Famestock Pty Ltd v Schweitzer

[2009] QDC 65

[2009] QDC 65

DISTRICT COURT

CIVIL JURISDICTION

JUDGE ROBIN QC

Claim No 306 of 2008

FAMESTOCK PTY LIMITED ACN 010 499 939	Applicant(Plaintiff)
and
SCHWEITZER and OTHERS	Respondents(Defendants)

CAIRNS

..DATE 19/03/2009

JUDGMENT

Catchwords:

Uniform Civil Procedure Rules 150(1),(4) - summary judgment application would not have been brought had the defence pleaded the issues now relied on - application dismissed with the plaintiff's costs at costs in the cause.

HIS HONOUR:  This is an application for summary judgment by the plaintiff, represented by Mr Morzone.  On receiving information regarding the alleged "triable issues", which is now encapsulated in the outline of submissions prepared by Mr Jonsson for the defendants, he apprehended that the Court was unlikely to order summary judgment.  The triable issues set out in that document range beyond those which emerged from the pleadings.  Mr Morzone's apprehension was well-founded, as the defendants ought to have an opportunity to run the points which Mr Jonsson has now identified, some of which are potentially quite difficult questions of interpretation.

The scope of issues in the case had already been expanded beyond those discernable from the pleadings in the affidavit of Ms Schweitzer, filed on the 12th of March 2009, in response to the application which was filed on the 27th of January.  Mr Morzone began his submissions, which were essentially directed to persuading the Court to order, although the summary judgment application was almost certain to be dismissed, that the defendants pay the costs of it.  He referred to the standard basis later on. 

The broad proposition he makes is that the trouble and cost of bringing the application would never have been incurred by the plaintiff if the issues in the proceeding had been made to appear different by a properly pleaded defence, as required by the UCPR, he referred to rule 150, paragraphs (1)(m) and (n), and paragraph (4), as indicating pleading obligations which he says the defendants are now shown to be in breach of.

I'd interrupted my own train of thought here, having intended to refer to Mr Morzone's beginning by describing the statement of claim, which was not his document, as narrowly drawn.  That is indeed the case.  It's based on a loan agreement between the parties said to have been made on or about the 28th of July 2006, which, as pleaded, required payment of sums of $50,000 on or about 31st of October in 2007, 2008 and 2009.  The claim was essentially for $100,000 plus some arrears of interest. 

The three payments of $50,000 each, it now emerges, are but three of eight, which the plaintiff was or might become entitled to under two separate agreements, one of which is described as a sale agreement, and provided for two payments of $50,000.  The loan agreement provided for six, three of which were characterised as loan payments, three as termination payments.

The only reason assigned in the defence for resisting the claim, the allegations of the statement of claim essentially being admitted, was that the loan agreement provided as follows in clause 5.3:

In the event that at any time prior to the payment of final Instalment of the Termination Payment, the Business no longer manages and lets the below lots for the respective periods set out below, the the Termination Payment shall be reduced by the sum set out respectively:

5.3.1  Lot 9 -    $25,000.00 (for the entire duration
  of this agreement)

5.3.2  Lot 2  -    $25,000.00 (for the first two (2)
  years of this Agreement)

5.3.3  Lot 16 -    $50,000.00  (for the entire duration
  of this Agreement)

The obligation and onus to ensure that Lot 9, Lot 2 and
Lot 16 are let by the Business as part of the on-site
Letting pool (and that the owners of such lots enter into
The standard Letting Appointments used by Med Pty Ltd, the Med Unit Trust or any other licensed operator of the Business) shall rest with Famestock and McEvoy.

….and that from on or about December 2006, the business no longer managed and let lots 9, 2 and 16. 

It is common ground that in respect of one of those units identified as owned by the son of Mr McEvoy, the plaintiff's principal and deponent, that unit has always been available.

In respect of one or both of the others, it's suggested by the Schweitzer affidavit that there are issues, in particular that one of them is effectively derelict and, even if made available for letting, is not lettable.  The other complication is that the defendants no longer run the letting business in the relevant resort development at Port Douglas.

It's perhaps unclear what points are being made by the pleaded defence, whether something is being made of the defendants no longer being part of the letting business, or whether the argument is that whoever is operating that business, lots 9, 2 and 16, have not, as a group, been made available to it.
The plaintiff's contention is that all three have been made available, and Mr McEvoy deposes to that. 

There's obviously a question as to how to deal with a situation of only one or two of the three lots continuing to be let.  The consequence might be that everything is still payable, or that nothing is payable.  Mr Jonsson's submissions essay an apportionment which, if the calculation is right, would reduce the amount essentially in issue from $100,000 or thereabouts to $75,000 or thereabouts.

It might be convenient to interpolate at this point that given that the dispute concerns commercial differences and that the amount of the dispute is relatively modest, means of resolution outside the Court might usefully be attempted.  Given the lack of support for Mr Morzone's suggestion along those lines from Mr Jonsson, who is without instructions, to assist him in this specific regard. I don't think the Court ought to send parties to ADR.  The parties no doubt, will reflect on the potential usefulness of it.

I agree with Mr Morzone's submission that the pleaded defence fails to set out the issues which the defendants really wish to raise and, in that sense, served to encourage the plaintiff to make this application. I think in modern conditions the Court tends to favour the procedures provided for in rules 292 and 293 as a way of achieving finality in litigation earlier rather than later.  That finality can't be achieved today in this proceeding.

I accept, from Mr Morzone, that the rules provide a sanction by way of costs orders that may be seen as punitive for non-compliance with the rules.  I think the appropriate costs order, however, is not one that the defendants pay as clients costs of this application in any event.  Minds may well differ about this.  My approach has always tended to be that a plaintiff who comes into the Court and brings the defendant unwillingly before the Court obtains something of an indulgence by the applicability of rules that force the defendant to play the game, so to speak.

If, at the end of the day, it emerges that the plaintiff's claim was not well founded, in my opinion it can seem unsatisfactory that a defendant who was never truly under any liability to the plaintiff should be mulcted in costs, even if delinquent in some respects in his, her or its performance.

I propose to dismiss the plaintiff's summary judgment application, but order that the plaintiff's costs of its application be its costs in the cause.

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