Hookey v Whitelaw (No 3) - [2020] QSC 284

SUPREME COURT OF QUEENSLAND

CITATION:

Hookey & Anor v Whitelaw & Ors (No 3) [2020] QSC 284

PARTIES:

SCOTT GREGORY HOOKEY

(first plaintiff)

KIDS ACADEMY HOPE ISLAND PTY LTD ACN 164 852 475 AS TRUSTEE OF THE KIDS ACADEMY HOPE ISLAND UNIT TRUST
(second plaintiff)
v
JOHN BRUCE WHITELAW
(first defendant)
KA ESTATES PTY LTD
ACN 600 469 887 AS TRUSTEE OF THE KA ESTATES UNIT TRUST
(second defendant)
JBW ESTATES PTY LTD
ACN 600 612 819 AS TRUSTEE OF THE JBW FAMILY TRUST

(third defendant)

FILE NO:

8477 of 2018

DIVISION:

Trial

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

16 September 2020

DELIVERED AT:

Brisbane

HEARING DATE:

6 July 2020

JUDGE:

Flanagan J

ORDER:

1.    Secure Legal Pty Ltd forthwith pay to the second defendant the sum of $138,297.25 from the balance of the Trust Security held by them pursuant to the order of Mullins J made 12 September 2018.

2.    The plaintiffs’ application filed 25 June 2020 is dismissed.

3.    The Court will hear the parties as to costs.

COUNSEL:

J W Peden QC for the plaintiffs
M M Stewart QC, with Dr D C Clarry for the defendants

SOLICITORS:

Van de Graaff Lawyers for the plaintiffs
Russells for the defendants

The parties are in dispute as to how the balance of a sum of money (“the Trust Security”) held by the solicitors for the plaintiffs pursuant to consent orders made by Mullins J (as her Honour then was) on 12 September 2018 should be distributed. The original amount of the Trust Security was $524,389.10. The present balance is $478,942.04.
There are two applications before the Court. The defendants apply for orders requiring the plaintiffs to direct their solicitor to pay an amount of $138,297.25 from the balance of the Trust Security to the second defendant, or alternatively an order that the plaintiffs’ solicitor pay that amount to the second defendant. The amount of $138,297.25 constitutes a shortfall in rent not paid by the second plaintiff, Kids Academy, to the second defendant, KA Estates, for the months of April, May and June 2020. The plaintiffs apply for orders that part of this sum, namely $90,894.12[1] be paid into Court pending the determination of all issues as to any entitlement respectively of the parties to that sum. The plaintiffs also seek the release of the remaining balance of the Trust Security ($388,047.92) held in their solicitors’ trust account “to one or more payees as directed by [the plaintiffs]”.[2]
[1]This figure constitutes the rent and interest ($138,297.25) less one month’s rent and all the interest.
[2]Application filed 25 June 2020, para 1.
The applications arise in the following circumstances.
Background
On 16 July 2014, KA Estates and Kids Academy executed a lease which was subsequently registered on 12 February 2016. A childcare centre was operated from the leased premises.
In Hookey & Anor v Whitelaw & Ors, the Court determined that KA Estates lawfully terminated the lease on 11 September 2018.[3] A declaration to this effect…

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: [2020] QSC 284
Decision Date: 16 September 2020

CaseChat Overview and Summary

Hookey v Whitelaw (No 3) involves a dispute concerning the recovery of money held in a trust account and the application for relief against forfeiture of a lease. The case was heard in the Supreme Court of Queensland. The primary legal issues in this case included the enforceability of the trust undertakings and the appropriate terms of relief against forfeiture. The court had to determine whether the undertakings made by the plaintiffs were binding and whether the relief against forfeiture should be granted and, if so, on what terms.

The court examined the circumstances under which the trust undertakings were made and found that they were indeed binding. The court held that the terms of the undertakings were clear and unambiguous, and that the plaintiffs were bound by them. Consequently, the court ordered that Secure Legal Pty Ltd was to pay the defendant the sum of $138,297.25 from the balance of the Trust Security held by them. The court also dismissed the plaintiffs’ application for relief against forfeiture without considering the terms of the relief, as the primary issue of the enforceability of the trust undertakings had already been resolved.

This decision highlights the importance of the clarity of terms in trust undertakings and their enforceability. The court’s ruling ensures that parties are held to their commitments as outlined in their undertakings. The case also underscores the procedural steps that must be followed in determining the terms of relief against forfeiture, with the court reserving the matter for further hearing.

The final orders of the court included the directive for Secure Legal Pty Ltd to pay the sum of $138,297.25 to the defendant and the dismissal of the plaintiffs’ application for relief against forfeiture. The court further indicated that it would hear the parties as to the costs of the proceedings.

Orders

Orders of the court

1. Secure Legal Pty Ltd forthwith pay to the second defendant the sum of $138,297.25 from the balance of the Trust Security held by them pursuant to the order of Mullins J made 12 September 2018.

