Floyd v Nevgold Pty Ltd (No 2)

[2024] QDC 230

DISTRICT COURT OF QUEENSLAND

CITATION:

Floyd v Nevgold Pty Ltd (No 2) [2024] QDC 230

PARTIES:

MALCOLM LEWIS FLOYD

(plaintiff)

v

NEVGOLD PTY LTD AS TRUSTEE OF BRIAN JORGENSEN FAMILY TRUST

(defendant)

FILENO:

109/23

DIVISION:

Civil

PROCEEDING:

Claim

ORIGINATING COURT:

District Court

DELIVEREDON:

15 November 2024 (ex tempore)

DELIVEREDAT:

Brisbane

HEARINGDATE:

15 November 2024

JUDGE:

Porter KC DCJ

ORDER:

1.   Leave to file a second further amended defence and counterclaim in the form exhibited to the affidavit of Ms Sakshi Bhati affirmed November 2024 is refused.

2.   Leave to make the amendment in paragraph 8(g) of the second further amended defence and counterclaim in the form exhibited in the affidavit of Ms Sakshi Bhati affirmed 15 November 2024 be granted, except insofar as it related to the “Third and Fourth Breaches”.

3.   The defendant pay the costs of the application filed today on the standard basis.

CATCHWORDS:

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COURT SUPERVISION – AMENDMENT – ORIGINATING PROCESS, PLEADINGS

ETC – where the defendant seeks to file a second further amended defence – where the application is brought one business day before the trial – where the defendant, a month before the trial, was granted leave to substantially amend the defence – where this further amendment sought today raises a new case of substance – where the defendant concedes most of

the documents required for the new case were produced to the defendant in September – where an adjournment of the trial

would be required should leave be granted – where the trial has been listed for nearly four months and is otherwise ready to proceed – where the defendant is not devoid of credible defences – whether leave to file the second further amended defence and counterclaim be granted

CASES:

Sellars v Adelaide Petroleum (1994) 179 CLR 332

LEGISLATION:

Property Occupations Act 2014 (Qld), s. 99(1)

COUNSEL:

C J Ryall for the plaintiff

J P Hastie for the defendant

SOLICITORS:

O’Reilly’s Stevens for the plaintiff Rostron Carlyle Rojas for the defendant

Timing of the application

1. This is an application by the defendant for leave to file a second further amended defence and counterclaim (SFADC). That application was brought on urgently because this matter is listed to commence for trial in the Cairns on Monday next week. The proposed pleading was therefore delivered one clear business day before the commencement of the trial.

2. This matter was listed for trial, at the latest, on the 23^rd of July 2024. There’s some indication on the file it might have been a week or two sooner than that, but I am going to rely on the date Mr Hastie, who appeared for the application, gave me.

3. It the best part of four months since the matter was set down for trial. The defendant had sought and obtained leave substantially to amend its defence by her Honour Judge Rosengren on 9 October 2024. That was a bit over a month before the trial. I do not have her Honour’s reasons before me, but in any event the result was the plaintiff was going ahead with the trial notwithstanding that leave being granted to amend quite close to the trial date.

4. According to the records, the further defence and counterclaim the subject of leave was filed on 18 October, and the plaintiff, with admirable alacrity, filed its reply and answer to that 24 October.

The proposed amended pleading

1. The amended pleading, which the defendant seeks leave to file, raises a new case of substance. The allegations are set out in paragraphs 18 to 21 of the proposed SFADC, as follows:

   Floyd undertook to act for OneFin

   18.Between, at least, March 2021 and July 2021, the plaintiff undertook to act, and acted, for OneFin to:

   (a)     assist it identifying land that it may be interested in purchasing in the Cairns region;

   Particulars of sub-paragraph (a)

   (i)Email from the plaintiff to Mitch Paul of OneFin dated 9 March 2021.

   (ii)Email from Mitch Paul of OneFin to the plaintiff dated 23 June 2021.

   (b)     make contact with Nevgold in respect of the purchase of the Properties; and

   (c)     present an offer to Nevgold for the purchase of the Properties; and

   (d)     engage in negotiations, or attempt to engage in negotiations, with Nevgold with respect to OneFin’s offer and the sale of the Properties to it.

   Particulars of sub-paragraphs (b) and (c)

   (i)Email from Mitch Paul of OneFin to the plaintiff dated 23 June 2021.

   (ii)Emails between Mitch Paul of OneFin and the plaintiff exchanged between 6 July 2021 and 21 July 2021.

   (iii)Telephone calls, emails and text messages exchanged between the plaintiff and the agent then appointed by Nevgold to sell the Properties, Mr Shane Mullins between 6 July 2021 and 22 July 2021.

