a transaction ledger. The balance sheet as at 30 April 2014 records under current liabilities:“Equity – Miles Family ES Trust ($427,384.02)”.The bracketing of the amount, read with the rest of the document and consistent with common bookkeeping practice, supports an inference the liability is in the negative, that is, it is an amount owing to the plaintiff company. That inference (“the critical inference”) is essential to the success of this part of the claim. The inference that the alleged debt is in truth owed by Mr Miles, as distinct from the trustee of his family trust, is also essential to proof of the director’s loan claim but it is unnecessary to focus further upon it for present purposes.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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CITATION:	Editshare Asia Pacific Pty Ltd & Anor v Miles & Anor [2018] QSC 68
PARTIES:	*EDITSHARE ASIA PACIFIC PTY LTD (ACN 154 348 517) (IN LIQUIDATION)* (First Plaintiff and Applicant) and PETER ANTHONY LUCAS (Second Plaintiff) v *DAMIAN MILES* (First Defendant and Respondent) and EDITSHARE AUSTRALIA PTY LTD (ACN 168 223 952) (Second Defendant)
FILE NO/S:	615 of 2016
DIVISION:	Trial
PROCEEDING:	Application (in a Claim)
ORIGINATING COURT:	Supreme Court at Cairns
DELIVERED ON:	6 April 2018
DELIVERED AT:	Cairns
HEARING DATES:	19 January 2018 and 23 February 2018
JUDGE:	Henry J
ORDERS:	1. Application dismissed. 2. Paragraph 41 of the further amended defence of the first defendant is struck out. 3. The first defendant will file and serve a further further amended defence which properly pleads to paragraph 41 of the amended statement of claim within 28 days hereof. 4. The costs of the application are reserved.
CATCHWORDS:	PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PRACTISE UNDER RULES OF COURT – SUMMARY JUDGMENT – where plaintiff brought application for summary judgment against first defendant– whether plaintiff satisfied Court that defendant had no real prospect of success and that there is no need for a trial PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PROCEDURE UNDER UNIFORM CIVIL PROCEDURE RULES AND PREDECESSORS – PLEADING – DEFENCE AND COUNTERCLAIM – where the defendant filed inadequate pleadings – where material facts not pleaded – where inadequate reasons for denial of pleaded allegation – whether pleading should be struck out Uniform Civil Procedure Rules 1999 (Qld), r 149, r 157(a), r 171, r 292(2) LCR Mining Group Pty Ltd v Ocean Tyres Pty Ltd [2011] QCA 105, followed
COUNSEL:	C J Eylander for respondent
SOLICITORS:	Connolly Suthers for applicant Cronin Litigation for respondent