Essex Securities Pty Ltd v Lunt
[2004] WASC 113
ESSEX SECURITIES PTY LTD -v- LUNT & ANOR [2004] WASC 113
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2004] WASC 113 | |
| Case No: | CIV:1611/2001 | 21 NOVEMBER 2003, 8 MARCH & 20 APRIL 2004 | |
| Coram: | MASTER NEWNES | 27/05/04 | |
| 10 | Judgment Part: | 1 of 1 | |
| Result: | Application dismissed | ||
| B | |||
| PDF Version |
| Parties: | ESSEX SECURITIES PTY LTD WILLIAM TREVOR LUNT LOIS ANN LUNT |
Catchwords: | Practice and procedure Application by defendants for summary judgment Turns on own facts |
Legislation: | Rules of the Supreme Court 1971 (WA), O 16 r 1 |
Case References: | Eng Mee Yong v Letchumanan [1980] AC 331 Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87 Gillon & Ors v Kyle, unreported; FCt SCt of WA; Library No 9123; 16 October 1991 Hunt v Knable (No 2) (1992) 8 WAR 96 Webster v Lampard (1993) 177 CLR 598 White v Johnston (1886) 8 ALT 53 Nil |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
WILLIAM TREVOR LUNT
LOIS ANN LUNT
Defendants
Catchwords:
Practice and procedure - Application by defendants for summary judgment - Turns on own facts
Legislation:
Rules of the Supreme Court1971 (WA), O 16 r 1
Result:
Application dismissed
(Page 2)
Category: B
Representation:
Counsel:
Plaintiff : Mr M R Cuerden
Defendants : Mr B W Duckham
Solicitors:
Plaintiff : Camillo D'Angelo & Co
Defendants : B W Duckham & Co
Case(s) referred to in judgment(s):
Eng Mee Yong v Letchumanan [1980] AC 331
Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87
Gillon & Ors v Kyle, unreported; FCt SCt of WA; Library No 9123; 16 October 1991
Hunt v Knable (No 2) (1992) 8 WAR 96
Webster v Lampard (1993) 177 CLR 598
White v Johnston (1886) 8 ALT 53
Case(s) also cited:
Nil
(Page 3)
1 MASTER NEWNES: This is an application by the defendants for leave to bring an application for summary judgment and for summary judgment against the plaintiff. The application for judgment is well out of time under O 16 r 1 of the Rules of the Supreme Court1971 (WA). The writ of summons was issued on 8 May 2001 and a statement of claim filed and served on 8 August 2001. The defendants filed their defence on 31 August 2001. The application for judgment was filed by the defendants on 14 April 2003. The defendants seek leave to bring the application on the basis that the foundation for it is material which has only recently become available.
2 The issues in the action are relatively simple. The plaintiff claims that in June 1990 an agreement was made between Mr Briggs, acting on its behalf, and Mr Lunt, acting on behalf of the defendants, that the plaintiff would advance money to the defendants, who would repay that money on demand. Between June 1990 and an unknown date, but some time after October 1996, a total amount of $426,800 was lent by the plaintiff to the defendants. The plaintiff made demand for that sum on 19 March 2001, but it has not been repaid.
3 In their defence, filed on 31 August 2001, the defendants admit the money was advanced, but say that it was not advanced to the defendants, but was advanced to the first-named defendant ("Mr Lunt"), in his then capacity as managing director of WRS Pacific Pty Ltd ("WRS Pacific"), to fund the activities of WRS Pacific. The defendants say that the advances were so documented and recorded in the annual accounts of WRS Pacific. They deny any personal liability to repay the funds.
4 In support of the application for summary judgment, an affidavit of Mr Lunt, sworn on 15 April 2003, was filed. In that affidavit Mr Lunt refers to proceedings in the District Court involving WRS Pacific, which he says is controlled by Mr Briggs. Mr Lunt says that in that case, on 12 March 2003, Mr Briggs gave evidence that he was "a director/secretary/substantial shareholder of WRS Pacific Pty Ltd". Mr Lunt says that Mr Briggs went on to say:
"Trevor hadn't been involved of course with my company for 2 years and there was no outstanding indebtedness between us and there was no ongoing conversation."
5 According to Mr Lunt, Mr Briggs' evidence related to a meeting between Mr and Mrs Lunt and Mr Briggs on November 1998 concerning sums of money that Mr and Mrs Lunt contended were due to them.
(Page 4)
6 Mr Lunt says in his affidavit that Mr Briggs' evidence "is capable of referring to and including the plaintiff as frequently Mr Briggs referred to the plaintiff and WRS Pacific Pty Ltd as one and the same entity" [emphasis added]. I understood I was to infer that the "Trevor " mentioned in the evidence was Mr Lunt.