   19.By reason of the matters pleaded in the immediately preceding paragraph, the plaintiff owed:

   (a)     fiduciary duties to Onefin, the content of which are mutatis mutandis, pleaded in paragraph 1(a) above; and

   (b)     duties to Onefin to:

   (i) follow Onefin’s instructions; and

   (ii)act with due care and skill.

2. The plaintiff did not disclose the matters pleaded in paragraph 18 to Nevgold.

   21.In the premises of the matters pleaded in paragraphs 18 to 20, by entering into the Appointment, and proceeding to act for Nevgold pursuant to the Appointment in the manner pleaded in the Statement of Claim:

   (a)     the plaintiff placed himself in a position where there was a real, or a substantial possibility, of a conflict between the duties owed to Nevgold pleaded in paragraph 1(a) above and the duties owed to Onefin pleaded in the immediately preceding paragraph; and

   (b)     thereby:

1. breached the duty pleaded in paragraph 1(a) above (Third Breach);

   (ii)    contravened s 99(1) of the Property Occupations Act 2014 (Qld) (Fourth Breach).

1. The gravamen of the case is that over a period of some five months, between March and July of 2021, the plaintiff undertook to act and acted for Onefin in varying respects, which amounted to acting as their agent for identifying land that Onefin might want to purchase and acting as their agent in making a contract with and negotiating with Onefin in relation to Nevgold.

2. The proposed pleading alleges that that conduct was such as to constitute Mr Floyd, Onefin’s agent, with the full range of fiduciary duties (as well as duties as agent) to

follow Onefin’s instructions and to act with due care and skill, presumably in the performance of the agency.

1. The allegation is that when the plaintiff was dealing with Nevgold in September 2021 it did not disclose those matters. That is that it was, in effect, the agent of Onefin for the purposes of its dealings with Nevgold and that, consequently, when Mr Floyd executed his Form 6 appointment to act as agent for Nevgold on 3 September 2021, he placed himself in a position of a conflict of duty and duty, and he breached that duty and contravened s. 99(1) Property Occupations Act 2014.

2. Those allegations that are sought to be added arise in the context of the current pleadings.

3. The starting point is the statement of claim, which pleads is an orthodox ‘effective cause’ claim for agent’s commission by Mr Floyd.

4. The extant defence challenges the entitlement on the basis that notwithstanding that Mr Floyd brought about an option to purchase in favour of Onefin (which was ultimately exercised such that a contract was entered into on the terms of the option), Mr Floyd was not the effective cause of sale because there was a break in the chain of causation resulting from the fact that Onefin did not exercise the option, but caused a third party to exercise it as nominee with the assistance of another agent.

5. A second argument is presently advanced, which was added in the amendment application before Judge Rosengren, and that is that at the time of the negotiation of the option Mr Floyd failed in his duty to disclose information he had relevant to Nevgold’s interests including, in short, the fact that Onefin had informed Mr Floyd that they might be willing to pay more than the price ultimately paid. In respect of that case, the reply alleges that Mr Floyd had had disclosed that possibility to Mr Jorgensen.

Analysis

1. I am in the position of having read both parties’ written openings in the trial, a good deal of the material, and the pleadings. I am therefor well informed about the likely issues at trial on the current pleadings.

2. The first thing to examine is how this new case came to the subject of an application for leave so late in the day.

3. There are indications that, at least, Mr Jorgensen subjectively thought that Mr Floyd might have been acting for Onefin right back in the May summary judgment application in the proceeding. That is probably not that significant. What is more significant is that a notice of non-party disclosure was issued to Onefin in August 2024. That notice was complied with and produced as a response most of the documents that are relied upon as particularising the allegations that are said to support this principal agent agreementin September.

4. A further notice of non-party disclosure was issued on the 8 November 2024, one week ago.  That produced some 5,000-odd documents.  The plaintiff had been

provided the documents produced in September and, from their own energies, had also obtained a copy of that later large bundle produced just recently.

1. The difficulty for the defendant seeking leave, despite the more recent tranche of documents, is that, as Mr Hastie frankly conceded, most of the documents required for pleading the new claim were in the September bundle of documents that were produced. There therefore really is no explanation for this amendment being soiught at this late stage, other than it was only at this stage that the legal representatives turned their minds to this and put themselves in a position to produce what I say, respectfully, is a first draft of the pleaded case that would ultimately be pursued.