2. The plaintiffs’ application filed 25 June 2020 is dismissed.

3. The Court will hear the parties as to costs.

Background

Background to the litigation

The applications arise in the following circumstances.Background On 16 July 2014, KA Estates and Kids Academy executed a lease which was subsequently registered on 12 February 2016. A childcare centre was operated from the leased premises. In Hookey & Anor v Whitelaw & Ors, the Court determined that KA Estates lawfully terminated the lease on 11 September 2018.[3] A declaration to this effect was made by the Court on 7 April 2020. Prior to the making of this declaration, the parties had been in dispute about the status of the lease since 2018. The consent orders made by Mullins J were made in circumstances where KA Estates sought an order for recovery of possession from Kids Academy. [3][2020] QSC 63, [135]. The orders made by Mullins J on 12 September 2018 were expressed to be upon the plaintiffs giving the undertakings set out in Schedule A to the orders. Paragraphs 1 and 2 of the undertakings required Kids Academy to make payments to KA Estates for rent, outgoings and GST due under the lease. Paragraph 3 of the undertakings required the plaintiffs to provide to their solicitors an irrevocable written authority and direction in the following terms:“We, SCOTT GREGORY HOOKEY and KIDS ACADEMY HOPE ISLAND PTY LTD give this authority and direction pursuant to our undertaking to the Supreme Court of Queensland in Proceeding No 8477 of 2018 given on 12 September 2018. We HEREBY IRREVOCABLY AUTHORISE AND DIRECT you to deal with the sum of $524,389.10 (“the Trust Security”) in your trust account on the following bases until further order of the court:-(a)your firm is to have the same obligation to make payment from the Trust Security to the second defendant, KA Estates Pty Ltd, as would a bank issuing a bank guarantee in favour of the second defendant pursuant to clause 36 of the Registered Lease, and(b)the second defendant is to have the same right under clause 36 of the Registered Lease to call on your firm to make payment from the Trust Security to the second defendant as the second defendant has to call on a bank guarantee in favour of the second defendant issued pursuant to clause 36 of Registered Lease,” Paragraph 5 of the undertakings provided that Kids Academy “will pay the rent, other outgoings and any other monies payable in accordance with the Registered Lease, save and except for any interest on late payments claimed by KA Estates thereunder and for sums payable under the Registered Lease in relation to the period before 1 October 2018”. On 17 October 2018, Jackson J placed the proceedings on the Commercial List. On 13 November 2018, his Honour made orders dismissing both the plaintiffs’ application for interlocutory relief restraining the defendants from terminating Kids Academy’s right to occupy the leased premises, and the defendants’ application for recovery of possession. The trial was heard before me on 22 to 31 October 2019, with further submissions received on 5 and 15 November 2019. Judgment was delivered on 7 April 2020. The orders made on that date, as well as including a declaration that the lease was lawfully terminated by KA Estates on 11 September 2018, included orders 6 and 7:“6.Kids Academy be granted relief against forfeiture as claimed in para 84D of the fourth further amended statement of claim.7.I will hear the parties further as to the terms of the grant of relief against forfeiture.”[4][4]Hookey & Anor v Whitelaw & Ors [2020] QSC 63.

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

Full text does not contain this section.

CITATION:	Hookey & Anor v Whitelaw & Ors (No 3) [2020] QSC 284
PARTIES:	SCOTT GREGORY HOOKEY (first plaintiff) KIDS ACADEMY HOPE ISLAND PTY LTD ACN 164 852 475 AS TRUSTEE OF THE KIDS ACADEMY HOPE ISLAND UNIT TRUST (second plaintiff) v JOHN BRUCE WHITELAW (first defendant) KA ESTATES PTY LTD ACN 600 469 887 AS TRUSTEE OF THE KA ESTATES UNIT TRUST (second defendant) JBW ESTATES PTY LTD ACN 600 612 819 AS TRUSTEE OF THE JBW FAMILY TRUST (third defendant)
FILE NO:	8477 of 2018
DIVISION:	Trial
PROCEEDING:	Application
ORIGINATING COURT:	Supreme Court at Brisbane
DELIVERED ON:	16 September 2020
DELIVERED AT:	Brisbane
HEARING DATE:	6 July 2020
JUDGE:	Flanagan J
ORDER:	1. Secure Legal Pty Ltd forthwith pay to the second defendant the sum of $138,297.25 from the balance of the Trust Security held by them pursuant to the order of Mullins J made 12 September 2018. 2. The plaintiffs’ application filed 25 June 2020 is dismissed. 3. The Court will hear the parties as to costs.
COUNSEL:	J W Peden QC for the plaintiffs M M Stewart QC, with Dr D C Clarry for the defendants
SOLICITORS:	Van de Graaff Lawyers for the plaintiffs Russells for the defendants