7 No other evidence was sought to be adduced by the defendants in relation to the District Court proceedings and no transcript of the evidence given by Mr Briggs was put in evidence.
8 In an affidavit sworn on 16 July 2003 Mr Briggs says that, so far as he recalls, the evidence referred to by Mr Lunt was in response to questions concerning Mrs Lunt's claim against WRS Pacific for wages. Mr Briggs says his evidence was to the effect that there had been no meeting of the sort claimed by Mr and Mrs Lunt and that, in any event, there was no indebtedness of WRS Pacific to them.
9 Quite apart from Mr Briggs' affidavit in response, I do not think any weight can be given to the isolated snippets of evidence deposed to by Mr Lunt, evidence which was given, moreover, in proceedings involving a different company to the present plaintiff.
10 A number of other affidavits were sought to be relied on by the defendants in support of the application for summary judgment. Reference was made to an affidavit of Mr Briggs sworn on 1 November 2001 in opposition to an application for security for costs made by the defendants. Annexed to that affidavit was a balance sheet of the plaintiff as at 30 June 2001. No reference is made in the balance sheet to any liability of the defendants to the plaintiff. It was submitted on behalf of the defendants that that was compelling evidence that there had been no loans to the defendants personally. I should say, however, that on the other hand the balance sheet also did not appear to show any funds having been advanced to WRS Pacific.
11 The defendants also relied on an affidavit of Kevin Bond, a chartered accountant and the secretary of WRS Pacific from June 1991 to November 1996. Mr Bond was also an alternate director of that company from June 1991 to June 1992 and a director from June 1992 to November 1996. Mr Bond maintained the general ledger and prepared the annual financial statements of WRS Pacific from the financial year ended 30 June 1991 to the financial year ended 30 June 1994. He says that when he resigned as a director and secretary the financial statements for the year ended 30 June 1995 were in draft form. The audit had not been finalised.
(Page 5)
12 Mr Bond says that all funds paid by the plaintiff relating to operating expenses of WRS Pacific were recorded by Mr Czechkowski, whom he believed to be the plaintiff's accountant. Following the end of each financial year Mr Czechkowski provided WRS Pacific with a schedule of the payments, which were then recorded in the general ledger of WRS Pacific and shown as loan funds provided to it by Natural Resource Finance Pty Ltd. The latter was a company related to the plaintiff. As part of the financial year-end audit process, each year the balance of the loan account was confirmed in writing by Natural Resources Finance Pty Ltd to the auditors of WRS Pacific. The connection between Natural Resource Finance Pty Ltd and the plaintiff remained unexplained, as did the accounting treatment which led to the loan funds being shown as provided by Natural Resources Finance Pty Ltd.
13 Mr Bond goes on to say that he has no knowledge of funds being loaned by the plaintiff to the defendants.
14 In an affidavit sworn on 7 July 2003 in support of the application, Mr Lunt annexed a letter of apology dated 22 May 2000 to him from Mr Briggs. It was submitted on behalf of the defendants that such an apology would not have been offered in the terms it was if Mr Lunt was indebted to Mr Briggs or to any entity related to Mr Briggs.
15 The letter is, in its terms, a personal letter from Mr Briggs to Mr Lunt. There is no reference to the plaintiff. In the letter Mr Briggs apologises "for the unfortunate way I have treated you since March 1998". He goes on:
"I regret the manner and circumstances in which your employment contract was terminated with Max Resources Ltd.
We have known each other for more than 30 years during which time I have no cause to complain about you in any shape or form.
Please accept this apology in the spirit of our reconciliation as I'm looking forward to a new future together."
16 There is no evidence as to the circumstances in which the letter came to be written to Mr Lunt.
17 An affidavit of one Brenton Scott Siviour sworn 11 July 2003 was also filed in support of the application. Mr Siviour is a chartered accountant. He describes himself as a specialist forensic accountant with
(Page 6)
- more than 15 years' experience. Mr Siviour says he has examined the balance sheet of the plaintiff for the year ended 30 June 2001. Mr Siviour opines that if the alleged debt of $426,800.97 was a receivable, the plaintiff had a duty to disclose it as an asset of the company in its balance sheets.
18 An affidavit of Mr Czechkowski sworn 28 October 2003 has been filed on behalf of the plaintiff in opposition to the application. In it Mr Czechkowski says that he has been the accountant for the plaintiff since 3 January 1987 and is familiar with its financial position. He says he has been preparing the financial statements for the plaintiff since that date. According to Mr Czechkowski, from 30 June 1990 the plaintiff made various advances to the defendants. He goes on to say that these advances were recorded in the accounts for the plaintiff against the loan account of Natural Resource Finance Pty Ltd.