2. As I said, the case was listed months ago. It is also a relatively small case involving an amount that is less than the Magistrates Court limit, at least from the plaintiff’s perspective. And even the counterclaim as currently articulated, as I read it, is unlikely to result, in a substantially larger award, even if the effective cause case fails and the counter-claim case succeeds; because, having read a good deal of the material, it seems the alternative case of the defendant is the better case, which is the loss of a valuable commercial opportunity, given the ambiguous nature of the documents relied upon. That case has been pleaded properly by Mr Hastie in accordance with Sellars v Adelaide Petroleum (1994) 179 CLR 332. That leaves it to me ultimately to determine, if it comes to this, the value that should be ascribed to the opportunity, if I am satisfied on the balance of probabilities that a valuable opportunity was lost.

3. But I say that to explain why I take the view that even if the plaintiff loses and the defendant succeeds on their counterclaim, this is not a big case.

4. There is, of course, a public interest in litigation being conducted promptly, the efficient use of court resources, and in ameliorating the burden on plaintiffs that arises merely from the existence of litigation. In this instance, the case as advanced by the defendants inevitably will require investigation by the plaintiffs, not only with their own client, but probably with Onefin’s Mr Paul, and possibly other people. There is no way this trial could proceed fairly to the plaintiff on Monday if the amendment were permitted.

5. I think the defendant more or less accepted that was so and offered to pay costs thrown away by the adjournment if leave was granted. Having put that to Mr Ryall, he said his instructions were that his client wants his trial to proceed on Monday.

6. A good deal in terms of discretionary factors tells against granting this leave. I have already articulated many of the reasons. There are a couple of other things that are particularly important to me, though. One is that I am not satisfied that this claim has any particular merit. That is partly because it is not pleaded in a way (and I do not say this critically of anyone) which lays out the facts or the particulars that are said to give rise to this obligation.

7. The allegation is – although not quite described in this way – effectively an allegation that a principal/agent relationship arose between Onefin and Mr Floyd. As pleaded, it was a gratuitous one, it was an informal one and it emerged from various dealings over a period of four months or so.

1. Such a case is necessarily going to involve subtle consideration of the whole of the evidence, but there are two important considerations, I think, which tend to impugn it as a compelling case, based on what I have got at the moment.

2. First, the evidence seems to demonstrate there was a significant hiatus between when Mr Floyd was helping Onefin earlier in the year, and when Onefin came back later in the year seeking to put a proposal in respect of the particular land that became the subject of this transaction.

3. Further, the earlier relationship had more or less, to the extent it existed, ended tersely, if not in conflict. I have difficulty with the proposition that any such relationship had any continuing relevant when Onefin subsequently returned. Particularly as on that later occasion Mr Floyd almost immediately went to Mr Jorgensen and signed an agreement with him by which Mr Floyd undertook to act for Mr Jorgensen.

4. Second, we are here dealing with estate agents. There is nothing remarkable in potential purchasers approaching agents and asking them to identify potential properties and an agent then approaching a vendor and telling them they have a potential buyer and telling the vendor about that buyer and asking them if they wish to retain them to act for them in dealing with that buyer.

5. I cannot here and now conclude this case is without merit, but for those reasons, taking into account the advantage that I have having from preparing for this case for the last couple of days, it is not a compelling case, in my view. And its lack of persuasiveness is re-enforced by the lack of precision in the way it is pleaded. I note, in particular, paragraph 18(d), particulars (iii) excerpted above.

6. I am acutely conscious of the balancing act that has to be engaged in when considering applications for leave to amend, and I have for that reason spent some considerable time investigating this case in this application. But, exercising my discretion in all the circumstances, I think this is one of those cases where this is too vague a case, brought too late, in circumstances where:

   (a)There is no adequate excuse for the timing of the application;

   (b)If leave were granted the trial would have to be adjourned and the plaintiff opposes the adjournment;

   (c)The case has been listed for trial nearly four months;

   (d)The court has made special arrangements for the hearing of the trial by organising a Brisbane judge travel to Cairns to hear the matter; and

   (e)           The trial is, in all other respects, ready to proceed, and as such, I should refuse leave.

7. Another factor that arose in discussion with Mr Hastie that I take into account is that the defendant is not devoid of credible defences to the plaintiff’s claim even if leave is refused. As I explained, it is an effective cause case. There is the non-disclosure

case. And I that into account, as well as being of some relevance to the exercise of discretion.

Conclusion

1. For those reasons I refuse leave to file the amended pleading.

2. I do grant leave to make the amendment in paragraph 8(g) of the proposed SFADC of the defendant, except insofar as it relates to the “Third and Fourth Breaches”.

3. I’ll order that the defendant pay the plaintiff’s costs of the application on the standard basis.