19 In response to Mr Siviour's affidavit, Mr Czechkowski says that the advances to the defendants were recorded against the loan account of Natural Resource Finance Pty Ltd. In response to Mr Lunt's affidavit of 24 March 2003 Mr Czechkowski says that the balance sheet of the plaintiff for the financial year ended 30 June 2001, annexed to Mr Briggs' affidavit sworn 1 November 2001, does not include the money advanced to the defendants "because it is only the first page of the accounts. I believe that there are subsequent pages which contain the loans".
20 Once again, it is not clear how Natural Resource Finance Pty Ltd was involved in the transaction or why the loans are recorded against its loan account. I might observe that in the balance sheet (or on Mr Czechkowski's evidence, that part of the balance sheet) annexed to Mr Briggs' affidavit of 1 November 2001 there is no reference in the assets of the plaintiff to moneys owing to it by Natural Resource Finance Pty Ltd or WRS Pacific.
21 In an affidavit sworn on 28 October 2003 Mr Briggs takes issue with a number of statements made in earlier affidavits of Mr Lunt. Relevantly, Mr Briggs contends that it was "always understood" that the moneys advanced by the plaintiff would be repaid by the defendants. He says that Mr Lunt was making money on the sale of equipment to certain joint-venture partners and Mr Lunt's overseas accommodation and related expenses were being paid by WRS Pacific. He says that Mr Lunt was to repay the moneys advanced to him by the plaintiff "out of profits of the venture and if there were no profits then on demand. As there were no profits, the plaintiff made demand and on not receiving payment, the
(Page 7)
- plaintiff issued the proceedings". In response to Mr Siviour's affidavit, Mr Briggs says that there is no loan account shown in the balance sheet of the plaintiff because "all funds were channelled through the Natural Resource Finance Pty Ltd loan account so that WRS Pacific Pty Ltd only owed money to one entity". Notwithstanding this, all cheques were drawn by the plaintiff.
22 In a further affidavit sworn on 6 November 2003, Mr Briggs says that he agreed to the plaintiff advancing funds to the defendants to enable them to participate in a venture to build factories in various countries in South-East Asia and South Asia to pelletise chicken manure for sale as fertiliser. He says it was agreed that the advances to them would be a loan, to be repaid on demand. If the ventures were profitable, then the repayments would be made out of Mr Lunt's share of the profits. He says that because he and Mr Lunt were friendly, he did not have the arrangement committed to writing.
23 A further affidavit of Mr Lunt, sworn 5 November 2003, was filed in support of the application for judgment. In that affidavit Mr Lunt refers to an inspection of cheque butts that have been discovered by the plaintiff. Mr Lunt says that photocopies of the inspected cheque butts had been requested but, at the date of his affidavit, had not been provided. Mr Lunt says, however, that the cheque butts are all endorsed " … re RWS".
24 Mr Lunt also says that, although after he had ceased his involvement with WRS Pacific he had frequent contact with Mr Briggs, it was never suggested that Mr Lunt or his wife were indebted to the plaintiff. Mr Lunt claims that no demand was made for the moneys until the defendants commenced proceedings against the plaintiff and Mr Briggs. Mr Lunt says that the current action is an attempt to complicate and frustrate those proceedings.
25 An affidavit of Robert Michael John Skidmore, who was a director of WRS Pacific from June 1991 to December 1996, was filed on behalf of the defendants. In that affidavit, sworn on 23 April 2003, Mr Skidmore says that he has no knowledge of any indebtedness of the defendants to the plaintiff and says he would have expected to have known about it because of his close relationship with Mr Briggs. Mr Skidmore says he was told by Mr Briggs that the claim against the defendants was brought simply to frustrate and complicate litigation brought by the defendants against WRS Pacific.
(Page 8)
26 Mr Briggs specifically denies saying any such thing, but, more significantly, Mr Skidmore's evidence must be viewed in the light of an affidavit dated 24 October 2003, filed on behalf of the plaintiff, in which Mr Skidmore says that the statements in his affidavit of 23 April 2003 are false and he did not realise that they were contained in the affidavit when he swore it. Mr Skidmore says that Mr Lunt visited him in Indonesia in about April 2003 and requested him to sign various prepared affidavits in actions between Mr Briggs and/or his companies and the defendants. Mr Skidmore said he quickly read through the affidavits and refused to sign them on the grounds that they were incorrect. He says that the incorrect parts included the statements referred to above. Mr Lunt later returned with affidavits that Mr Skidmore assumed had been corrected. Mr Skidmore says that he signed them without reading them. He says he was startled when he learned that they still contained the material that he had earlier said was incorrect.
27 The principles to be applied an application of this sort were not in dispute. It is clear that the power to order summary judgment must be exercised with great care and should never be exercised unless it is clear that there is no real question to be tried: Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87. The need for exceptional caution is nowhere more important than where the ultimate outcome turns upon the resolution of some disputed issue or issues of fact: Webster v Lampard (1993) 177 CLR 598. It was never intended that when the facts are in dispute, actions should be disposed of summarily (White v Johnston (1886) 8 ALT 53) and a respondent's affidavit evidence should not be rejected because it is arguably inconsistent with documentary evidence adduced by the applicant: Gillon & Ors v Kyle, unreported; FCt SCt of WA; Library No 9123; 16 October 1991; Hunt v Knable (No 2) (1992) 8 WAR 96. But the Court is not bound to accept uncritically as raising a dispute of fact calling for further investigation every statement in an affidavit, however equivocal, lacking in precision or inconsistent with contemporary documents or other statements by the deponent: Eng Mee Yong v Letchumanan [1980] AC 331 at 341.
28 The defendants accordingly bear a high onus on this application. The plaintiff, by Mr Briggs, has said on oath that the moneys were advanced to the defendants personally, pursuant to an oral agreement made with Mr Lunt. The defendants have sought to demonstrate that that is not the case by the affidavit evidence of Mr Lunt and by reference to various documents that have been adduced in evidence in support of this application.
(Page 9)
29 I must say that much of the affidavit evidence was unsatisfactory and it is difficult, if not impossible, adequately to piece together the circumstances in which the parties respectively contend the advances were made. The reason that the alleged advances do not appear in the balance sheet of the plaintiff for 30 June 2001 was explained by statements about, on the one hand, other pages of the balance sheet being missing and, on the other, by references to the money being channelled through, and therefore recorded against the loan account of, Natural Resource Finance Pty Ltd. The balance sheet does not record any loans to WRS Pacific, Natural Resource Finance Pty Ltd or the defendants . No other balance sheets or other financial documents of the plaintiff, and no financial statements of Natural Resource Finance Pty Ltd, were produced in evidence by either side.
30 Although Mr Bond said in his affidavit, filed on behalf of the defendants, that moneys which were advanced to WRS Pacific would be shown in the loan accounts of that company, and be the subject of audit confirmation letters, none of that material was produced in evidence by the defendants. If there was any reason the defendants could not produce that material it was not deposed to.
31 Mr Bond, who was a director, the secretary and the person responsible for the preparation of the annual financial statements of WRS Pacific, does not depose to any recollection that the funds concerned were in fact advanced to WRS Pacific. Although he says he has no knowledge of loans being made by the plaintiff to the defendants, there is nothing to suggest that he would have, or was likely to have, been aware of those loans, if they had been made.
32 It appears from Mr Lunt's evidence that the cheque butts that have been discovered by the defendants are all endorsed "Re WRS". Mr Lunt's affidavit to that effect was filed only shortly before the hearing of the application. Objection to it was taken on that basis by counsel for the plaintiff, who declined the offer of an adjournment to answer the affidavit. Counsel for the plaintiff was not deterred from his objection by the fact that the plaintiff had filed and sought to rely on an affidavit sworn by Mr Briggs on 6 November 2003, the day following Mr Lunt's affidavit. I allowed both affidavits to be tendered.
33 It was submitted, on behalf of the defendants, that the endorsement on the cheque butts is strong evidence in support of Mr Lunt's contention that the funds were made available to him solely for the purposes of funding the activities of WRS Pacific.
(Page 10)
34 That may be the case but it is not, in my view, decisive, either of itself or taken with the other material put in evidence by the plaintiff. It clearly calls for explanation, but in the circumstances of this case I consider that is properly to be done at trial. This matter was raised late in the day and was the seventh affidavit filed on behalf of the defendants in support of this application over a period of some four months, in addition to other affidavits filed in the action upon which the defendants also relied. By that stage the plaintiff had already filed six affidavits in opposition to the application. Despite the volume of affidavit material it remained impossible, as I have said, to obtain a clear understanding of what each side contended were the circumstances in which the funds were advanced. It was evident that a continuing exchange of affidavits was not an appropriate way to resolve the matter. On the contrary, it merely served to emphasise that the case involved contested issues of fact that could not properly be resolved in this manner.
35 I do not think it is appropriate to comment at this stage on the merits of the plaintiff's claim, except to say that I am not satisfied to the requisite standard that the plaintiff's claim is unarguable. Too much remains unexplained, or inadequately explained, to entitle the defendants to judgment without trial.
36 I would, therefore, dismiss the application.
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